UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

 (Mark

(Mark one)

ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended: February 28, 20212022

TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______________ to ___________________

Commission File Number 001-38402

MONAKER GROUP, INC.

(Exact name of registrant as specified in its charter)

Nevada26-3509845
(State or other jurisdiction of

incorporation or organization)
(I.R.S. Employer
Incorporation No.)

1560 Sawgrass Corporate Parkway


Suite 130

Sunrise, Florida

33323
(Address of principal executive offices)

33323

(Zip Code)

(954) 888-9779

(Registrant’s telephone number, including area code code)

(954) 888-9779

Securities registered under Section 12(b) of the Exchange Act:

Title of each classTrading Symbol(s)Name of each exchange on which registered

Common Stock,
$0.00001

$0.00001 Par Value Per Share

MKGINXTPThe NASDAQ Stock Market LLC

(Nasdaq Capital Market)

Securities registered under Section 12(g) of the Exchange Act: None.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ☐ Yes ☒ No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. ☐ Yes ☒ No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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 (§229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of large“large accelerated filer,accelerated“accelerated filer,smaller“smaller reporting company,” and emerging“emerging growth companycompany” 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 has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant on August 31, 2020,2021, based on a closing sales price of $2.67$2.00 on such date, was approximately $25,275,435.$55 million. For purposes of calculating the aggregate market value of shares held by non-affiliates, we have assumed that all outstanding shares are held by non-affiliates, except for shares held by each of our executive officers, directors and 5% or greater stockholders. In the case of 5% or greater stockholders, we have not deemed such stockholders to be affiliates unless there are facts and circumstances which would indicate that such stockholders exercise any control over our company, or unless they hold 10% or more of our outstanding common stock. These assumptions should not be deemed to constitute an admission that all executive officers, directors and 5% or greater stockholders are, in fact, affiliates of our company, or that there are no other persons who may be deemed to be affiliates of our company. Further information concerning shareholdings of our officers, directors and principal stockholders is included or incorporated by reference in Part III, Item 12 of this Annual Report on Form 10-K.

As of June 7, 2021,17, 2022, the registrant had 23,454,203117,436,081 shares of its common stock, par value $0.00001 per share, outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

None.

 

 

 

NEXTPLAY TECHNOLOGIES, INC.,

formerly MONAKER GROUP, INC.

FORM 10-K

FOR THE YEAR ENDED FEBRUARY 28, 2022

TABLE OF CONTENTS

Page No.:
 
Cautionary Note Regarding Forward-Looking Statements1ii
Where You Can Find Other Information3v
 
PART I1
Item 1.Business1
Item 1A.Risk Factors25
Item 1B.Unresolved Staff Comments48
Item 2.Properties48
Item 3.Legal Proceedings48
Item 4.Mine Safety Disclosures48
 
Item 1.BusinessPART II449
Item 1A.Risk Factors30
Item 1B.Unresolved Staff Comments65
Item 2.Properties65
Item 3.Legal Proceedings65
Item 4.Mine Safety Disclosures65
 
PART II
Item 5.Market for Registrant’s Common Equity, Related Stockholders Matters and Issuer Purchases of Equity Securities6649
Item 6.Selected Financial Data[Reserved]7250
Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations7251
Item 7A.Quantitative and Qualitative Disclosures About Market Risk8255
Item 8.Financial Statements and Supplementary Data83F-1
Item 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure12756
Item 9A.Controls and Procedures12756
Item 9B.Other Information12856
Item 9C.Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.56
 
PART III57
 
Item 10.Directors, Executive Officers and Corporate Governance12957
Item 11.Executive Compensation14169
Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters14877
Item 13.Certain Relationships and Related Transactions, and Director Independence15280
Item 14.Principal Accountant Fees and Services15883
 
PART IV84
 
Item 15.Exhibits, Financial Statement Schedules15984
Item 16.Form 10-K Summary17491

Definitions

 Definitions

Unless the context requires otherwise, references to the “Company,” “we,” “us,” “our,” “Monaker”, “Monaker Group” and “Monaker Group, Inc.NextPlay” in this Report refer specifically to Monaker Group,NextPlay Technologies, Inc. and its consolidated subsidiaries.

In addition, unless the context otherwise requires and for the purposes of this Annual Report on Form 10-K only:

Exchange Act” refers to the Securities Exchange Act of 1934, as amended;

SEC” or the “Commission” refers to the United States Securities and Exchange Commission;

Securities Act” refers to the Securities Act of 1933, as amended; and

FYE” means fiscal year end.

i

 

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Discussions in this Annual Report on Form 10-K (this “Annual Report”), including, without limitation, those under the captions Business,“Business,Risk Factors“Risk Factors” and Management’s“Management’s Discussion and Analysis of Financial Condition and Results of OperationsOperations” contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These include statements that involve expectations, plans or intentions (such as those relating to future business, future results of operations or financial condition, new or planned features or services, or management strategies) based on our management’s current beliefs and assumptions. You can identify these forward-looking statements by words such as “may,” “will,” “would,” “should,” “could,” “expect,” “anticipate,” “believe,” “estimate,” “intend,” “plan” and other similar expressions. These forward-looking statements involve risks and uncertainties that could cause our actual results to differ materially from those expressed or implied in our forward-looking statements. These factors include those set forth below under Summary“Summary Risk FactorsFactors” and those disclosed under Risk“Risk Factors,, below.

Given these risks and uncertainties, you should not place undue reliance on these forward-looking statements. You should read the matters described in Risk Factors“Risk Factors” and the other cautionary statements made in this Report, as being applicable to all related forward-looking statements wherever they appear in this Report. We cannot assure you that the forward-looking statements in this Report will prove to be accurate and therefore prospective investors are encouraged not to place undue reliance on forward-looking statements. Other than as required by law, we undertake no obligation to update or revise these forward-looking statements, even though our situation may change in the future.

Summary Risk Factors Summary

We face risks and uncertainties related to our business, many of which are beyond our control. In particular, risks associated with our business include:

●           The number of sharesBelow is a summary of the Company’s common stock issuable at the closing of the Share Exchange Agreement, as amended, with HotPlay Enterprise Limited (“HotPlay”) and its stockholders, as amended andprincipal factors that make an investment in connection with the conversion of the Company’s Series B Convertible Preferred Stock and Series C Convertible Preferred Stock (the “Axion Preferred Conversion”) will result in significant dilution to existing stockholders;

●           The majority owners of HotPlay will obtain majority voting control over the Company following the closing of the HotPlay share exchange;

●           The Company’s officers and directors have interests in the HotPlay Share Exchange different from the other stockholders of the Company;

●           Combining HotPlay and the Company may be more difficult, costly or time-consuming than expected and the Company may fail to realize the anticipated benefits of the HotPlay share exchange, including expected financial and operating performance of the combined company (i.e., Monaker after completion of the HotPlay Share Exchange);

●           The Company may be unable to close the HotPlay Share Exchange on the schedule proposed, or if at all, and under certain circumstances the HotPlay Share Exchange may be terminated, which termination may have a material adverse effect on Monaker;

●           The Company and its operations and prospects are subject to restrictions while the HotPlay Share Exchange is pending;

●           Uncertainty and illiquidity in credit and capital markets can impair our ability to obtain credit and financing on acceptable terms and can adversely affect the financial strength of our business partners;

●           The closing of the HotPlay Share Exchange is contingent on the Company obtaining certain approvals, which may not be obtained on a timely basis or on favorable terms, if at all, including the requirement that the Company meeting NASDAQ’s initial listing requirements, which the combined company may be unable to meet;


●           Various third parties owe the Company a significant amount of money which may not be timely paid, if at all;

●           The Company owes significant amounts to Streeterville Capital, LLC, which is secured by a security interest over substantially all of its assets;

●           The Company will need to raise additional funding to support its operations, both before and after the closing, which funding may not be available on favorable terms, if at all;

●           The Company’s operations have been negatively affected by, and have experienced material declines as a result of, COVID-19 and the governmental responses thereto;

●           Currently pending and future litigation affecting the Company and HotPlay may have a material adverse effect on the Company and/or the combined company, and/or prevent the closing of the HotPlay Share Exchange;

●           The Company’s operations are subject to uncertainties and risks outside of its control, including third party delays in submissions of alternative lodging rental listings and failures to maintain such rental listings, integrations of such listings and the renewal of such listings;

●           The Company is subject to extensive government regulations and rules, the failure to comply which may have a material adverse effect on the Company;

●           The success of the Company is subject to the development of new products and services over time;

●           Longroot Holding (Thailand) Company Limited’s operations are subject to risks associated with cryptocurrency exchanges being a new industry, regulatory changes and/or restrictions, potential illegal uses of cryptocurrencies, the acceptance and widespread use of cryptocurrencies, cyber security risks, and competing blockchain technologies;

●           The Company is subject to competition with competitors who have significantly more resources, more brand recognition and a longer operating history than the Company;

●           The Company is subject to risks associated with failures to maintain intellectual property and claims by third parties relating to an allegation that the Company violated such third parties’ intellectual property rights;

●           The Company relies on third party service providers and the failure of such third parties to provide the services contracted for, on the terms contracted, or otherwise, could have a material adverse effect on the Company;

●           The Company relies on the internet and internet infrastructure for its operations and in order to generate revenues;

●           The Company’s ability to raise funding, and dilution caused by such fundings, anti-dilution rights included in outstanding warrants;

●           The trading price of the Company’s common stock is subject to numerous risks, including volatility and illiquidity;

●           The price of our common stock may fluctuate significantly, and you could losespeculative or risky. This summary does not address all or part of your investment;


●           The officers and directors of the Company haverisks that we face. Additional discussion of the ability to exercise significant influence over the Company;

●           Our business depends substantially on property owners and managers renewing their listings;

●           The marketrisks summarized in which we participate is highly competitive, and we may be unable to compete successfully with our current or future competitors;

●           If we are unable to adapt to changes in technology, our business could be harmed;

●           We may be subject to liability for the activities of our property owners and managers, which could harm our reputation and increase our operating costs;

●           We have incurred significant losses to date and require additional capital which may not be available on commercially acceptable terms, if at all;

●           Our ability to close the pending acquisition of control of International Financial Enterprise Bank, Inc., our ability to integrate the operations of such bank, if acquired, regulatorythis risk factor summary, and other risks associated therewith; and

●           Those discussed under the caption “Riskthat we face, can be found in Item 1A., “Risk Factors,” of this Annual Report and should be carefully considered, together with other information included in this Report.

We will need to raise additional funding to support our operations, which funding may not be available on favorable terms, if at all;
We have a limited operating history in certain of the industries that we currently operate in and have incurred significant operating losses since inception. We may never become profitable or, if achieved, be able to sustain profitability;
We have significant indebtedness, which could adversely affect our business and financial condition;
We owe significant amounts to Streeterville Capital, LLC, which is secured by a security interest over substantially all of our assets, and we are subject to requirements, penalties and damages under its agreements with Streeterville;
Our long-term success depends, in part, on our ability to continue to expand our operations outside of the United States and, as a result, our business is susceptible to risks associated with international operations;
Currently pending or future litigation or governmental proceedings could result in material adverse consequences, including judgments or settlements;
The industries in which we participate are highly competitive;
Our failure to be current in our filings with the SEC could pose significant risks to our business, which could, individually or in the aggregate, materially and adversely affect our financial condition and results of operations.
Our common stock may be delisted from the Nasdaq Capital Market if we cannot satisfy Nasdaq’s continued listing requirements;

ii

 

If we do not successfully implement our acquisition strategies, the businesses and/or assets that we have acquired or invested in do not perform as expected, or we are unable to effectively integrate acquired businesses, our operating results and prospects could be harmed;
Some members of our senior management team have limited experience in the day-to-day operations of the industries in which our businesses operate;
Our future success depends on the continuing efforts of our key employees and our ability to attract, hire, retain and motivate highly skilled employees in the future; 
We rely on relationships with developers to provide an extensive game portfolio and sufficient advertising spaces;
Our products and internal systems rely on software and hardware that is highly technical, and any errors, bugs, or vulnerabilities in these systems, or failures to address or mitigate technical limitations in such systems, could adversely affect our business;
Our business partners may be unable to honor their obligations to us, or their actions may put us at risk;
We derive a significant portion of our revenues from advertisements, and if any events occur that negatively impact our relationships with advertisers, our advertising revenues and operating results would be negatively impacted;
HotPlay’s go to market strategy and corresponding timeline is dependent on being able to successfully recruit substantial additional resources within Q2 of FY23. Failure to do this could result in the revenues generated from HotPlay being delayed beyond FY23;
Zappware’s revenue forecast has a dependency on the availability of dedicated encoding hardware underpinning their TVaaS business. Given the ongoing worldwide microchip shortage due to COVID-19, the availability of such hardware could be delayed, which would in turn impact the revenues apportioned to Zappware within our media division;
Although Longroot is a licensed ICO Portal in Thailand, it has not yet closed any offerings, and there can be no assurances that it will;
Longroot operations are subject to risks associated with digital asset exchanges being a new industry, regulatory changes and/or restrictions, potential illegal uses of digital assets, cyber security risks, and reliance on open source blockchain technologies;
Our ability to generate revenue through the sale of digital assets is subject to risk associated with economic and market conditions, the acceptance and widespread use of digital assets, and investor confidence levels;
The performance of the digital assets issued is dependent on the performance of the issuer and underlying asset which is unpredictable and may result in reputation damage should they underperform;
There are cyber security risks related to digital asset trading;
We depend on third party cryptographic and algorithmic protocols governing the issuance of and transactions in digital assets;
Our tokens might be used for illegal or improper purposes, which could expose us to additional liability and harm our business;
Developing NextBank into a comprehensive FinTech solution provider involves a high level of complexity, may require substantial resources and costs, and is subject to obtaining regulatory approval;
The NextBank mobile application development has, to date, been partially developed by Ukrainian developers, which has been impacted by the ongoing conflict between Ukraine and Russia;
NextBank’s ability to originate loans is subject to risk associated with economic and market conditions;
NextBank uses correspondent banks and is subject to risk associated with termination of such relationships, which may negatively impact its operations;

iii

Our success is subject to the development of new or upgraded products, services and features over time;
If we are not able to maintain and enhance our NextTrip brand and the brands associated with our websites, our reputation and business may suffer;
We may be subject to liability for the activities of our property owners and managers, which could harm our reputation and increase our operating costs;
Our business is subject to complex and evolving U.S. and foreign laws and regulations regarding privacy, data protection, content, competition, and consumer protection. Many of these laws and regulations are subject to change and uncertain interpretation, and could result in claims, changes to our business practices, monetary penalties, increased cost of operations, or declines in user growth or engagement, or otherwise harm our business;
Our business, products, and distribution are subject to increasing regulation in key territories. If we do not successfully respond to these regulations, our business could be negatively impacted;
NextBank is subject to various regulatory capital requirements. Regulatory changes or actions may alter the requirement of the capital;
NextBank faces a risk of non-compliance and enforcement action related to the Bank Secrecy Act and other anti-money laundering, customer due diligence, and combating the financing of terrorism statutes and regulations;
We are subject to anti-bribery, anti-corruption and similar laws, and non-compliance with such laws could subject us to criminal penalties or significant fines and harm our business and reputation;
If we do not adequately protect our intellectual property, our ability to compete could be impaired;
Certain of our products are subject to the threat of piracy and unauthorized copying, and inadequate intellectual property laws and other protections could prevent us from enforcing or defending our proprietary technologies;
We may be subject to claims that we violated intellectual property rights of others, which are extremely costly to defend and could require us to pay significant damages and limit our ability to operate;
Our ability to acquire and maintain licenses to intellectual property may affect our revenue and profitability;
We use open-source software in connection with certain of our games and services, which may pose particular risks to our proprietary software, products, and services, and which could have a negative impact on our business;
The price of our common stock may fluctuate significantly, and investors could lose all or part of their investments;
Stockholders may be diluted significantly as a result of the issuance of additional shares of our common stock or securities convertible into, or exercisable for, shares of our common stock;
The ownership of our capital stock is highly concentrated, which may prevent other stockholders from influencing significant corporate decisions and may result in conflicts of interest that could cause our stock price to decline;
If we fail to maintain effective internal controls, it could adversely affect our financial position and lower our stock price;
If securities analysts and other industry experts do not publish research or publish negative research about our business, our stock price and trading volume could decline;
Provisions in our amended and restated articles of incorporation limit the liability of our management to stockholders;
Certain of our outstanding warrants include anti-dilutive rights;
Sales of a substantial number of our securities in the public market could cause our stock price to fall; and
We have not paid dividends on shares of our common stock in the past and do not plan to do so in the future.

iv

WHERE YOU CAN FIND OTHER INFORMATION

We file annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and proxy and information statements and amendments to reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended. The SEC maintains a website (https://www.sec.gov) that contains reports, proxy and information statements and other information regarding us and other companies that file materials with the SEC electronically. Additional information about us is available on our website at www.Monakergroup.com.www.NextPlaytechnologies.com. We do not incorporate the information on or accessible through our websites into this filing, and you should not consider any information on, or that can be accessed through, our websites as part of this filing.

 3

v

 

PART I

Item 1. Business.

Introduction

ThisThe information included in this Annual Report on Form 10-K should be read in conjunction with the consolidated financial statements and related notes in Item“Item 8. Financial Statements and Supplemental DataData” of this Report.

Our logo and some of our trademarks and tradenames are used in this Report. This Report also includes certain trademarks, tradenames and service marks that are the property of others. Solely for convenience, trademarks, tradenames and service marks referred to in this Report may appear without the ®, ™ and SM symbols. References to our trademarks, tradenames and service marks are not intended to indicate in any way that we will not assert to the fullest extent under applicable law our rights or the rights of the applicable licensors if any, nor that respective owners to other intellectual property rights will not assert, to the fullest extent under applicable law, their rights thereto. We do not intend the use or display of other companies’ trademarks and trade names to imply a relationship with, or endorsement or sponsorship of us by, any other companies.

The market data and certain other statistical information used throughout this Report are based on independent industry publications, reports by market research firms or other independent sources that we believe to be reliable sources. Industry publications and third-party research, surveys and studies generally indicate that their information has been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information. We are responsible for all of the disclosures contained in this Report, and we believe these industry publications and third-party research, surveys and studies are reliable. While we are not aware of any misstatements regarding any third-party information presented in this Report, their estimates, in particular, as they relate to projections, involve numerous assumptions, are subject to risks and uncertainties, and are subject to change based on various factors, including those discussed under the section entitled Item“Item 1A. Risk FactorsFactors” in this Report. These and other factors could cause our future performance to differ materially from our assumptions and estimates. Some market and other data included herein, as well as the data of competitors as they relate to Monaker Group,NextPlay Technologies, Inc., is also based on our good faith estimates.

Our fiscal year ends on February 28th (or 29th during leap years). Interim results are presented on a quarterly basis for the quarters ended May 31, August 31, and November 30th, the first quarter, second quarter and third quarter, respectively, with the quarter ending February 28th/29th being referenced herein as our fourth quarter. Fiscal 2022 means the year ended February 28, 2022, whereas fiscal 2021 means the year ended February 28, 2021, whereas fiscal 2020 means the year ended February 29, 2020. Similarly, the year ended February 28, 2022 is our 2022 fiscal year.2021.

Corporate, Organizational and Business Information

Organizational History

Our predecessor, Maximus Exploration Corporation, was incorporated in the State of Nevada on December 29, 2005, and was a reporting ‘shell company’ as defined in Rule 405 of the Securities Act (“Maximus”). Extraordinary Vacations Group, Inc. (“EXVG”) was incorporated in the State of Nevada in June 2004. Extraordinary Vacations USA Inc. (“EVUSA”), EXVG’s wholly-owned subsidiary, is a Delaware corporation, incorporated on June 24, 2002. On October 9, 2008, EXVG agreed to sell 100% of EVUSA to Maximus and consummated a reverse merger with Maximus. Maximus then changed its name to Next 1 Interactive, Inc. On June 24, 2015, we changed our name to Monaker Group, Inc.

Executive Offices and Telephone Number

Our principal executive offices are located at 1560 Sawgrass Corporate Parkway, Suite 130, Sunrise, Florida 33323 and our telephone number is (954) 888-9779. Additional information about us is available on our website at www.monakergroup.com.https://www.nextplaytechnologies.com The information on our website is not incorporated herein by reference.

Organizational History

The Company was originally incorporated in the State of Nevada in on December 29, 2005 under the name Maximus Exploration Corporation (“Maximus”), and was a reporting “shell company” as defined in Rule 405 of the Securities Act.

On October 9, 2008, Maximus, a reporting shell company, entered into a Share Exchange Agreement (the “2008 Exchange Agreement”) with Extraordinary Vacation Group, Inc., a wholly-owned subsidiary of Maximus (“EXVG”), and EXVUSA, a wholly-owned subsidiary of EXVG. Pursuant to the 2008 Exchange Agreement, EXVG exchanged 100% of its shares in EVUSA for 13 million shares of common stock of Maximus, resulting in EXVG becoming the majority shareholder of Maximus through a reverse merger. EXVG then proceeded to dividend 13 million shares of Maximus common stock to the stockholders of EXVG, on a pro rata basis. As a result of these transactions, EVUSA became a wholly-owned subsidiary of Maximus. Maximus then amended its Certificate of Incorporation to change its name to Next 1 Interactive, Inc. (“Next 1”). After consummation of the transaction, Next 1 conducted all of its business through EVUSA, its wholly-owned subsidiary.


 


Overview

Summary


On June 22, 2015, the Company changed its name to Monaker Group, Inc. (“Monaker”).

On July 23, 2020, Monaker entered into a Share Exchange Agreement (as amended, the “2020 Exchange Agreement”) with HotPlay Enterprise Limited (“HotPlay”) and the shareholders of HotPlay, pursuant to which the HotPlay shareholders agreed to exchange 100% of the outstanding capital shares of HotPlay (making HotPlay a wholly-owned subsidiary of Monaker through a reverse merger following the closing of the transactions contemplated therein) for 52 million shares of Monaker’s common stock (the “HotPlay Shares”), subject to various closing conditions. The acquisition of HotPlay contemplated by the 2020 Share Exchange closed on June 30, 2021, at which time Monaker acquired 100% of the outstanding capital shares of HotPlay. The HotPlay acquisition was accounted for as a reverse acquisition, with HotPlay being deemed the acquiring company for accounting purposes. After consummation of the transaction, Monaker changed its name to NextPlay Technologies, Inc., and the Company altered its business plan to focus on the travel, cryptocurrency, and an in-game advertising industries.

On November 16, 2020, the Company acquired 100% of Longroot pursuant to a Stock Purchase Agreement (the “SPA”) entered into between the Company and Dr. Jason Morton (“Morton”) on November 2, 2020, and for certain limited purposes set forth therein, Longroot. Pursuant to the SPA, the Company purchased, 100% of Longroot, in consideration for (a) $1,650,000 in cash; (b) 200,000 shares of restricted common stock valued at $2.14 per share for a total value of $428,000, as well as 150,000 shares of restricted common stock valued at $3.00 per share, for a total value of $450,000.

On January 15, 2021, the Company entered into a Founding Investment and Subscription Agreement (the “Investment Agreement”) with Reinhart Interactive TV AG, a company organized in Switzerland (“Reinhart”), and Jan C. Reinhart, the founder of Reinhart (“Founder”), pursuant to which the Company agreed to pay the Founder 10,000,000 Swiss Francs (approximately $10.8 million U.S. Dollars) as compensation for the purchase of 51% of the ownership of Reinhart. The transaction closed on March 31, 2021, at which time Reinhart became a majority owned subsidiary of the Company.

On April 1, 2021, the Company entered into a Bill of Sale for Common Stock, effective March 22, 2021 (the “Bill of Sale”), with certain third parties (the “Initial Sellers”) pursuant to which the Company agreed to purchase 2,191,489 shares (the “Initial IFEB Shares”) of authorized and outstanding Class A Common Stock (the “Class A Stock”) of International Financial Enterprise Bank, Inc., a Puerto Rico corporation licensed as an Act 273-2012 international financial entity headquartered in San Juan Puerto Rico (“IFEB”), which Initial IFEB Shares total approximately 57.06% of the outstanding Class A Stock of IFEB. The purchase price of the Initial IFEB Shares was $6,400,000, which amount was paid to the Initial Sellers on April 1, 2021.

On May 6, 2021, in anticipation of the acquisition of the IFEB Shares, and control of IFEB, the Company and IFEB entered into a Preferred Stock Exchange Agreement, which was amended by a First Amendment to Preferred Stock Exchange Agreement entered into May 10, 2021 and effective May 6, 2021 (as amended by the first amendment, the “Original Preferred Exchange Agreement”), pursuant to which the Company agreed to exchange 1,950,000 shares of the Company’s common stock for 5,850 shares of cumulative, non-compounding, non-voting, non-convertible, perpetual Series A Preferred shares of IFEB. Notwithstanding the terms of the Bill of the Sale, and the payment by the Company of the aggregate purchase price pursuant thereto, the transfer of the Initial IFEB Shares to the Company and the Company’s acquisition of control of IFEB was subject to review of the Company’s financial viability, as well as other matters, by OCIF, which approval of OCIF was received in June 2021, but which acquisition did not close until July 21, 2021.

Separately, on July 21, 2021, the Company entered into, and closed the transactions contemplated by, a Share Exchange Agreement with various other holders of shares of Class A Common Stock of IFEB (the “Additional Sellers” and the “IFEB Exchange Agreement”). Pursuant to the IFEB Exchange Agreement, the Additional Sellers exchanged an aggregate of 1,648,614 of the outstanding Class A Common Stock of IFEB, representing 42.94% of such outstanding Class A Common Stock of IFEB, in consideration for an aggregate of 1,926,750 restricted shares of the Company’s common stock (the “IFEB Common Shares”), with each one share of Class A Common Stock of IFEB being exchanged for 1.168 restricted shares of common stock of the Company, based on an agreed upon value of $2.50 per share for each share of Company common stock and $2.92 per share for each share of Class A Common Stock of IFEB. As a result of the closing of both transactions, we acquired control of 100% of IFEB as of July 21, 2021. The name of IFEB was subsequently changed to NextBank International, Inc. (“NextBank”).

On March 30, 2022, the Company acquired certain assets from Go Game Pte Ltd. pursuant to an Asset Purchase Agreement, including a casual games tournament and gamification platform, a perpetual license to the goPay payment platform, and a range of casual game assets that can be leveraged to distribute the HotPlay In-Game Advertising platform and reward solutions throughout. As consideration for the purchase, the Company agreed to pay the seller $5,000,000, $2,750,000 of which has already been paid and the remainder of which is an innovative technology companypayable in monthly installments through March 31, 2023.

On May 5, 2022, the Company completed the acquisition of certain assets of Fighter Base Publishing, Inc. (“Fighter Base”) and Token IQ, Inc. (“Token IQ”), both of which entities are owned and controlled by Mark Vange, the Company’s Chief Technology Officer, pursuant to Intellectual Property Purchase Agreements executed in August 2021. Both of the acquisitions were contingent upon approval of the Company’s stockholders, which was obtained at the Special Meeting of Stockholders of the Company held on January 28, 2022, and certain other closing conditions. As consideration for the acquisitions, the Company issued 1,666,666 shares of Company common stock to Fighter Base and 1,250,000 shares of Company common stock to Token IQ.


Segment Reporting

Accounting Standards Codification 280-10 “Segment Reporting” established standards for reporting information about operating segments in annual consolidated financial statements and required selected information about operating segments in interim financial reports issued to stockholders. It also established standards for related disclosures about products, services, and geographic areas. Operating segments are defined as components of the enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance.

An operating segment component has the following characteristics:

a.It engages in business activities from which it may recognize revenues and incur expenses (including revenues and expenses relating to transactions with other components of the same public entity).

b.Its operating results are regularly reviewed by the public entity’s chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance.

c.Its discrete financial information is available.

The Company has three operating segments consisting of

(i)Media Division, which consists of HotPlay and Reinhart/Zappware,

(ii)FinTech Division, which consists of Longroot and NextBank, and

(iii)

Travel Division, which includes NextTrip holdings and Extraordinary Vacations USA.

The Company’s chief operating decision makers are considered to be the Co-Chief Executive Officers. The chief operating decision makers allocate resources and assesses performance of the business and other activities at the single operating segment level.

See below, as well as Note 12 Business Segment Reporting, for additional details regarding each segment unit.

Overview

NextPlay Technologies, Inc. and its consolidated subsidiaries (collectively, “NextPlay,” “we,” “our,” “us,” or the “Company”) is building next generationa technology solutions company, offering games, in-game advertising, digital asset products and services, connected TV and travel booking services to consumers and corporations within a growing worldwide digital ecosystem. NextPlay’s engaging products and services utilize innovative advertising technology (“AdTech”), Artificial Intelligence (“AI”), and financial technology (“FinTech”) solutions to powerleverage the travel,strengths and channels of its existing and acquired technologies.

NextPlay is organized into 3 divisions: (i) NextMedia, the Company’s Interactive Digital Media Division (the “Media Division”); (ii) NextFinTech, the Company’s Finance and Technology (“FinTech”) Division; and (iii) NextTrip, the Company’s Travel Division.

Media Division

In the Media Division, NextPlay closed its acquisition of HotPlay and its In-Game Advertising (“IGA”) platform on June 30, 2021 and acquired a 51% interest in Reinhart on June 23, 2021. Reinhart owns 100 percent of Zappware, a 20-year-old interactive Digital TV solutions company based in Belgium. The acquisition of Reinhart gives NextPlay potential reach into tens of millions of households with its IGA, Video Game, FinTech, and Travel products.

Additionally, on March 30, 2022, NextPlay entered into an asset purchase agreement, pursuant to which it acquired certain assets of goPlay, a casual games tournament and gamification platform that also includes a perpetual license to the goPay payment platform, and a range of casual game assets that can be leveraged to distribute the HotPlay IGA and reward solutions throughout.

The Media Division provides multiple products and services focused on the In Game Advertising, In Game Rewards, Gamification, Competitive Gaming Tournaments and Connected TV Middleware solutions that collectively provide a feature rich gaming monetization platform that can be deployed at the Business-to-Business (“B2B”) or Business-to-Consumer (“B2C”) level by targeting game developers, game publishers and cryptocurrency industries. We believeTelco operators.

In addition to the most promising partvarious monetization platform components briefly described above, the Media Division’s Game Studio develops a range of casual games that are integrated with the In Game Advertising (“IGA”), In Game Rewards and goPlay gamification platform to enable developers, publishers, operators and brands alike to engage with and monetize their audience via the various go to market channels available to them through our business planoffering or their own channels.


These products and services are explained in more detail below.

The HotPlay In-Game Advertising and Rewards platform comprises multiple separate but related products that enable advertisements and rewards to be inserted in game, between game and post-game that allow brands to engage their audience in a relevant and inobtrusive fashion.

The In Game Advertising Software Developer Kits, available for games built on both the Unity game platform and JavaScript games, is a library that enables Developers to embed our technology within any Unity of JavaScript game that they are developing.

Once embedded, the flexible Developer Portal allows the Developer’s to easily configure, map and dynamically manage the In Game Advertising components to the respective “hostable” objects within the game.

The In Game Advertising Ad Portal allows advertisers and brands to deliver their campaigns and assign in game ads to the various “hostable” objects in the game within which the ads are to be deployed. These ads can either be traditional display ads, either with or without target links to click through, or digital coupon rewards that are automatically downloaded to the user’s digital wallet for redemption at some point in the future. The Ad Portal allows the advertisers to select their campaign target criteria in terms of demographic, region and impression or conversion targets and monitor the progress and generate campaign reports as the campaign plays out.

The HotPlay Redemption mobile application is a digital wallet that is used to collect the HotPlay IGA rewards issued throughout the game via the HotPlay IGA platform. These rewards can be purely digital, such as NFT based rewards, or digital to physical coupons that can be redeemed at competing stores and outlets participating in the campaigns.

The goPlay platform is both a gamification platform that encourages users to compete against each other via tournaments and challenges, plus a reward platform that rewards users for their continued loyalty and continuous game play by offering rewards for specific challenges and repeat visits to the platform. This provides brands with an opportunity to establish a longer, more dynamic, and continuous relationship with their consumers.

In addition to the gamification platform, the goPlay assets purchased by the Companyalso include an e-payment solution and gateway to multiple payment providers that allow users to make in game purchases of either digital or physical goods. We intend to extend this e-payment solution in the future to support crypto-currency payments aligned with the vision and roadmap for our FinTech offerings and solutions.

The HotPlay Games Studio is a game development studio that develops a range of casual games that include the HotPlay IGA platform features by default. The studio provides us with an in-house capability to deploy our abilityown range of casual games, plus the range of games available through the goPlay asset purchase agreement, providing a comprehensive portfolio of games that can be monetized by game publishers, operators and brands alike.

The “TV as a Service” (“TVaaS”) platform available to achieve shareholder valueNextPlay through Zappware is a complete end-to-end solution that includes media source ingest (satellite, terrestrial and digital), encoding and transcoding, packaging, protection, delivery, playback and analytics that provide Telco Operators with a one-stop shop for their digital media processing and delivery capabilities.

In addition to the core digital media delivery platform, the TVaaS solution also provides a client side Set Top Box (“STB”) and SMART TV middleware platform, associated application framework and corresponding, supporting Content Management System, that allows Operators to white label their own solutions on top of the Zappware platform to promote their own content through their existing partners and channels.


FinTech Division

The FinTech Division is developing an integrated digital financial platform (the “NextFinTech Platform”) offering mobile banking, investments into alternative assets, and insurance, to businesses and individuals, subject to regulatory approval.

The Company completed the acquisition of International Financial Enterprise Bank in July 2021, and organic growth that presents new opportunitiessubsequently renamed it NextBank International, Inc. (“NextBank”). Prior to the acquisition, NextBank generated revenue through the origination and selling of real estate loans in the leisure spaceUnited States and strengthens our existing technology platforms.continues to do so. NextBank typically receives an origination fee when issuing a loan and maintains a spread on the interest after the loans are sold. Currently, the Company is digitizing the bank and is configuring NextBank to grow with the rapid expansion of the digital asset industry, developing products and services that appeal to companies that are venturing into that industry. NextBank recently launched the first release of its mobile application in April 2022 and is migrating to DataPro’s core banking system to widen its capabilities and reach its scalability goals.

 

The Company, in accordance with Thailand’s foreign ownership laws, holds an indirect control of Longroot (Thailand) Company Limited (“Longroot”). Longroot is approved and regulated by the Thai Securities and Exchange Commission (“Thai SEC”) to operate as an Initial Coin Offering Portal (“ICO Portal”). The ICO Portal enables Longroot to crypto-securitize assets and conduct issuances of such assets. Through our subsidiaries NextTripthe ICO Portal, Longroot provides financial advisory and Maupintour (soontoken structuring services, and assists projects with regulatory approval and fundraising through sale of tokens. Longroot plans to crypto-securitize an array of high-quality alternative assets, such as video games and insurance. Management believes that these assets will create significant opportunities to accelerate the products and services within the FinTech division’s asset management business and plans to offer users the opportunity to invest in such assets via the NextFinTech Platform.

Effective November 16, 2021, the Labuan Financial Services Authority (the “Labuan FSA”)approved the Company’s application to carry on general insurance and reinsurance business, subject to certain conditions including (i) payment of a $15,000 annual license fee, (ii) submission of evidence reflecting paid up capital amounting to MYR $10.0 mil (approximately to $2,390,000 US), (iii) submission of proof of registration as a member of Labuan International Insurance Association, and (iv) submission of a Management Services Agreement with the appointed insurance manager, (v) submission of a Letter of Undertaking, and (vi) submission of constituent documents to the Registration of Company Unit. The conditions are to be rebrandedmet within 3 months of November 29, 2021, the date Labuan FSA issued a letter confirming the conditional approval. In May 2022, the Company received a permission letter from Labuan FSA to extend the establishment until August 31, 2022. The Company plans to use the general insurance license to issue primary insurance products and the reinsurance license to issue crypto-securitized insurance in collaboration with Longroot.

On October 14, 2021, “Longroot Inc.” (a subsidiary of the Company) changed its name to “Next Fintech Holdings, Inc.” The Company plans to use Next Fintech Holdings, Inc. as NextTrip Journeys), wethe holding company for the FinTech division.


Travel Division

Our Travel Division currently offers booking solutions for both business and leisure. We provide travel technology solutions with a primary emphasis on alternative lodging rental (ALR)(“ALR”) properties. Our proprietary Booking Engine, branded as NextTrip ConNextions, provides travel distributors access to a sizeable inventory of ALR properties allowing them to combine ALR with traditional components of travel (Air, Car, Cruise,(air, car, cruise, etc.).

Our industry-leading platform assists property managers in booking, and broadening the market for, their homes. The CompanyOur Travel Division serves three major constituents: (1) property managers, (2) travelers, and (3) other travel/lodging distributors. Property managers integrate their detailed property listings into the MonakerCompany’s Booking Engine with the goal of reaching a broad audience of travelers seeking ALRs, through distribution channels they could not access otherwise.

All of Monaker’sthe Company’s ALRs, also commonly referred to as Vacation Rentals are:

i)(i)Controlled by Property Management Companies. This is a key point of differentiation for Monaker,the Company, as the sole focus of Property Management Companies is to rent and service their properties, unlike an individual homeowner who often rents out their property on a casual or part-time basis. We believe working with property managers results in four key benefits:

All properties are Instantly Bookable (all Property Management Company inventory is integrated into Monaker’sthe Company’s Booking Engine allowing for instant confirmations);

Higher levels of service for renters (property managers are full-time operators);

Higher Quality Assurance (property managers generally have an incentive to eliminate trouble properties); and

Certified Rentable (most property managers are licensed and bonded requiring them to ensure properties are legal“legal to rentrent” and are further responsible for paying required taxes on behalf of homeowners.

ii)(ii)Exclusively Individual Units. Our vacation homes and residential resort units are never shared, nor do we rent rooms in homes like other ALR companies. All ALR inventory is fully furnished, privately owned residential properties, including homes, condominiums, apartments, villas and cabins that property managers rent to the public on a nightly, weekly or monthly basis.

We believe that Monaker business-to-business (B2B)the Company’s B2B ALR offerings are timely in addressing traditional travel distributors’ needs to protect their client base by allowing them seamless access to ALR products. With the rapid growth of companies like Airbnb, we believe that traditional travel companies are realizing that not having access to this high demand vacation rental inventory means risking the loss of their consumers to other ALR sites. By connecting to Monaker’sthe Company’s Booking Engine, travel distributors can sell ALR inventory alongside their existing travel products (i.e., Air/Car/Hotel/Cruise/Tourair/car/hotel/cruise/tour bookings). This solves a key issue by allowing the customers of traditional travel distributors to complete their entire vacation package booking on their website versus forcing them to go to an ALR website and potentially lose the entire booking.

Monaker’s Direct to Consumer Websites

MonakerThe Company has established a direct-to-consumer presence though a number of websites.


These sites include NextTrip.com,NextTripBusiness.com, our corporate travel management platform focused on small to medium-sized business, that provides companies the ability to book travel, manage travel expenses, and process employee expense reports. A differentiating feature of our NextTrip.comNextTripBusiness.com solution is the ability for corporate travelers to book ALR properties as part of their travel itinerary. Beyond access to our ALR inventory, Maupintour.com (soon to be rebranded as NextTrip Journeys),Journeys, provides personalized concierge tours and activities at destinations around the world. Our online marketplaces are discussed in greater detail below.


 

Monaker

The Company identifies and sources ALR properties which it consolidates through its Monaker Booking Engine, allowing for instantly bookable properties being packaged alongside other travel products; this is its distinguishing niche. The ALRs are owned and leased by third parties and are available to rent through Monaker’sthe Company’s websites as well as through other distributors. Monaker’sThe Company’s services include critical elements such as technology, an extensive film library, trusted brands and established partnerships that enhance product offerings and reach. We believe that consumers are quickly adopting video for researching and educating themselves prior to purchases, and Monakerthe Company has carefully amassed video content, key industry relationships and a prestigious travel brand as cornerstones for the development and deployment of core-technology on both proprietary and partnership platforms.

MonakerThe Company sells travel services to leisure and corporate customers around the world. Our primary focus is to incorporate ALR options into our current offerings of scheduling, pricing and availability information for booking reservations for airlines, hotels, rental cars, as well as other travel products such as sightseeing tours, shows and event tickets, and theme park passes. The Company sells these travel services both individually and as components of dynamically-assembled packaged travel vacations and trips. In addition, the Company provides content that presents travelers with information about travel destinations, maps and other travel details. In December 2020, the Company introduced its new corporate travel platform under the NextTrip brand. This platform allows our users to search large travel suppliers of alternative lodging inventories and combine ALR with their air and car booking.

In March 2018, the Company introduced Travelmagazine.com, an online travel publication with the aim of giving travelers around the world inspiration for future travel destinations and trips. The publication offers written articles, videos, and podcasts.podcasts created by staff writers and worldwide content providers. Moving forward, we hope thatintend to incorporate the Metaverse into Travelmagazine.com, will becomeallowing tourist boards, destination management companies, and other travel suppliers to showcase their products by allowing travelers to virtually explore destinations around the world. This strategy aligns with our goal to make Travelmagazine.com a central hub of informationcontent for travelers who are looking to get detailed information on destinations all around the world. We also plan to move Travelmagazine.com from having content created by a team of staff writers, to a team of worldwide writers who will contribute content for publication in the future, funding permitting. The website is expected to be supportedgenerate revenue through advertising by advertisingfrom tourist boards, travel suppliers, and allow for promotion of both ALR and Maupintour vacation products.NextTrip.

The Company sells its ALR travel inventory through various distribution channels. The primary distribution channel is through its business-to-business (B2B)B2B channel partners, which include sales via (i) other travel companies’ websites and (ii) networks of third-party travel agents. Secondary distribution is planned to occur through the Company’s own websites at Maupintour.com (soon to be rebranded as NextTrip Journeys)Nexttripjourneys.com and NextTripbusiness.com. Additionally, we anticipate offeringoffer high end ALR products along with specialty travel products and services via NextTripjourneys.com, targeting high value inventory to customers with complex or high-end travel needs, upon its launch which is scheduled for August 2021.needs.

Monaker’sThe Company’s core travel related holdings are planned to behave been streamlined by this summer into four key platforms being;platforms: the MonakerCompany’s Booking Engine (MBE) branded as NextTrip ConNextions, Nexttripbusiness.com, NextTrip.com, Maupintour.com, which will be rebranded as NextTripjourneys.com,NextTripJourneys.com and TravelMagazine.com.

ØThe MonakerCompany’s Booking Engine, (MBE), branded as NextTrip ConNextions is the Company’s proprietary technology and platform providing access to more than 3.2 million instantly bookable vacation rental homes, villas, chalets, apartments, condos, resort residences, and castles. This ALR product can be accessed by other travel distributors using the Company’s API.

Ø
ØNextTripbusiness.com is targeted at small to midsized businesses offering them a customized travelan enterprise-travel solution for business travel to meetings, conferences, conventions or even vacation travel and gives the companies lower costs, better expense control and in the future the option for a self-branded“self-branded” website. The website is expectedwas launched in August 2021, and continues to be completed and operational in August 2021.updated with features requested by our corporate travel customers.


ØMaupintour, soon to be rebranded as NextTrip Journeys (NextTripJourneys.com),
ØNextTripJourneys.com is expected to be our primary consumer website where travel services and products are booked.the Company’s leisure product website. The travel services and products currently include airlines, hotels, car rentals, and our worldwide ALR inventory. Additionally, NextTrip Journeys offersoffer high-end personalized land tour packages, cruise vacations, and specialized ALRs that cannot be booked on a real-time basis. These ALRs tend to be sourced from owners and managers who have not invested in a reservation management system and/or the owner or manager prefers to personally vet the customer before accepting a booking; typically, because the ALR is a high value property.  In fall 2022, the Company will launch a packages product focused on key leisure destinations around the world.  The packages product will provide customers discounted travel by combining air and hotel into a single package price.  Additionally, the Company expects to offer a travel agent portal in late 2022 to allow third-party agencies access to our packages, tours, and cruise inventory.

Ø
ØTravelmagazine.com, an online travel publication with the aim of giving travelers around the world inspiration for future travel destinations and trips. The publication offers written articles, videos, and podcasts. Moving forward, we plan for Travelmagazine.com to become a central hub of information for travelers who are looking to get detailed information on destinations all around the world.


 

Cryptocurrency Portal

As discussed in greater detail below under “Recent Material Events—Longroot Stock Purchase Agreement”, on November 16, 2020, the Company acquired 100% of Longroot, Inc., a Delaware corporation (“Longroot”), which in turn owned 57% of Longroot Limited, a Cayman Islands company (“Longroot Cayman”). Longroot Cayman owned 49% of the outstanding ordinary shares (with 51% of the Preferred shares owned by two Thai citizen nominee shareholders) of Longroot Holding (Thailand) Company Limited (“Longroot Thailand”), provided that Longroot Cayman controls 90% of Longroot Thailand’s voting shares and therefore effectively controls Longroot Thailand. Longroot has since increased its ownership in Longroot Cayman and currently Longroot owns an approximate 36.75% indirect interest in Longroot Thailand, due to its ownership of 75% of Longroot Cayman, which in turn owns 49% of Longroot Thailand (75% x 49% = 36.75%)), provided that Longroot Cayman controls 90% of Longroot Thailand’s voting shares and therefore effectively controls Longroot Thailand.

Longroot Thailand provides blockchain technology solutions for the fast-growing cryptocurrency marketplace. Longroot Thailand is an Initial Coin Offering (ICO) portal operator authorized and regulated under the Thai Digital Asset Business Law and licensed by the Thai Securities and Exchange Commission. Longroot Thailand provides fully regulated and licensed digital assets financing, and investment services for digital assets. This innovative business model opens the door for new digital currency financing mechanisms, and new digital investment products. Monaker, with its indirect control over Longroot Thailand, is planning to use Longroot Thailand’s technology and digital asset capabilities to create regulated cryptocurrencies designed to allow consumers to invest in unique revenue streams in wholesale travel, real estate homes and hotels, gaming assets and digital advertising – as well as potential token and loyalty program opportunities complementary to Monaker’s planned gaming (with the acquisition of HotPlay) and current travel businesses.

Travel Products and Services

Monaker plans to focus on marketing ALR options directly to consumers and to other travel distributors. The Company’s concentration on ALRs is driven by contracts with vacation home (including timeshare) unit owners and managers that make their properties available to consumers and to other travel portals (Distributors) for nightly or extended stays. In addition, we offer travelers activities and tours through our subsidiary, Maupintour (soon to be rebranded as NextTrip Journeys).NextTripJourneys.com. Therefore, not only can we assist a traveler with identifying a destination and the lodging at the destination, but we can provide options of activities while at the destination. We also provide the means for making arrangements for airline tickets, car rentals and lodging (i.e., hotels and ALRs in the near future).lodging. In summary, Monaker offerswe offer travelers the complete travel package made easy or... Travel Made EasyTM.

The average ALR search and booking takes a few hours while the average vacation planning process typically involves the consumer visiting up to seven travel websites and spending over 10 hours to book their vacation (according to Susan Ho, Founder of Journy). We believe the NextTrip.com websiteNextTripBusiness.com and NextTripJourneys.com websites using the above features should reduce ALR/Vacation planning time from hours to minutes and with the convenience of one site (truly Travel“Travel Made EasyEasy”).


Products and Services for Property Owners and Managers

Listings.Listings. Property owners and managers are able to list a property, with no initial upfront fees, and provide those listings to us at a negotiated preferential rate for traveler bookings generated on our websites. Listings that are ‘real-time online bookable’ properties will be managed by the property owner or manager through an application program interface (API)(“API”), which will provide real-time updates to each property and immediately notify the property owner or manager of all information regarding bookings, including modifications and cancellations. Information such as content, descriptions and images are provided to us through that API.

Listings that are request-accept“request-accept” properties will require communication and approval from the property owner or manager and will not be managed through an API (as discussed above). We will provide a set of tools for the property owner or manager that will enable them to manage an availability calendar, reservations, inquiries and the content of the listing. These tools will allow the property owner or manager to create the listing by uploading photographs, text descriptions or lists of amenities, a map showing the location of the property, and property availability, all of which can be updated throughout the term of the listing. Each listing will provide travelers the ability to use email or other methods to contact property owners and managers.

The listings include tools and services to help property owners and managers run their vacation rental businesses more efficiently: responding to and managing inquiries, preparing and sending rental quotes and payment invoices, allowing travelers to book online and, enter into rental agreements, and processing online payments. Property owners and managers who elect to process online payments will be subject to a transaction fee.

Redistribution of Listings.Listings. We make selected, online bookable properties available to online travel agencies as well as channel partners (jointly referred to as Distributors“Distributors”). We are compensated for these services by receiving a commission that is added to the negotiated net rate for each booking.

Products and Services for Travelers

Search Tools and Ability to Compare. Our online marketplace NextTripJourneys.com provide travelers with tools to search for and filter several travel products including air, car, accommodations (including ALRs) and activities based on various criteria, such as destination, travel dates, type of property, number of bedrooms, amenities, price, or keywords.

Traveler Login.Login. Travelers are able to create accounts on our website(s) that give them access to their booking activity through the website.

Travel Blog.Blog. Travel guides, videos and pictures as well as travel articles can be accessed through Travelmagazine.com.

Security.Security. We use a combination of technology and human review to evaluate the content of listings and to screen for inaccuracies or fraud with the goal of providing only accurate and trustworthy information to travelers. Our company is Payment Card Industry (PCI)(“PCI”) compliant to ensure the safety and security of our customer credit card data.

Communication.Communication. Travelers who create an account on our website will receive regular communications, including notices about places of interest, special offers, new listings, and an email newsletter. The newsletter will be available to any traveler who agrees to receive it and offers introductions to new destinations and vacation rentals, as well as tips and useful information when staying in vacation rentals.


 

Mobile Websites and Applications.Applications. We provide versions of our websites formatted for web browsers, smart-phones and tablets so that property owners, managers and travelers can access our websites and tools from mobile devices.

To date, we have focused on developing our booking engine and establishing relationships with suppliers to increase the size of our instantly bookable inventory. The booking engine has produced little revenue to date because, among other reasons, of the limited number of widely-used distribution partners with which we have been able to establish relationships. We have recently begun contractingare finalizing certification with established, widely-used distribution partners to make our inventory available through their distribution channels. The success of the booking engine will depend on users of those distribution partners booking properties supplied by our booking engine, and on our ability to expand the number of such distribution partners that utilize our booking engine.


The Company has completed integrating several distributors for the booking of our ALR products and the Company continues to integrate suppliers of ALR products. We now have more than 3.2 million properties listed on our booking engine.

Competition

Media Division

With the large global gamer population, the rising trend of digital advertising, and growing interest in the Metaverse, HotPlay expects increasing competition as companies seek to deliver in-game advertising that do not disrupt game play. Currently, HotPlay competes directly with: 

 

Products

games that manually insert native advertisements in the form of:

static in-game ads that could not be changed once games are released; or

campaigns where brands integrate advertising content with gameplay, requiring high upfront investment and development effort;

games created specifically to promote a brand; and

in-game advertising platforms that deliver native impression ads, typically in the form of in-game billboards

Given HotPlay’s ability to deliver fungible ads that do not disrupt gameplay and Servicesthat requires a lower integration effort, management believes that the HotPlay Platform compares favorably with those direct competitors.

HotPlay also competes indirectly with other advertising platforms that deliver in-game advertisements in forms that disrupt gameplay, such as platforms delivering impression ads, click through ads, and rewarded video ads.

The market for Cryptocurrency Investorsplatforms offering a game portfolio and tournament features is also highly competitive with the continuing rise of e-sports and need for platforms and service providers to increase engagement with their users. Several businesses including e-commerce and streaming businesses have recently included casual games to their portfolio. HotPlay competes directly with these businesses and service providers offering white-labeled solutions to such businesses. However, management believes that the integration of non-disruptive advertising and real-world rewards allows HotPlay to compete favorably with these direct competitors.

 

ICO Portal. Through our indirect controlOn this front, HotPlay also competes indirectly with e-sports platforms and game streaming platforms that offer different categories of Longrootgames such as mid-core and hard-core games.


Reinhart Interactive TV competes directly with other end-to-end TV as a service (“TVaaS”) providers offering media content delivery solutions to telco companies as well as telecommunication companies that implement their own solutions. We also compete indirectly with other media content providers such as Over the Top (“OOT”) platforms and video streaming platforms.

FinTech Division

The market for fundraising via regulated ICOs in Thailand we,is still in an early stage. Under the Thai SEC’s Thai Royal Decree, any offering of digital assets must be made through Longroot Thailand, offer an ICO Portal locatedapproved by the Thai SEC. The ICO Portal is responsible for carrying out due diligence on an issuer and conducting the actual offering. There are currently seven Thai SEC approved ICO Portals, and Longroot competes directly with them in Thailand. With the increased acceptance of cryptocurrencies and adoption of blockchain technology, our management believes that there will be more ICO Portals approved, increasing the number of direct competitors.

As Longroot does not limit its offerings to the Thai market, it also competes directly with financial institutions that facilitate financing through the sale of regulatory compliant digital assets globally.

The market for fundraising via the sale of digital assets backed by tangible assets is still at Longroot.com,a nascent stage. However, as many regulators worldwide become increasingly accepting of token offerings, management believes that provides investorsregulatory compliant token offerings will become more commonplace. While this could result in more business opportunities for Longroot, it is also likely to translate to an increase in competition. 

Longroot also competes indirectly with companies facilitating more traditional avenues of raising funds, such as investment banks that underwrite initial public offerings or bond issuances, and commercial banks offering direct loans to businesses. However, management believes that the advantages of digital assets offerings, such as the ability to securitize alternative assets, provide a high degree of flexibility on deal structure, and the reliability offered by blockchain technology could give Longroot a competitive advantage.

The banking industry is highly competitive and NextBank competes directly with other traditional banks and digital banks for deposits and origination of loans. Management believes that NextBank is able to compete effectively through the provision of concierge services for depositors, and the ability to originate loans and disburse funds, without compromising on the required due diligence, more quickly than its competitors.

The FinTech market is growing rapidly, with new entrants constantly entering the market. As NextFintech adopts a FinTech model, offers card services, and builds products to support the growing digital investment productasset industry, NextBank expects to compete directly with crypto-focused, blockchained based financial services companies and gives suppliers a new digital currency financing mechanism. Monaker,payment companies. However, through its indirect controlthe combination of Longroot Thailand, is planning to use thetraditional banking and financial technology, and digital asset capabilitiesthe undertaking of new initiatives in a regulatory compliant manner, Management believes that NextBank is well-positioned to create regulated cryptocurrencies designedexecute a growth strategy to allow consumers to invest in unique revenue streams in wholesale travel, real estate homes and hotels, gaming assets and digital advertising – as well as potential token and loyalty program opportunities complementary to Monaker’s gaming (planned throughachieve our mission of creating a diversified financial solution for the acquisition of HotPlay) and travel businesses.global economy.


 

The Company is a Nevada corporation headquartered in Weston, Florida.

Travel Division

Planned Future Operations

As described in greater detail below under “Recent Material Events—HotPlay and Axion Share Exchanges”, “Recent Material Events—Reinhart Interactive TV AG and Zappware N.V. Acquisition”, and “Recent Material Events—IFEB Bank Transaction”, the Company is in the process of completing the acquisition of HotPlay, which has developed a next generation in-game advertising (IGA) solution that harmonizes engagement between businesses and video gamers, has acquired 51% of Reinhart TV AG, which is in the business of providing a software-based TV and video distribution platform to telecom operators and digital content owners and providing services to telecom operators and digital content owners for user interaction design, as well as software development, deployment and support, and is in the process of completing the acquisition of control of International Financial Enterprise Bank, Inc., a Puerto Rico corporation licensed as an Act 273-2012 international financial entity headquartered in San Juan Puerto Rico (IFEB).

Moving forward, assuming the completion of the acquisition of HotPlay and IFEB bank, the Company anticipates the majority of its operations will transition to those of HotPlay, provided that the Company plans to continue to pursue cryptocurrency and banking operations through Longroot and IFEB. The Company is also excited about the prospects of the Reinhart TV AG acquisition.

Competition

The market to provide listing, searching, and marketing services whether they are for ALR, activities and tours, airline bookings, car rentals or hotel stays is highly competitive and fragmented with limited barriers to entry. Each of the ALR services that we will provide to property owners, managers and travelers is currently offered by competitors. Furthermore, ALRs are not typically marketed exclusively through any single channel, and many of our listing agreements are not exclusive, potentially allowing our competitors to aggregate a set of listings like ours. We believe we will compete primarily based on the quantity, quality, and nature of the properties offered on our websites. The majority of ALRs that will be offered in our marketplace reflect a whole house or property rather than a room. In addition, we anticipate that we will benefit from the quality of the direct relationships we have with property owners and managers, the global diversity of the ALRs available on our websites, the quality of our websites, the tools provided to our property owners and managers, the strength of our brands, and the success of our marketing programs and price.


Our principal competitors in the travel space include:

otherOther vacation and short-term rental listing websites, such as TripAdvisor.com, HomeAway.com, VRBA.com, Booking.com and Airbnb.com;

websitesWebsites that list both rooms to rent as well as ALRs, such as Airbnb.com, Booking.com, HomeAway.com and VRBO.com;

professionalProfessional property managers who charge a percentage of booking revenue for their services, such as Wyndham Worldwide Corp. and InterHome, AG;

hotelsHotels that offer large rooms and amenities common in ALRs, such as Hyatt Vacation Clubs and Four Seasons Resorts;

websitesWebsites that aggregate listings from property managers who advertise and take bookings on behalf of property managers, such as Perfect Places, Inc., Atraveo and E-Domizil;

onlineOnline travel websites, such as those operated by Expedia.com, Hotels.com, Kayak.com, Booking.com, Orbitz.com, Priceline.com and Travelocity.com, that have traditionally provided comprehensive travel services and may expand or are now expanding into the ALR category;

timeshareTimeshare exchange companies, such as Interval International, Inc. and RCI, LLC;

largeLarge Internet companies, such as Craigslist, Inc., eBay Inc., Google Inc., MSN.com and Yahoo!, which provide vacation rental listing or search services in addition to a wide variety of other products or services; and

offlineOffline publishers of classified vacation rental listings, including regional newspapers and travel-related magazines.

The market for fundraisingResearch and Development

Media Division

We have developed proprietary systems based on patent pending technologies to create, maintain and operate our media based websites, services and platforms. These technologies comprise systems developed by internal and third-party designers, developers and engineers and software acquired, licensed or open-sourced from outside developers and companies. Our systems are designed to serve our internal game studio, other third-party game developers and advertisers at both the Business-to-Business (“B2B”) and Business-to-Consumer (“B2C”) level via regulated Initial Coin Offeringsa range of business models, including recurring license fees, Cost-per-mille (“ICOCPM”), Cost-per-action (“CPA”) and revenue share advertising models.

FinTech Division

NextBank has focused on identifying and implementing technology solutions, such as updated core banking systems and transaction security, compliance and monitoring systems, and is moving rapidly to integrate with payment providers and exchanges. After launching the first release of its mobile banking app in ThailandApril 2022, NextBank is still atworking on fortifying security and scalability, adding features and capabilities, and expanding supported platforms to include all popular mobile and desktop devices.

Longroot has put considerable resources into researching technology solutions, such as suitable blockchain protocols and third-party security services, and has developed a proprietary system that serves its clients and internal operations, while complying with the nascent stage. Under Thailand’s Securities and Exchange Commission’s (“Thai SEC”) Thai Royal Decree, any offeringrules of digital assets must be made through an ICO Portal approved by the Thai SEC. TheIts systems are designed to onboard investors on to the ICO Portal is responsible for carrying out due diligence on an issuer and conducting the actual offering.

At present, only four ICO Portals, including Longroot Thailand, have been approved by the Thai SEC and Longroot Thailand competes directly with them. With the increased acceptance of cryptocurrencies and adoption of blockchain technology, HotPlay management believes that there will be more ICO Portals approved, increasing the number of direct competitors.

Longroot Thailand also competes indirectly with companies facilitating more traditional avenues of raising funds, including investment banks that underwrite initial public offerings or bond issues, commercial banks offering direct loansPlatform in a compliant manner, offer access to businesses, and others. However, HotPlay management believes that advantages of digital assets offerings,information related to individual ICOs, such as the ability to securitize alternative assets, provide a high degree of flexibility on deal structure,their prospectus, and that the reliability offered by blockchainparticipate in ICOs.

Costs associated with our research and development were included as capitalized development costs or, included in several expenses including technology could give Longroot Thailand a competitive advantage. Furthermore, the Thai SEC ICO Portal is allowed to offer digital assets to both retail and institutional investors, giving issuers access to a wider investor market.development, salaries, and benefits and in general and administrative expenses.


 

Seasonality

Property owners and managers tend to list their properties when travelers are most likely to make vacation plans. The timing primarily depends on whether travelers are taking a winter or summer vacation and tends to vary by country. The highest level of listings is expected in the first quarter of a year, which is typically when travelers are making plans for summer vacations in the United States and Europe. The lowest level of listings is expected in the third quarter. By the fourth quarter, property owners and managers of winter vacation destinations will be listing their properties in time to meet the needs of travelers planning those trips. Other vacation areas outside of the United States and Europe also have seasonality, which may not be reflected in the same quarters (for example, winter and summer months are reversed in the southern hemisphere).

As the listings grow, the seasonality of those transactions may result in higher revenues in the summer and winter vacation months. We also expect seasonality in the number of visitors to our websites, with the first quarter having the highest number of visitors.

Notwithstanding the above, adverse economic conditions, or pandemics, including COVID-19, could result in future seasonal patterns that are different from historical trends.


Research and DevelopmentTravel Division

We have developed proprietary systems to create, maintain and operate our websites. This technology consists of systems developed by internal and third-party designers, developers and engineers and software acquired or licensed from outside developers and companies. Our systems are designed to serve other property distributors, property owners, managers, and travelers in an automated and scalable fashion.

Technology and Infrastructure

Media Division

Our websites and platforms are hosted using cloud services distributed globally across multiple regions. Our systems have been designed to automatically scale on demand at both the B2B and B2C levels to maintain an extremely high level of availability, regardless of end user demand. Industry leading cloud based security system are in place to protect our platforms from unauthorized access and data breaches. Where possible, the services have been designed in a cloud agnostic manner to minimize the dependency on any single cloud provider and facilitate deployment across multiple cloud providers, as necessary.

FinTech Division

NextBank is transitioning to Datapro’s core banking system in order to enhance its capabilities and support its growth and scalability goals. Datapro develops and deploys advanced software solutions specifically designed to meet the changing needs of financial institutions worldwide. With a singular focus on the banking/financial services sector, Datapro uses cutting edge technologies and hands-on expertise to simplify all banking processes from data management and customer relationship functions to national/international regulatory compliance.

To further enhance compliance and transaction monitoring, NextBank is using Ocean Systems’ software. Ocean Systems, Inc. (“OSI”) is a software development company specializing in Compliance and Electronic Funds Transfer (“EFT”) applications for the financial and banking industry. They provide compliance solutions related to bank payment systems concerning Automated Clearing House (“ACH”), Wire Transfers, Automated Teller Machine (“ATM”), and Point of Sale (“POS”).

NextBank is committed to adhering to the highest level of security. Leveraging Amazon Web Services’ (“AWS”) infrastructure allows security configurations to be tightened. Strengthening NextBank’s network security enables stable scalability. Additionally, NextBank uses EnCirca, a registrar that provides supports domain name registrations and provides trademark protections services, as its registrar. They are one of only a small handful of registrars authorized to host .Bank domains. As the leading Internet Corporation for Assigned Names and Numbers (“ICANN”) registrar for the .Bank extension, EnCirca is well-equipped to offer state-of-the-art technology services for hosting secure websites and email.

Longroot Thailand’s proprietary ICO Portal Platform is built upon a number of innovations that allow it to serve investors, issuers, and the Longroot Thailand internal team in a secure and compliant manner. The platform leverages the Ethereum network, giving investors and issuers access to an ecosystem of services, such as secondary markets, exchanges, custodians, insurers, and decentralized finance services.

The platform also includes an integrated Securities Tokenization Offering technology. Not only does the technology allow Longroot Thailand to tokenize assets that are fully compliant with Thailand’s Royal Decree on Digital Assets Businesses, we believe that it will also allow Longroot Thailand to conduct similar offerings in other jurisdictions in the future, thereby enabling Longroot Thailand to expand its operations.

The infrastructure has a high level of reliability and is designed to allow Longroot Thailand to scale efficiently while maintaining the security levels required of a financial services operator. The platform is hosted using a combination of third-party data centers powered by Google Cloud Platform (“GCP”) and associated security services provided by other third parties. The high level of redundancy provided by GCP and designed into its infrastructure helps ensure that Longroot Thailand can reliably serve clients globally, 24x7. Longroot Thailand also uses security methods to ensure the integrity of its networks and protection of confidential data collected and stored on its servers. Longroot Thailand has put considerable resources into researching technology solutions, suchdeveloped internal policies and procedures to protect the information of investors and issuers that it collects and uses as suitable blockchain protocolspart of its normal operations. Access to its networks, and third-party security services,the servers and has developed a proprietary system that serves its clients and internal operations while complying with the Thai SEC. Its systems are designed to onboard investorsdatabases, on to the ICO Portal Platform in a compliant manner, offer access to information related to individual ICOs, such as their prospectus, and participate in ICOs.which confidential data is stored, is protected by industry standard firewall technology.


 

Costs associated with our research and development were included as capitalized development costs or, included in several expenses including technology and development, salaries, and benefits and in general and administrative expenses.

Travel Division

Technology and Infrastructure

Our websites are hosted using cloud services distributed globally across multiple regions. Our systems architecture has been designed to manage increases in traffic on our websites through additional computing power without making software changes. Our cloud services provide our online marketplace with scalable and redundant Internet connectivity and redundant power and cooling to our hosting environments. We use security methods to ensure the integrity of our networks and protection of confidential data collected and stored on our servers, and we have developed and use internal policies and procedures to protect the personal information of our property owners, managers and travelers using our websites that we collect and use as part of our normal operations. Access to our networks, and the servers and databases, on which confidential data is stored, is protected by industry standard firewall and encryption technology(s).technology. Physical access to our servers and related equipment is secured by limiting access to the data center to operations personnel only. Costs associated with our web hosting operation are included in general and administrative costs.

Intellectual Property

The Company currently holds a wide range of intellectual property relating to software and products across its different divisions. This includes patent pending products, copyrights, registered and unregistered trademarks, trade secrets, industrial designs, registered domain names, and other forms of intellectual property rights.

Media Division

The Media Division intellectual property includes the HotPlay in-game advertising platform, which consists of the game developer portal, advertiser portal, redemption application, and Software Development Kit (“SDK”), artificial intelligence powered video game development technology, and proprietary casual games, as well as Zappware’s digital TV platform.

 

Longroot Thailand’s proprietaryAt the Media Division, the Company has filed patent protection for HotPlay’s in-game advertising technology and Make It Games’ Artificial Intelligence animation technology.

FinTech Division

The FinTech division intellectual property includes the NextBank mobile banking platform, Longroot’s ICO Portal, Platform is built upon a number of innovations that allow it to serve investors, issuers,Token IQ’s securities token offering technology, and the Longroot Thailand internal team in a secureproducts and compliant manner. The platform leverages the Ethereum network, giving investors and issuers access to an ecosystem of services such as secondary markets, exchanges, custodians, insurers, and decentralized finance services.

The platform also includes an integrated Securities Tokenization Offering technology. Not only does the technology allow Longroot Thailand to tokenize assets that are fully compliant with Thailand's Royal Decree on Digital Assets Businesses, it will also allow Longroot Thailand to conduct similar offerings in other jurisdictions in the future, thereby enabling Longroot Thailand to expand its operations.

The infrastructure has a high level of reliability and is designed to allow Longroot Thailand to scale efficiently while maintainingsupport the security levels required of a financial services operator. The platform is hosted using a combination of third-party data centers powered by Google Cloud Platform (GCP) and associated security services provided by other third parties. The high level of redundancy provided by GCP and designed into its infrastructure helps ensure that Longroot Thailand can reliably serve clients globally, 24x7. Longroot Thailand also uses security methods to ensure the integrity of its networks and protection of confidential data collected and stored on its servers. Longroot Thailand has developed internal policies and procedures to protect the information of investors and issuers which it collects and uses as part of its normal operations. Access to its networks, and the servers and databases, on which confidential data is stored, is protected by industry standard firewall technology.digital asset industry.

 

Intellectual PropertyAt the FinTech division, the Company has filed patent protection for Token IQ’s security token offering technology.

OurTravel Division

The Travel division intellectual property includes the travel management platform and property management solution for alternative lodging properties, the content of our websites, our registered domain names, our registered and unregistered trademarks, contracts with third party property managers and distributors. We believe

The Company believes that ourits intellectual property is an essential asset of ourits business and that our registered domain names and our technology infrastructure will givegives us a competitive advantage in the online market for ALR listings and arrangements with attractions and tour operators.advantage. We rely on a combination of trademark, copyright and trade secret laws in the United States and internationally, as well as contractual provisions, to protect our proprietary technology and our brands. We also rely on copyright laws to protect the appearance and design of our sites and applications, although to date we have not registered for copyright protection on any particular content. We have registered numerous Internet domain names related to our business in order to protect our proprietary interests. We alsogenerally enter into confidentiality and invention assignment agreements with our employees and consultantscontractors, and seekconfidentiality with third parties. The Company also files patent applications to control access toprotect innovations arising from our research and distribution of our proprietary information in a commercially prudent manner. Thedevelopment.

These efforts we have taken to protect our intellectual property may not be sufficient or effective and despite these precautions, itwe may not receive approval on our pending patents. It may be possible for other parties to copy or otherwise obtain and use the content of our websites or ourits platform and brand names without authorization.


 


The primary web properties are:

Employees

monakergroup.com
nexttrip.com (and nextrip.com)
nexttripvacations.com
nexttrip.biz
maupintour.com
exvg.com (and extraordinaryvacations.com)
travelmagazine.com

Longroot Thailand’s intellectual property includes the ICO Portal Platform, its registered domain, its registered and unregistered trademarks, and its status as a Thai SEC’s approved ICO Portal that was obtained after going through a rigorous process that included approval of its business plan and audits of its internal processes and technology, which took close to two years to complete.

We believe that Longroot Thailand’s intellectual property is an essential asset of its business and that its ICO Portal status, registered domain names and technology infrastructure will give it a competitive advantage. Longroot Thailand relies on a combination of trademark, copyright and trade secret laws as well as contractual provisions, to protect its proprietary technology and brands. It also relies on copyright laws to protect the appearance and design of its sites and applications, although to date it has not registered for copyright protection on any particular content. Longroot Thailand has registered numerous Internet domain names related to its business in order to protect its proprietary interests. Longroot Thailand also enters into confidentiality and invention assignment agreements with its employees and consultants and seeks to control access to and distribution of its proprietary information in a commercially prudent manner. The efforts Longroot Thailand has taken to protect its intellectual property may not be sufficient or effective, and, despite these precautions, it may be possible for other parties to copy or otherwise obtain and use the content of its Platform or our brand names without authorization.

Longroot Thailand’s primary web properties are:

● www.Longroot.com

● portal.Longroot.co.th

● sign-up.Longroot.co.th

Employees

WeOn average, we employed 18approximately 250 full-time employees as ofthroughout the date of this Report.reporting period. Additionally, we use independent contractors and temporary personnel to supplement our workforce, particularly in the software development and technology tasks. Our employees are not represented by a labor union, and we consider our employee relations to be very good. Competition for qualified personnel in our industry has historically been intense, particularly for software engineers, developers, and other technical staffs.

Longroot Thailand employs three full-time employees as of the date of Report. Additionally, Longroot Thailand uses independent contractors and temporary personnel to supplement its workforce, particularly in the software development and technology tasks. Its employees are not represented by a labor union and it considers its employee relations to be very good. Competition for qualified personnel has historically been intense, particularly for software engineers, developers, and other technical staff.


Employee Development, Attraction and Retention: The development, attraction and retention of employees is a critical success factor for the Company and its operating units for succession planning and sustaining our core value drivers. To support the advancement of our employees, we offer training and development programs encouraging advancement from within and strive to fill our team with strong and experienced management talent. We leverage both formal and informal programs to identify, foster, and retain top talent at both the corporate and operating unit level.

Diversity and Inclusion: The Company believes that its rich culture of inclusion and diversity enables it to create, develop and fully leverage the strengths of its workforce to exceed customer expectations and meet its growth objectives. The Company places a high value on inclusion, engaging employees in our programs staffed by employees with diverse backgrounds, experiences or characteristics who share a common interest in professional development, improving corporate culture and delivering sustained business results.

Segments

We operate as one operating segment consisting of products and services related to our online travel services and cryptocurrency marketplaces. Our travel services are composed of the following services:

The Monaker Booking Engine (MBE), branded as NextTrip ConNextions, is the Company’s proprietary technology and platform providing access to more than 3.2 million instantly bookable vacation rental homes, villas, chalets, apartments, condos, resort residences, and castles. MBE offers travel distributors and agencies an industry first: a customizable, instant-booking platform for alternative lodging rental. MBE is also becoming a driving force and differentiator for the Company’s in-house brands Maupintour and NextTrip.com.

Maupintour is a historic 70-year-old tour company tracing its roots back to the late 1940s as a well-known and respected name in the travel industry.  Maupintour is widely recognized by its customers and established travel agencies for creating outstanding & unique itineraries.  Historically, Maupintour experienced admirable repeat customer rates and continues to have strong brand recognition in the tour packaging community.  Maupintour will be rebranded to NextTrip Journeys (NextTripJourneys.com) in summer 2021 to reflect a re-energized brand with increased offerings including land tour packages, cruise vacations, airlines, hotels, car rentals, and specialized ALRs that cannot be booked on a real-time basis.

NextTripbusiness.com launched in December 2020, is a corporate booking and expense management solution for small to midsized businesses, enabling them to sign up, create accounts for employees, control expenditures and reduce overall business travel expenses though its access to wholesale travel inventories.

Travelmagazine.com is an online travel publication with the aim of giving travelers around the world inspiration for where to go next. The publication includes a library of travel footage as part of its offerings of written articles, videos, and podcasts.

Longroot Thailand operates as one operating segment consisting of the ICO Portal Platform where applicable investors are able to sign up and invest in available ICOs, and issuers can issue tokens and list information related to their offerings. The Platform has been approved by the Thai SEC and is built in a manner that enables the Longroot Thailand internal team to conduct the necessary checks to ensure compliance with applicable regulations.

Other Investments

As part of prior business transactions, and in many cases, in lieu of requiring counterparties to pay us cash consideration for certain dispositions, we have accepted and/or retained securities in various entities (including former subsidiary companies). As described below, we are currently in the process of liquidating those securities in an effort to increase liquidity and we do not intend to hold such securities.


We assess the potential impairment of our equity method investments when indicators such as a history of operating losses, negative earnings and cash flow outlook, and the financial condition and prospects for the investee’s business segment might indicate a loss in value.

Verus International, Inc and NestBuilder.com Corp (OTCMKTS:VRUS)

We have recognized an impairment loss on investment in unconsolidated affiliate. As of February 28, 2021, and February 29, 2020, Monaker owned 3,845,101 and 61,247,139 shares of Verus International, Inc. (formerly known as RealBiz Media Group, Inc. (“Verus”)) Series A Convertible Preferred Stock, respectively. This interest was written down to zero ($0) as of February 28, 2015. On January 13, 2021, Verus completed a 1-for-500 reverse stock split which has been retroactively reflected in the discussion below.

On April 10, 2019 and effective on February 8, 2019, we entered into an Inducement Agreement with Verus. Pursuant to the Inducement Agreement, we agreed to amend the designation of the Series A Convertible Preferred Stock of Verus (the “Series A Preferred Stock”)(of which we held 44,470,101 shares of Series A Preferred Stock at the time of the entry into the Inducement Agreement, which converts into common stock of Verus, and votes on all stockholder matters, on a one-for-500 basis, subject to the Ownership Blocker (discussed below)), to remove certain anti-dilution rights described therein; and Verus agreed to issue us 304,060 shares of its common stock, following Verus’ then planned increase in authorized shares of common stock, pursuant to the anti-dilution rights of that certain Settlement Agreement by and among the Company, Verus, AST and NestBuilder discussed above. The designation of the Series A Preferred Stock, as amended, includes a 9.99% beneficial ownership limitation, preventing the Company from converting such Series A Preferred Stock into common stock of Verus (and reducing the voting rights of such preferred stock proportionally), if upon such conversion, the Company, its affiliates and/or any group which it is a part of, would own greater than 9.99% of Verus’ common stock (the “Ownership Blocker”).

On April 16, 2019, Verus filed a Certificate of Amendment (the “Amendment”) to its Amended and Restated Certificate of Incorporation, as amended, to increase its authorized common stock from 1,500,000,000 shares to 7,500,000,000 shares and to decrease the par value of its common stock and preferred stock from $0.001 per share to $0.000001 per share. On April 23, 2019, Verus issued us the 304,060 shares of common stock.

On October 29, 2019, the Company entered into Stock Purchase Agreements with (a) Monaco Investment Partners, LP, of which Donald Monaco is the managing partner and a member of the board of directors of the Company; (b) Simon Orange, a member of the board of directors of the Company; and (c) William Kerby, the Chief Executive Officer and director of the Company. Pursuant to the Stock Purchase Agreements, the Company sold the purchasers 51,125 shares (3,125 shares to Mr. Kerby and 25,000 shares to each of Monaco Investment Partners, LP and Mr. Orange) of Series A Preferred Stock of Verus. The purchase price for the Verus shares was determined by the board of directors of the Company, based on among other things, the recent trading prices of Verus’ common stock on the OTCQB Market, as publicly reported. The Company received net proceeds of $425,000 from the Stock Purchase Agreements.

On January 22, 2020, the Company entered into a Stock Purchase Agreement with William Kerby, the Chief Executive Officer and Director of the Company. Pursuant to the agreement, the Company sold Mr. Kerby 3,125 shares of restricted Series A Preferred Stock of Verus for a total of $25,000 or $8.00 per shares.

As of February 29, 2020, the Company owned 122,495 shares of Verus’s common stock which had a fair value of $8.00 per share or $979,954 in aggregate.

Since the issuance date of such common stock, the Company has sold 61,247,139 shares of common stock of Verus and therefore, as of February 28, 2021, the Company owned 0 shares of common stock of Verus. The change in fair value of $649,020 is recognized in net loss as other expense, realized loss, net. 

Bettwork Industries Inc. (OTC Pink: BETW)

On July 2, 2018, three Secured Convertible Promissory Notes aggregating $5,250,000 (as described in greater detail in the notes to the audited financial statements below under “Item 8. Financial Statements and Supplementary Data—Note 3 – Notes Receivable”), which were entered into with Bettwork Industries Inc. (“Bettwork”), were exchanged for 7,000,000 shares of Bettwork’s common stock at $0.75 per share for a fair value of $5,250,000 as of July 2, 2018. Bettwork’s common stock has a readily determinable fair value as it is quoted on the OTC Pink market under the symbol “BETW”.


On November 29, 2018 and December 6, 2018, the Company sold 428,572 shares of Bettwork common stock to each of (a) the Donald P. Monaco Insurance Trust, of which Donald Monaco is the trustee and the Chairman of the board of directors of the Company; and (b) Charcoal Investment Ltd, which entity is owned by Simon Orange, a member of the board of directors of the Company for an aggregate of $300,000 ($600,000 in total), or $0.70 per share.

On February 29, 2020, the shares of Bettwork’s common stock were trading at $0.25 per share which decreased the fair value of the 6,142,856 remaining shares of Bettwork common stock held by the Company to $1,535,714 and caused an accumulated fair value loss of $6,081,427 to be realized. The change in fair value of $6,081,427 is recognized in net income (loss) on the statement of operations, as other income, valuation loss, net, as a valuation loss as of February 29, 2020.

On February 28, 2021, the shares of Bettwork’s common stock were trading at $0.09 per share which decreased the fair value of the 6,142,856 remaining shares of Bettwork common stock held by the Company to $55,286 and caused an accumulated fair value loss of $1,480,428 to be realized. The change in fair value of $1,480,428 is recognized in net income (loss) on the statement of operations, as other income, valuation loss, net, as a valuation loss as of February 28, 2021.

Recruiter.com Group, Inc., formerly Truli Technologies Inc (OTCQB:RCRT)

On August 31, 2016, we entered into a Marketing and Stock Exchange Agreement with Recruiter.com (“Recruiter”). The Agreement required Monaker to issue to Recruiter 75,000 shares of Monaker common stock in exchange for 2,200 shares of Recruiter common stock. Also, Monaker issued to Recruiter an additional 75,000 shares of Monaker common stock for marketing initiatives within the Recruiter platform. In essence, Monaker issued 75,000 shares of its common stock to purchase 2,200 shares of Recruiter, and Monaker issued an additional 75,000 shares of its common stock as a prepayment for marketing and advertising within the Recruiter platform. Recruiter was at that time a private company with a platform that companies and individuals use for employment placements.

On January 15, 2019, pursuant to an Agreement and Plan of Merger / Merger Consideration, Truli Technologies Inc which subsequently changed its name to Recruiter.com Group, Inc. (OTCQB: RCRT) (“Recruiter.com”), acquired Recruiter and Monaker exchanged its 2,200 shares in Recruiter for 139,273 shares of Recruiter.com common stock.

As of February 29, 2020, each share of Recruiter.com’s common stock was valued at $2.25 per share which decreased the fair value of the 139,273 shares of Recruiter.com common stock to $313,363 and caused an accumulated fair value loss of $160,164 to be realized. The change in fair value of $160,164 is recognized in net income (loss) as other income, valuation loss, net, on the statement of operations, as a valuation loss as of February 29, 2020. 

As of February 28, 2021, each share of Recruiter.com’s common stock was valued at $3.39 per share which decreased the fair value of the 78,137 shares of Recruiter.com common stock to $264,884 and caused an accumulated fair value loss of $48,479 to be realized. The change in fair value of $48,479 is recognized in net income (loss) as other income, valuation loss, net, on the statement of operations, as a valuation loss as of February 28, 2021. 

Longroot Thailand

As discussed in greater detail above under “Recent Material Events—Longroot Stock Purchase Agreement”, on November 16, 2020, the Company acquired 100% of Longroot, which in turn owned 57% of Longroot Cayman. Longroot Cayman owns 49% of the outstanding ordinary shares (with 51% of the Preferred shares owned by two Thai citizen nominee shareholders)  of Longroot Holding (Thailand) Company Limited (“Longroot Thailand”), provided that Longroot Cayman controls 90% of Longroot Thailand’s voting shares and therefore effectively controls Longroot Thailand.


In accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 805, the Company has accounted for this business combination utilizing the following values in connection with the purchase of Longroot, Inc.: total consideration to selling shareholder of $2,528,000 (and $2,250,636, net of cash acquired) and the purchase price has been provisionally allocated as follows. The fair value of net assets acquired were $219,940 and an intangible asset (license) of $2,212,702 with the liabilities assumed of $142,983 and minority interest of $39,023. The business combination accounting is provisionally complete for all assets and liabilities acquired on the acquisition date.

Sources and Availability of Raw Materials and the Names of Principal Suppliers

Our products do not require the consumption of physical raw materials.

Longroot Thailand outsources the development Our products mainly involve cost of the ICO Portal Platform to Atato Company Limited (“Atato”), a company incorporated in Thailand,rendering of services, such as employees, contractors, amortization of intangible assets and has signed an agreement for their services from November 16, 2020 to November 15, 2021.etc.

Dependence on One or a Few Customers

We doIn Fiscal year 2022, we did not depend on one or a few customers. As we expand our business, we do not anticipate that we will depend on one or a few customers.

Government Regulation

Our operations are subject to, and affected by, various government regulations, as well as foreign and U.S. federal, state and local government authorities. TheseOur providers, distributors, etc. are also subject to periodic renewal and ongoing regulatory requirements. The rules, regulations, policies and procedures affecting our businesses are constantly subject to change. The following descriptions are summarysummaries in nature, and do not purport to describe all present and proposed laws and regulations affecting our businesses.

Regulation of the Internet

We operate several internet websites, which we use to distribute information about and supplement our programs. Internet services are now subject to regulation in the United States relating to the privacy and security of personally identifiable user information and acquisition of personal information from children under the age of 13, including the federal Child Online Protection Act (COPA)(“COPA”) and the federal Controlling the Assault of Non-Solicited Pornography and Marketing Act (CAN-SPAM).(“CAN-SPAM”), amongst other privacy related rules and regulations. In addition, a majority of states have enacted laws that impose data security and security breach obligations. Additional federal and state laws and regulations may be adopted with respect to the Internet or other online services, covering such issues as user privacy, child safety, data security, advertising, pricing, content, copyrights and trademarks, access by persons with disabilities, distribution, taxation and characteristics and quality of products and services. In addition, to the extent we offer products and services to online consumers outside the United States, the laws and regulations of foreign jurisdictions, including, without limitation, consumer protection, privacy, advertising, data retention, intellectual property, and content limitations, may impose additional compliance obligations on us.

Thailand is in the process of introducing a Personal Data Protection Act (“PDPA”), which all companies in Thailand that handle personal data will be required to adhere to, once implemented. This means that employers, businesses, and individuals that collect and process personal data would have to review and ensure that their data policies, particularly those pertaining to the rights of the data subjects and the obligations of data controllers, are in line with the PDPA’s provision once it comes to effect.


 

Longroot Thailand’s operations are subject to, and affected by, various government regulations. The rules, regulations, policies and procedures affecting its businesses are constantly subject to change. The following descriptions are summary in nature and do not purport to describe all present and proposed laws and regulations affecting its businesses.

Longroot Thailand is regulated under the Thai SEC Royal Decree on Digital Assets Businesses that requires all ICOs in Thailand to be conducted by a Thai SEC approved ICO Portal. As an ICO Portal, Longroot Thailand is also responsible for carrying out due diligence on issuers. The decree was only recently introduced in 2018, and is subject to amendment. Longroot Thailand will need to constantly monitor the regulations as they evolve and stay compliant.to remain in compliance.

Longroot Thailand is also regulated under the Thailand Anti-Money Laundering Office (AMLO)(“AMLO”), and is required to adhere to the Anti-Money Laundering Act and Counter-Terrorism and Proliferation of Weapon of Mass Destruction Financing Act of Thailand. As such, Longroot Thailand carries out Know Your Customer (KYC)(“KYC”) checks on all issuers, investors and its internal team before on boardingonboarding them to help ensure compliance.


Thailand is in the process of introducing a Personal Data Protection Act (PDPA), which all companies in Thailand that handle personal data would be required to adhere to. This means that employers, businesses, and individuals that collect and process personal data would have to review and ensure that their data policies, particularly those pertaining to the rights of the data subjects and the obligations of data controllers, are in line with the PDPA’s provision once it comes to effect.

There are several business taxes levied by the Thai central government under the principal tax law, Revenue Code, such as Corporate Income Tax, Value Added Tax, Specific Business Tax, Customs Duties, Excise Tax and Stamp Duties. Hotplay Thailand and Longroot Thailand hashave a duty to assess itstheir own income and ensure the right amount of taxes are paid to the government authorities and to correct to avoid additional tax penalty after the government inspection.

Blockchain technologies and digital currencies, are increasingly becoming subject to governmental regulation, both in the US and internationally. Blockchain technologies and cryptocurrency are under review with a number of US and foreign governmental agencies. Other governmental or quasi-governmental regulatory bodies have shown an interest in regulating or investigating companies engaged in digital currency related business. For instance, in early March 2021, the SEC chairperson nominee expressed an intent to focus on investor protection issues raised by cryptocurrencies. Presently, except as otherwise discussed in this Report, we do not believe any regulatory body in a foreign jurisdiction in which we operate, US or State regulatory body has taken any action or position adverse to our blockchain and digital currency related activities; however, future changes to existing regulations or entirely new regulations may affect our business in ways it is not presently possible for us to predict with any reasonable degree of reliability.

NextBank provides traditional banking services and the origination and sale of loans and receivables financing, among other types of lending services, as an International Financial Entity (“IFE”) under license by the Office of the Commissioner of Financial Institutions of Puerto Rico (“OCIF”). Pursuant to its authorization to operate as an IFE, the International Financial Center Regulatory Act of Puerto Rico, as amended (the “IFE Act”), it will be only allowed to perform banking transactions (accepting deposits, making loans, etc.) with any person or entity not considered domestic (in Puerto Rico) (with the exception of the investments in stocks, notes or bonds from the local government) including a range of transactions enumerated in its charter and other transactions for which prior approval is required from the OCIF. The minimum capitalization of the IFE will be $5 million. As provided in the IFE Act, at least $0.25 million must be fully paid-in at the time the license to operate as an international financial entity is issued by the Commissioner. The capital of the IFE must satisfy the adequacy criteria required in a safe and sound financial institution, in the manner provided by federal and state banking statutes and verification of which used by the Federal Deposit Insurance Corporation.

Other Regulations

We are also subject to various local, state, and federal regulations, including, without limitation, regulations promulgated by federal and state environmental, health and labor agencies.

Recent Material Events

Amended Revolving Monaco Trust Note

On December 9, 2019,Appointment and departure of Executive Officers and Directors of the Company entered into an Amended

Effective upon the Closing of the HotPlay Share Exchange, resignations of Mr. Pasquale “Pat” LaVecchia, Mr. Doug Checkeris, Mr. Rupert Duchesne, Mr. Robert “Jamie” Mendola, Jr. and Restated Promissory Note withMs. Alexandra C. Zubko became effective and such persons were deemed to have resigned from the board of directors of the Company. In addition, Mr. Simon Orange, a then member of the board of directors, resigned as a director of the Company effective on June 30, 2021. Mr. William Kerby and Mr. Donald P. Monaco, Insurance Trust,remained as members of which Donald P. Monaco is the trusteeboard of directors following the closing.

In connection with the closing of the HotPlay Share Exchange, and pursuant to the Chairmanterms thereof, the Company’s board of directors approved the increase in the number of directors from eight to nine and upon closing of the HotPlay Share Exchange, each of Mr. J. Todd Bonner, Ms. Nithinan Boonyawattanapisut (the spouse of Mr. Bonner), Mr. Komson Kaewkham, Mr. Athid Nanthawaroon, Mr. Yoshihiro Obata, Ms. Stacey Riddell, and Ms. Carmen L. Diges were appointed to serve as members of the board of directors of the Company, (the “joining William Kerby and Donald Monaco Trust”), inwho remained on the amountboard of up to $2,700,000 (the “Revolving Monaco Trust Note”).directors following the closing.


 

Mr. J. Todd Bonner and Mr. Donald Monaco were appointed as Co-Chairpersons of the board of directors following the closing. Certain of the new members of the board of directors were also appointed as members of the committee of the board of directors, as discussed in further detail elsewhere in this Report.

The amount owedboard of Directors determined that Mr. Komson Kaewkham, Mr. Yoshihiro Obata, Ms. Stacey Riddell, and Ms. Carmen L. Diges, were “independent” pursuant to the Revolving Monaco Trust Note accrues interest atrules of the rateNasdaq Capital Market.

On November 9, 2021, Stacey Riddell resigned as a member of 12% per annum (18% upon the occurrenceCompany’s board of an eventdirectors. Ms. Riddell’s resignation was not the result of default). The Revolving Monaco Trust Note contains standard and customary events of default.

On January 29, 2020,any disagreement with the Company entered into a first amendmenton any matter relating to the Revolving Trust Note with the Monaco Trust, to extend the maturity date of such note from February 1, 2020 to April 1, 2020. No other changes were made to such note as a result of such amendment.Company’s operations, policies or practices.

On March 27, 2020, Company entered into a second amendment to the Revolving Trust Note with the Monaco Trust, to extend the maturity date of such Revolving Monaco Trust Note to December 1, 2020. No other changes were made to such note as a result of such amendment.

On November 6, 2020,23, 2021, the Company’s board of directors appointed Farooq Moosa as an independent director of the Company entered into a third amendment to fill the Revolving Trust Note with the Monaco Trust, to extend the maturity date of such Revolving Monaco Trust Note to February 28, 2021. No other changes were made to such note as a result of such amendment.vacant board seat resulting from Ms. Riddell’s resignation.

On November 16, 2020, the Company entered into a fourth amendment to the Revolving Trust Note with the Monaco Trust, to increase the amount available under such Revolving Monaco Trust Note to $2,800,000. No other changes were made to such note as a result of such amendment.

The Revolving Monaco Trust Note was fully repaid on January 4, 2021, with funds raised through the December 2020 underwritten offering discussed below.

HotPlay and Axion Share Exchanges

As disclosed in greater detail in the Current Report on Form 8-K filed by the Company with the SEC on July 23, 2020, on July 23, 2020, the Company entered into a Share Exchange Agreement (as amended by the first amendment thereto dated October 28, 2020, as disclosed in the Current Report on Form 8-K filed with the SEC on October 29, 2020, the second amendment thereto dated November 12, 2020, as disclosed in the Current Report on Form 8-K filed with the SEC on November 18, 2020, the third amendment thereto dated January 6, 2021, as disclosed in the Current Report on Form 8-K filed with the SEC on January 11, 2021, and the fourth amendment thereto dated February 22, 2021, as disclosed in the Current Report on Form 8-K filed with the SEC on February 26,9, 2021, the HotPlay Exchange Agreement” and the transactions contemplated therein, the “HotPlay Share Exchange”) with HotPlay Enterprise Limited (“HotPlay”) and the stockholdersCompany’s board of HotPlay (the “HotPlay Stockholders”). The transactions contemplated by the HotPlay Exchange Agreement are subject to certain closing conditions, including, the approval of the listing of the combined company’s common stock on the NASDAQ Capital Market following the closing.


Additionally,directors appointed Edward Terrence Gardner, Jr. as disclosed in the Current Report on Form 8-K filed with the SEC on November 18, 2020, on November 12, 2020, the Company entered into an Amended and Restated Share Exchange Agreement (as amended by the first amendment thereto dated January 6, 2021, as disclosed in the Current Report on Form 8-K filed with the SEC on January 11, 2021, the “Axion Exchange Agreement”) with certain stockholders holding shares of Axion Ventures, Inc. (“Axion” and the “Axion Stockholders”) and certain debt holders holding debt of Axion (the “Axion Creditors”)(the “Axion Share Exchange”, and collectively with the HotPlay Exchange Agreement, the “Exchange Agreements” and the transactions contemplated therein, the “Share Exchanges”). The transactions contemplated by the Axion Exchange Agreement closed on November 16, 2020.

Pursuant to the HotPlay Exchange Agreement, the HotPlay Stockholders agreed to exchange 100% of the outstanding capital shares of HotPlay (making HotPlay a wholly-owned subsidiaryindependent director of the Company, following the closingappointment, the board is now composed of 10 members.

Change in Principal Executive Officer (“PEO”)

On January 3, 2022, Nithinan “Jess” Boonyawattanapisut, Co-Chief Executive Officer of the Company, assumed the role of the Company’s PEO, thereby replacing William Kerby, the Company’s other Co-Chief Executive Officer, who stepped down from the PEO role.

Ms. Boonyawattanapisut’s assumption of the Company’s PEO role was based on various considerations, including her familiarity with the Company’s financial statements and operations post-acquisition of HotPlay.

Significant Business and Asset Acquisitions

Reinhart Interactive TV AG and Zappware N.V.

On January 15, 2021, we entered into a Founding Investment and Subscription Agreement with Reinhart Interactive TV AG, a company organized in Switzerland, and Jan C. Reinhart, the founder of Reinhart. The Investment Agreement contemplated the Company acquiring 51% of the ownership of Reinhart, in consideration for 10 million Swiss Francs (approximately $10.8 million US). Consideration was paid by cash and the transaction was closed on June 23, 2021.

More information regarding this transaction is disclosed in Note 4 - Acquisitions and Dispositions.

NextBank International (formerly IFEB)

On April 1, 2021, we entered into a Bill of Sale for Common Stock, effective March 22, 2021, with certain third parties, pursuant to which the Company agreed to purchase 2,191,489 shares, the IFEB Shares, of authorized and outstanding Class A Common Stock of IFEB, a Puerto Rico corporation licensed as an Act 273-2012 international financial entity headquartered in San Juan Puerto Rico, which IFEB Shares totaled approximately 57.16% of the outstanding Class A Common Stock of IFEB. The purchase price of the IFEB Shares was $6.4 million, which amount was paid to the sellers on April 1, 2021.

Separately, on July 21, 2021, the Company entered into, and closed the transactions contemplated therein)by, a Share Exchange Agreement with various other holders of shares of Class A Common Stock of IFEB (the “Additional Sellers” and the “IFEB Exchange Agreement”). Pursuant to the IFEB Exchange Agreement, the Additional Sellers exchanged an aggregate of 1,648,614 of the outstanding Class A Common Stock of IFEB, representing 42.94% of such outstanding Class A Common Stock of IFEB, in consideration for 52 millionan aggregate of 1,926,750 restricted shares of the Company’s common stock (the HotPlay Shares“IFEB Common Shares”)., with each one share of Class A Common Stock of IFEB being exchanged for 1.168 restricted shares of common stock of the Company, based on an agreed upon value of $2.50 per share for each share of Company common stock and $2.92 per share for each share of Class A Common Stock of IFEB.

As a result of the closing of both transactions, we acquired control of 100% of IFEB as of July 21, 2021.

More information regarding this transaction is disclosed in Note 4 - Acquisitions and Dispositions.


 

Go Game Asset Purchase

On June 30, 2021, the Company entered into a Securities Purchase Agreement (the “Go Game SPA”) with David Ng, an individual (the “Seller”). Pursuant to the Axion Exchange Agreement, (a)Go Game SPA, the Axion Stockholders (including Cern One LimitedCompany agreed to acquire a 37% interest in the capital stock of Go Game Pte Ltd, a Singapore private limited company (“Cern One”)Go Game”), exchanged ordinarya mobile game publisher and technology company, representing an aggregate of 686,868 shares of Axion equal to approximately 33.85% ofGo Game’s Class B Preferred shares (the “Initial Go Game Shares”). The Go Game SPA also included an option whereby the then outstanding commonCompany could acquire additional shares of Axion,Go Game, as described in greater detail below. Pursuant to the Go Game SPA, the aggregate consideration to be paid for 10,000,000 shares of newly designatedthe Initial Go Game Shares was: (i) 6,100,000 shares of Series B ConvertibleD Preferred Stock (representing $6.1 million of value, based on an aggregate liquidation preference of $6.1 million), and (ii) $5 million in cash, with $1.25 million paid on June 30, 2021, $1.25 million payable on or before July 31, 2021, and $2.5 million payable on or before September 30, 2021.

Pursuant to the Go Game SPA, the Company was also granted an option (the “Go Game Option”), to purchase up to an additional 259,895 shares of Go Game’s Class B Preferred shares from the Seller (the “Option Shares”) (representing 14% of Go Game’s outstanding Class B Preferred shares, or 51% with the Initial Go Game Shares). The Go Game Option was subject to the Seller’s acquisition of the Company (the “Series B Preferred Stock”), which are automatically convertible into common sharesOption Shares subsequent to the date of the Company upon the occurrence of certain events, including the closing of the HotPlay Share Exchange, into an aggregate of 7,417,700 shares of Monaker common stock; and (b) the Axion Creditors exchanged debt of Axion in the aggregate amount of $7,657,024 (the “Axion Debt”), for (i) 3,828,500 shares of newly designated shares of Series C Convertible Preferred Stock of the Company (the “Series C Preferred Stock”), which are automatically convertible into common shares of the Company upon the occurrence of certain events, including the closing of the HotPlay Share Exchange, on a one-for-one basis; and (ii) a warrant, grantedGo Game SPA. The Go Game Option was to Cern One,be exercisable from time to purchase 1,914,250 shares of the Company’s common stock (the “Creditor Warrants”), which is only exercisable upon the occurrence of certain events (described below). Although the Axion Share Exchange closed on November 16, 2020, the Company has yet to formally complete the transfer of the ownership of the Axion shares into its name, due to a Cease Trade Order issued by the British Columbia Securities Commission, which impacts Axion.

The Creditor Warrants, have cashless exercise rights, an exercise price of $2.00 per share and have a term of two years, beginning on the Vesting Date (defined below). The Creditor Warrants vest on the later of (a)time after the date that the Series B Preferred Stock and Series C Preferred Stock convert into common stock, and the earlier of (i) the date the Axion Debt is fully repaid by Axion or (ii) the date that Monaker obtains 51% or more of the voting control of, and economic rights to, Axion, provided that such vesting date must occur before November 16, 2021, or the Creditor Warrants will terminate (as applicable, the “Vesting Date”). All of the Creditor Warrants were granted to Cern One.

The HotPlay Exchange Agreement can be terminated by the parties thereto under various circumstances, including if the transactions contemplated thereby have not both been completed by April 30, 2021, provided that such termination date is extended automatically, until up to May 31, 2021, in the event that Monaker has, prior to such date, filed a definitive proxy statement with the SEC, has called a special meeting to approve the issuance of the shares to the HotPlay Stockholders, among other things, and is continuing to work in good faith to complete the closing of the HotPlay Share Exchange, which termination date has been extended automatically to May 31, 2021 (the “Outside Date”).


At a special meeting of stockholders held on April 7, 2021, the stockholdersshareholders of the Company approved the issuance of shares of common stock upon conversion of the Series D Preferred Stock and in connection with the HotPlay Share ExchangeGo Game Option (the “Approval Date”), and the terms thereof and the shares of common stockprior to January 1, 2022. The per share consideration due in connection with the conversionan exercise of the Series B Preferred StockGo Game Option was to be equal to $70 million, divided by the then number of outstanding shares of Go Game ($37.71 per share at the time the agreement was entered into) (the “Call Option Price”). The Call Option Price was to be satisfied by the issuance of shares of Company common stock valued based on the greater of (a) $2.35 per share and Series C Preferred Stock, among other matters. The Company is currently working with(b) 85% of the NASDAQ Capital Market to obtain approval foraverage of the continued listingclosing prices of the Company’s common stock followingfor the closingprior thirty days (the “30-Day Average”). The Seller agreed not to transfer the Option Shares from the date acquired through the exercise or expiration of the HotPlay Share Exchange, which approval the Company hopes to receive in or around June 2021 and which HotPlay Share Exchange the Company hopes to close in or around June 2021. The parties are fully committed to closing the HotPlay Share Exchange and the Company expects to extend the Outside Date, or otherwise continue to work together with HotPlay and the HotPlay Stockholders to close the HotPlay Share Exchange, following the dateGo Game Option. Upon issuance of this Report.

Following the closingany shares of common stock upon exercise of the HotPlay Share Exchange,Go Game Option, the current HotPlay Stockholders are expectedSeller agreed to own approximately 60.0%enter into a lock-up agreement restricting any sales or transfers of the outstanding common stockany shares of Monaker, and the Axion Stockholders and Axion Creditors are expected to own, upon the automatic conversion of the outstanding Series B Preferred Stock shares and Series C Preferred Stock shares into common stock of the Company for a period of 18 months following the issuance date.

We agreed, pursuant to the Go Game SPA, that, upon the closingour purchase of the HotPlay Share Exchange, approximately 13.0%Initial Go Game Shares, we would appoint the Seller to the board of directors of the aggregate outstandingCompany, and that we would continue to nominate the Seller as a board nominee for appointment on the board of directors at each subsequent shareholder meeting of the Company, subject to certain exceptions, until the earlier of (i) Seller’s death; (ii) Seller’s resignation from the board of directors; (iii) the date that Seller is no longer qualified to serve as a member of the board of directors; (iv) the date the board of directors, acting in good faith, determines that the continued appointment of Seller to the board of directors would violate the fiduciary duties of such members of the board of directors; (v) the third anniversary of the acquisition of the Initial Go Game Shares; and (vi) the date that the Seller holds less than 2 million shares of Company common stock of Monaker, without taking into account the(including shares of common stock issuable upon exercise of the Creditor Warrants, with the Monaker stockholders prior to the effective date of the closing holding approximately 27.1% of the aggregate outstanding common stock of the combined company, in each case based on the current outstandingconversion shares of common stockSeries D Preferred Stock held by Seller).

As of Monaker.

We previously operated solely inNovember 30, 2021, the travel industry. Withsecond payment of $1.25 million, originally payable on or before July 31, 2021 and the recent acquisitionthird payment of Longroot, as previously discussed, we are now venturing into$2.5 million originally payable on or before September 30, 2021 had not been paid and the cryptocurrency industry. Uponshares of Series D Preferred Stock had not been issued, and such payments remained on hold subject to the completion of due diligence and further negotiation by the HotPlay Exchange Agreement,parties. Total payments made to the Seller as of November 30, 2021 were $1,250,000.

On March 30, 2022, the Company, plansGo Game and the Seller entered into an asset purchase agreement (the “Asset Purchase Agreement”), which amended and restated in its entirety the Go Game SPA, whereby Go Game agreed to transition its operationssell and assign to those of a travel, cryptocurrency, and an in-game advertising company. During the period until the closing of the HotPlay Exchange Agreement, and in the event the HotPlay Exchange Agreement is not consummated, the Company, intends to continue to actively operate in the travel and cryptocurrency industries.

To date, HotPlay has loaned the Company $15 million pursuantagreed to purchase and assume from Go Game, substantially all the assets and certain liabilities related to the terms of the HotPlay Exchange Agreement (collectively, the “HotPlay LoansgoPlay platform (the “Go Game Assets”), pursuant to which HotPlay was required to have at least $15 million in cash on hand as of the closing of such HotPlay Exchange Agreement, less amounts loanedtogether with a perpetual license to the Company. goPay payment gateway (the “goPay License”).

The HotPlay Loans are evidenced by Convertible Promissory Notes (collectively, the “HotPlay Notes”), which have an interest rateconsummation of 1% per annum.

The HotPlay Notes are automatically forgiven by HotPlay in the event the HotPlay Exchange Agreement is terminated in certain situations and automatically convert into fully paid and nonassessable shares of the Company’s common stock at a conversion price of $2.00 per share, subject to the NASDAQ Limitation, described below, in the event the HotPlay Exchange Agreement is terminated in certain other situations.

In the event the transactions contemplated by the HotPlay Share Exchange close, itAsset Purchase Agreement (the “Closing”) occurred on or about April 4, 2022, following the execution of the Asset Purchase Agreement on March 30, 2022.

As consideration for the Go Game Assets and the receipt of the goPay License, the Company agreed to pay $5,000,000 (the “Purchase Price”) as follows:

(i)A cash payment of $1,250,000, which was paid previously by the Company to Go Game/Seller following the execution of the Go Game SPA;
(ii)A cash payment of $1,500,000 at closing by wire transfer of immediately available funds; and
(iii)A cash payment of $2,250,000, which shall be payable monthly by the Company to Go Game with simple interest thereon at the rate of 12.0% per annum until March 31, 2023.

No stock consideration of Go Game or the Company is anticipatedbeing exchanged, as was previously contemplated under the Go Game SPA.


In the event the Company defaults on its monthly cash payment obligations under (iii) above, the Company agrees that the HotPlay NotesSeller shall be given the absolute right to demand for the return by way of assigning, transferring, and delivering to Seller all of the Company’s right, title, ownership and interest in certain games and source code for goPay (without taking away the perpetual licensing right).

For a period of six months following the closing, Go Game will be forgivenprovide transitional assistance to the Company to integrate the goPlay platform and associated game titles, together with the goPay payment gateway, at no additional charge.

The goPay License allows the Company to exploit the goPay payment gateway to enhance the products and service offerings of the Company. The goPay License does not allow the Company to exploit and sublicense the goPay technology as intracompany loans.a stand-alone product.

The maximum numberPrior to the Closing, Go Game was engaged in discussions with potential customers of sharesthe goPlay platform. At the Closing, the Company and Go Game entered into a revenue share agreement (the “Revenue Share Agreement”), pursuant to which Go Game shall refer such potential customers and any other potential customers to the Company, in exchange for a right to receive 50% of common stocknet revenues attributable to be issuedsuch sales.

In addition, the Company and the Seller entered into a restrictive covenant agreement (the “Restrictive Covenant Agreement”) whereby Seller will agree to refrain from competing with the Company and soliciting the Company’s employees at the time of the closing and for a period of time thereafter in order to protect the Company’s legitimate business interests and goodwill in connection with the conversionAsset Purchase Agreement.

Fighter Base Technologies Asset Purchase

On May 2, 2022, the Company completed the acquisition of certain of the HotPlay Convertible Notes, cannot (i) exceed 19.9%assets of Fighter Base Publishing Inc. (“FBP”), an entity owned and controlled by Mark Vange, the Company Chief Technology Officer, pursuant to that Intellectual Property Purchase Agreement entered into by and between the Company and FBP on August 19, 2021. As consideration for the assets of FBP, the Company issued FBP 1,666,667 shares of Company common stock.

The assets purchased from FBP include the AI-powered video development platform of Make It Games (“MIG”), previously a wholly owned division of FBP. The platform includes proprietary technology that enables developers to create video games powered by AI. The technology supports the training of virtual characters to be more lifelike in appearance and behavior. Proprietary AI animation tools help program game or film characters to fully animate themselves, saving as much as 70% of the outstandingtypical time and cost of animation.

Token IQ Asset Purchase

On May 2, 2022, the Company completed the acquisition of 100% of the assets of Token IQ Inc. (“Token IQ”), an entity owned and controlled by Mark Vange, the Company Chief Technology Officer, pursuant to that Intellectual Property Purchase Agreement entered into by and between the Company and Token IQ on August 19, 2021. As consideration for the assets of Token IQ, the Company issued Token IQ 1,250,000 shares of Company common stockstock.

The assets purchased from Token IQ focus on the date of the applicable note, (ii) exceed 19.9% of the combined voting power of the then outstanding voting securities ofdigital assets industry, allowing the Company onto provide its customers with KYC related services, as well as a solution to replace their digital assets should they lose access to, or control of, their digital assets, amongst other things. The foundational intellectual property purchased from Token IQ is designed to reconcile legal and regulatory requirements around digital assets, including KYC, Anti-money laundering and shareholder rights enforcement, all common pain points within the date of the applicable note, in each of subsections (i) and (ii) before the issuance of the common stock under such notes, or (iii) otherwise exceed such number of shares of common stock that would violate applicable listing rules of The NASDAQ Capital Market in the event the Company’s stockholders do not approve the issuance of the common stock (as applicable, the “NASDAQ Limitation”).crypto markets today.

December 2020Financings

May 2021 Underwritten Offering

On December 28, 2020,May 13, 2021, the Company entered into an underwriting agreement (the “May 2021 Underwriting AgreementAgreement”) with Kingswood, Capital Markets, division of Benchmark Investments, Inc. (“Kingswood”) and Aegis Capital Corp. (“Aegis”), as representatives of the underwriters namenamed therein (the Underwriters“Underwriters”), pursuant to which the Company agreed to sell to the Underwriters in a firm commitment underwritten public offering (the Offering”) an aggregate of 3,080,000 shares of the Company’s common stock, at a public offering price of $2.50 per share. The Company also granted the underwriters a 45-day option to purchase up to an additional 462,000 shares of common stock to cover over-allotments, if any, which over-allotment option was fully exercised on January 13, 2021. The Offering closed on December 31, 2020.


Kingswood and Aegis acted as the book-running managers for the Offering. The shares of common stock sold in the Offering were offered and sold by the Company pursuant to an effective shelf registration statement on Form S-3. The Company paid the Underwriters a cash fee equal to 6% of the aggregate gross proceeds received by the Company in connection with the Offering, paid the Underwriters a non-accountable expense allowance equal to 1% of the aggregate gross proceeds received by the Company in connection with the Offering, and reimbursed certain expenses of the Underwriters.

The net proceeds to the Company from the Offering, after deducting the underwriting discounts and commissions and Offering expenses, were approximately $7.1 million. The Company intends to use the net proceeds from the Offering to accelerate Longroot Thailand’s internet coin offering platform and our NextTrip platform and call center, to repay outstanding debt obligations (certain of which have already been paid, as discussed above), to pay outstanding obligations owed pursuant to prior acquisition agreements, for the potential acquisition of additional ownership interests in Axion and/or Longroot Cayman (of which additional interests have been purchased as described above), for general corporate purposes and working capital.

Pursuant to the Underwriting Agreement, the Company agreed, subject to certain exceptions, not to offer, issue or sell any shares of common stock or securities convertible into or exercisable or exchangeable for shares of common stock for a period of thirty days following the Offering without the prior written consent of Kingswood and Aegis.

In connection with the Offering, each of our officers, directors, and certain holders of our outstanding securities agreed, subject to certain exceptions, not to offer, issue, sell, contract to sell, encumber, grant any option for the sale of or otherwise dispose of any shares of our common stock or other securities convertible into or exercisable or exchangeable for shares of our common stock for a period of thirty days after the Offering is completed, without the prior written consent of Kingswood and Aegis.

Letter of Intent to Acquire Axion shares

On October 28, 2020, the Company entered into a non-binding Letter of Intent (as amended by the first amendment thereto dated March 10,“May 2021 the “Letter of Intent”) with Radiant Ventures Limited, which manages Radiant VC1 Limited and Radiant PV 1 Limited, two stockholders of Axion, which entity the Company acquired approximately 33.85% of (provided that such ownership of Axion has not been formally transferred to the Company to date) on November 16, 2020, as discussed above.

Pursuant to the Letter of Intent, the Company agreed, subject to certain condition precedents, including regulatory approvals and the entry into material agreements with the sellers, to acquire approximately 12 million shares of Axion, equal to 5.7% of Axion’s outstanding shares, from the stockholders for approximately $2 million, payable in a combination of stock and cash. In connection with our entry into the Letter of Intent, we paid the sellers a $500,000 non-refundable deposit towards the cash purchase price of the shares in or around October 2020 (representing 25% of such purchase price). We also issued the sellers 235,000 shares of common stock in March 2021, representing an additional 25% of the purchase price. Both payments are non-refundable. A final payment of 50% of the purchase price is due 10 days after the British Columbia Securities Commission (BCSC) lifts a cease trade order on Axion’s shares and is payable at the option of the sellers in cash or shares of the Company’s common stock, based on a 20% discount to the Company’s stock price at the time the election to take such final payment in shares is made, provided that such stock price valuation will not be less than $2.00 per share and not more than $3.00 per share. The Letter of Intent terminates if the final payment has not been made by the earlier of June 30, 2021 and 15 days after the BCSC lifts the Axion no trade order. The purchase is also contingent on the sellers granting the Company a proxy to vote the shares to be purchased of Axion through closing. The purchase remains subject to the negotiation of, and entry into, a definitive purchase agreement with the sellers, as well as other closing conditions, which have not been entered into and/or which have not been completed, to date.


Longroot Stock Purchase Agreement

As discussed above under “Cryptocurrency Portal”, on November 16, 2020, Monaker acquired 100% of Longroot, which in turn owned 57% of Longroot Cayman. Longroot Cayman owns 49% of the outstanding ordinary shares (with 51% of the Preferred shares owned by two Thai citizen nominee shareholders) of Longroot Thailand, provided that Longroot Cayman controls 90% of Longroot Thailand’s voting shares and therefore effectively controls Longroot Thailand.

The acquisition was made pursuant to the November 2, 2020 Stock Purchase Agreement (the “SPA”) entered into between the Company and Dr. Jason Morton (“Morton”), and for certain limited purposes set forth therein, Longroot. Pursuant to the SPA, the Company purchased, 100% of Longroot, in consideration for (a) $1,650,000 in cash; (b) 200,000 shares of restricted common stock valued at $2.14 per share for a total value of $428,000, as well as 150,000 shares of restricted common stock valued at $3.00 per share, for a total value of $450,000. A total of $100,000 was paid as a non-refundable deposit towards the purchase of Longroot on October 15, 2020, and a total of $700,000 was paid at the closing on November 16, 2020, along with the issuance of the 200,000 shares. Additionally, prior to the closing, the Company advanced a separate $400,000 to Longroot which was used for working capital prior to closing which brought the purchase price to a total of $2.1 million of cash (without taking into account the value of the shares). The remaining $900,000 owed to Morton pursuant to the terms of the SPA (the “Remaining Cash Payments”) was payable in three installments of $300,000 each, due on or prior to (i) December 16, 2020 (30 days after the closing), which amount has been paid in full; (ii) March 16, 2021 (120 days after the closing); and (iii) April 15, 2021 (150 days after the closing). Pursuant to the SPA, Morton had the option to elect to receive any or all of the Remaining Cash Payments in shares of common stock of the Company, with such number of shares issuable based on a Company stock price of $3.00 per share.

The Company provided Morton demand registration rights in connection with shares of restricted common stock of the Company held by Morton, provided that Morton is not authorized to request more than one demand registration in any 12-month period. In the event such demand registration right is exercised, the Company has 60 days to file a registration statement to register the shares demanded to be registered and is required to use commercially reasonable best efforts thereafter to gain effectiveness of such registration statement, with all fees being paid for by the Company. The demand registration right has no expiration date.

Effective on December 11, 2020, the Company entered into a letter agreement with Morton, which revised the terms of the SPA. Pursuant to the letter agreement, we agreed to accelerate the payment of an aggregate of $150,000 of the $300,000 which was payable pursuant to the terms of the SPA on or prior to April 15, 2021 (which amount was promptly paid), in consideration for Morton agreeing to withdraw a prior demand he had made for the Company to file a registration statement to register the 200,000 shares of common stock previously issue to Morton pursuant to the terms of the SPA. We also agreed to file a registration statement to register the initial 200,000 shares issued no later than January 31, 2021, which Registration Statement on Form S-3 was timely filed on January 29, 2021 and has been declared effective by the SEC to date.

On January 5, 2021, the Company, through Longroot, subscribed to purchase an additional 100 shares of Longroot Cayman, in consideration for $1 million. The subscription was made pursuant to certain pre-emptive rights set forth in a shareholders’ agreement entered into between the shareholders of Longroot Cayman, and increased Longroot’s ownership of Longroot Cayman up to 75%.

On March 19, 2021, Morton exercised his option to receive the remaining consideration due to him in shares of common stock, and the Company issued Morton 150,000 shares of restricted common stock in full satisfaction of the final amounts due.

A total of 22.9% of Longroot Cayman is owned by Axion Interactive Inc. (BVI), of which Axion, holds a 100% interest. Monaker currently owns approximately 33.85% of Axion’s shares.

Currently Longroot owns an approximate 36.75% indirect interest in Longroot Thailand, due to its ownership of 75% of Longroot Cayman, which in turn owns 49% of Longroot Thailand (75% x 49% = 36.75%)), provided that Longroot Cayman controls 90% of Longroot Thailand’s voting shares and therefore effectively controls Longroot Thailand.


Longroot Thailand is an Initial Coin Offering (ICO) portal operator authorized and regulated under Thai Digital Asset Business Law and licensed by the Thai Securities and Exchange Commission. Longroot Thailand provides fully regulated and licensed digital assets financing, and investment services for digital assets. The Company believes that this innovative new business model opens the door to new financing mechanisms, and new investment products. Monaker, as a majority stakeholder in Longroot Thailand, is planning to use the technology and digital asset capabilities to create cryptocurrencies regulated under Thai law, designed to allow consumers to invest in unique revenue streams in wholesale travel, real estate homes and hotels, gaming assets and digital advertising – as well as potential token and loyalty program opportunities complementary to Monaker’s gaming and travel businesses.

Reinhart Interactive TV AG and Zappware N.V. Acquisition

On January 15, 2021, we entered into a Founding Investment and Subscription Agreement (the “Investment Agreement”) with Reinhart Interactive TV AG, a company organized in Switzerland (“Reinhart”), and Jan C. Reinhart, the founder of Reinhart (“Founder”).

The Investment Agreement contemplated the Company acquiring 51% of the ownership of Reinhart, in consideration for 10,000,000 Swiss Francs (approximately $10.8 million US). The closing of the transactions contemplated by the Investment Agreement was to take place on April 1, 2021, or earlier if the conditions to closing were earlier satisfied. Conditions to closing included the Company paying the required capital contribution, approval of the transaction by the board of directors of the Company and Reinhart, and certain requirements and confirmations required by Swiss law. The Investment Agreement included customary representations and warranties of the parties. We also agreed to reimburse the Founder’s legal fees of up to 30,000 Swiss Francs (approximately $33,670) in connection with the transaction. Additionally, in the event we failed to close the transactions contemplated by the Investment Agreement by April 1, 2021, we agreed to pay the Founder 500,000 Swiss Francs (approximately $560,000), as a break-up fee.

We closed the transactions contemplated by the Investment Agreement on March 31, 2021, by paying the Founder $10.8 million in cash. The consideration paid to the Founder came largely from funds advanced by HotPlay pursuant to HotPlay Notes.

Reinhart is in the business of providing a software-based TV and video distribution platform to telecom operators and digital content owners and providing services to telecom operators and digital content owners for user interaction design, as well as software development, deployment and support.

In connection with our entry into the Investment Agreement, we entered into a Founding Shareholders’ Agreement with the Founder (the “Shareholders’ Agreement”). The Shareholders’ Agreement set forth certain rules for the governance and control of Reinhart. The Shareholders’ Agreement provides that the board of directors of Reinhart will consist of five members, three of which will be appointed by the Founder and other shareholders of Reinhart, and two of which will be appointed by the Company which include William Kerby, the Company’s Chief Executive Officer, and Mark Vange, the Chief Technology Officer of HotPlay; that any material shareholder matters are required to be approved by shareholders holding at least 66 2/3% of the total outstanding vote of Reinhart; that in the event Reinhart issues, within five years after the closing date, any equity or convertible equity, with a price less than the most recent valuation of Reinhart’s shares, the shares held by each director who is appointed by the Founder are subject to weighted average anti-dilution protection; provides for various restrictions on transfers of shares of Reinhart, including right of first refusal rights, tag-along rights, and drag-along rights, as well as certain rights which would trigger the right of the other parties to the Shareholders’ Agreement to acquire the shares held by an applicable shareholder, for the higher of the fair market value and the nominal value of the shares (except in the case of (c) where the purchase price is the lower of such amounts), if such shareholder (a) commits a criminal act against the interests of another party, Reinhart or its affiliates; (b) breaches the Shareholders’ Agreement, and fails to cure such breach 20 days after notice thereof is provided; or (c) the employment of any employed shareholder is terminated for certain reasons.


The Shareholders' Agreement also provides a right for the Founder and any other persons appointed as directors by the Founder to put their shares to the Company, at which time the Company will be required to purchase such shares (the “Founder’s Shares”), based on the following schedule:

Date right is triggered

Percent of Founder’s Shares eligible to be sold 

Required Purchase Price
January 1, 2024  33%15 times EBITDA based on audited 2023 Reinhart financials
January 1, 2025  66%15 times EBITDA based on audited 2024 Reinhart financials
December 20, 2025, if the board of directors of Reinhart, together with a majority of the directors appointed by the Company, agree to sell Reinhart to a third party, but the Company and the Founder can’t agree on such sale, by such date  100%Higher of (a) 15 times EBITDA based on audited 2025 Reinhart financials; and (b) the value of a fully-funded acquisition proposal based on audited 2025 Reinhart financials
January 1, 2026  100%Lower of (a) 15 times EBITDA based on audited 2025 Reinhart financials; and (b) the value of a fully-funded acquisition proposal based on audited 2025 Reinhart financials

The Shareholders’ Agreement also allows the parties to file for an initial public offering on a Swiss trading exchange. The Shareholders’ Agreement has a term of 10 years, extendable thereafter for successive five-year periods, unless terminated by either party with 12 months prior written notice (provided that any such termination shall only be applicable to the terminating shareholder), subject to earlier termination in connection with certain initial public offerings.

Warrant Grants

On or around March 19, 2021 and March 22, 2021, the Company issued warrants to purchase an aggregate of 160,000 shares of common stock to seven warrant holders (all unrelated third parties) in consideration for the immediate exercise of newly granted warrants. The warrants replaced prior warrants which had expired in 2020 (which had exercise prices from between $3.75 and $5.00 per share) and had an exercise price of $2.00 per share and an expiration date on March 31, 2021 (the “New Warrants”). Those warrants were subsequently exercised for cash on or around March 31, 2021, and the Company received cash of $320,000 in connection with such exercises. The 160,000 shares of common stock issuable upon exercise thereof were issued on or around April 1, 2021. The Company has agreed to register the shares of common stock issuable upon exercise of the warrants in the future.

Warrant Exchanges

On or around March 19, 2021 and March 22, 2021, the Company exchanged warrants to purchase an aggregate of 51,900 shares of common stock held by two of the same warrant holders who were granted New Warrants, which had an exercise price of $5.13 per share and an expiration date of July 30, 2022, for new warrants had an exercise price of $2.00 per share and an expiration date on March 31, 2021 (the “Exchanged Warrants”). Those warrants were subsequently exercised for cash on or around March 31, 2021, and the Company received cash of $103,800 in connection with such exercises. The 51,900 shares of common stock issuable upon exercise thereof were issued on or around April 1, 2021. The Company has agreed to register the shares of common stock issuable upon exercise of the warrants in the future.

Streeterville Note Purchases

On March 22, 2021, we entered into a Note Purchase Agreement dated March 23, 2021 (the “March 2021 Note Purchase Agreement”) with Streeterville Capital, LLC (“Streeterville”), an accredited investor, pursuant to which the Company sold Streeterville a Secured Promissory Note in the original principal amount of $9,370,000 (the “March 2021 Streeterville Note”). Streeterville paid consideration of (a) $7,000,000 in cash; and (b) issued the Company a promissory note in the amount of $1,500,000 (the “March 2021 Investor Note”), in consideration for the March 2021 Streeterville Note, which included an original issue discount of $850,000 (the “OID”) and reimbursement of Streeterville’s transaction expenses of $20,000. A total of $700,000 of the OID is fully earned and the remaining $150,000 is not fully earned until the March 2021 Investor Note is fully-funded by Streeterville, which March 2021 Investor Note was fully funded on May 26, 2021.


The March 2021 Streeterville Note bears interest at a rate of 10% per annum and matures 12 months after its issuance date (i.e., on March 23, 2022). From time to time, beginning six months after issuance, Streeterville may redeem a portion of the March 2021 Streeterville Note, not to exceed $2.125 million. In the event we don’t pay the amount of any requested redemption within three trading days, an amount equal to 25% of such redemption amount is added to the outstanding balance of the March 2021 Streeterville Note. Under certain circumstances, the Company may defer the redemption payments up to three times, for 30 days each, provided that upon each such deferral the outstanding balance of the March 2021 Streeterville Note is increased by 2%. Subject to the terms and conditions set forth in the March 2021 Streeterville Note, the Company may prepay all or any portion of the outstanding balance of the March 2021 Streeterville Note at any time subject to a prepayment penalty equal to 10% of the amount of the outstanding balance to be prepaid. For so long as the March 2021 Streeterville Note remains outstanding, the Company has agreed to pay to Streeterville 20% of the gross proceeds that the Company receives from the sale of any of its common stock or preferred stock, which payments will be applied towards and will reduce the outstanding balance of the March 2021 Streeterville Note, which percentage increases to 30% upon the occurrence of, and continuance of, an event of default under the March 2021 Streeterville Note (each an “Equity Payment”). Each time that we fail to pay an Equity Payment, the outstanding balance of the March 2021 Streeterville Note automatically increases by 10%. Additionally, in the event we fail to timely pay any such Equity Payment, Streeterville may seek an injunction which would prevent us from issuing common or preferred stock until or unless we pay such Equity Payment.

The March 2021 Streeterville Note provides that if any of the following events have not occurred on or before June 30, 2021, the then outstanding balance of the note (including accrued and unpaid interest) increases by an amount equal to 25% of the then-current outstanding balance thereof: (a) HotPlay must have become a wholly-owned subsidiary of the Company; (b) during the period beginning on July 21, 2020, and ending on the date that the HotPlay Share Exchange is consummated, HotPlay must have raised at least $15,000,000 in cash or debt through equity investments (which has been completed); (c) upon consummation of the HotPlay Share Exchange, all outstanding debt owed by the Company to HotPlay must have either been forgiven by HotPlay or converted into the Company’s common stock; and (d) HotPlay must have become a co-borrower on the March 2021 Streeterville Note (collectively, the “March 2021 Note Transaction Conditions”).

The March 2021 Note Purchase Agreement required that we complete the purchase of the Reinhart Interactive TV AG equity interests discussed below (the “Reinhart Interest”), within ten days of the date of the sale of the March 2021 Streeterville Note, and that the Company pledge the Reinhart Interest to Streeterville pursuant to a pledge agreement thereafter, both of which were timely completed.  

In addition to the March 2021 Streeterville Note, the Company previously sold Streeterville a Secured Promissory Note in the original principal amount of $5,520,000 on November 23, 2020 (the “November 2020 Streeterville Note”). Streeterville paid consideration of (a) $3,500,000 in cash; and (b) issued the Company a promissory note in the amount of $1,500,000 (the “November 2020 Investor Note”), in consideration for the November 2020 Streeterville Note, which included an original issue discount of $500,000 and reimbursement of Streeterville’s transaction expenses of $20,000. A total of $350,000 of the OID was fully earned and the remaining $150,000 was not fully earned until or unless the November 2020 Investor Note was fully-funded by Streeterville, which November 2020 Investor Note was fully funded on January 6, 2021. The November 2020 Streeterville Note bears interest at a rate of 10% per annum and matures 12 months after its issuance date (i.e., on November 23, 2021). From time to time, beginning six months after issuance, Streeterville may redeem a portion of the November 2020 Streeterville Note, not to exceed an amount of $1.25 million. The November 2020 Streeterville Note and purchase agreement has substantially similar terms as the March 2021 Streeterville Note and purchase agreement, in regard to required redemptions, penalties, required equity payments and events of default. The November 2020 Streeterville Note has a current balance of approximately $2.39 million. We made a required monthly redemption payment of $1,250,000 to Streeterville under the November 2020 Streeterville Note on May 26, 2021, with funds obtained pursuant to the May 2021 Underwritten Offering discussed below. At the same time, Streeterville waived the requirement that we use 20% of the funds obtained pursuant to the May 2021 Underwritten Offering to pay down amounts owed under the November 2020 Streeterville Note, contingent upon our payment of 20% of the proceeds from our May 2021 underwritten offering towards the balance of the March 2021 Streeterville Note, which amount was subsequently paid as discussed below.

The November 2020 Streeterville Note provided that if any of the following events had not occurred on or before April 30, 2021, the then outstanding balance of the note (including accrued and unpaid interest) increases by an amount equal to 25% of the then-current outstanding balance thereof (the “April 2021 Note Increase”): (a) HotPlay must have become a wholly-owned subsidiary of the Company; (b) during the period beginning on July 21, 2020, and ending on the date the HotPlay Share Exchange is consummated, HotPlay must have raised at least $15,000,000 in cash through equity investments; (c) upon consummation of the HotPlay Share Exchange, all outstanding debt owed by the Company to HotPlay must have either been forgiven by HotPlay or converted into the Company’s common stock; (d) HotPlay must have become a co-borrower on the November 2020 Streeterville Note; and (e) the Company must have paid off all outstanding debt obligations to the Donald P. Monaco Insurance Trust and National Bank of Commerce, in full (collectively, the “November 2020 Note Transaction Conditions”). To date, the Company has not yet completed the acquisition of HotPlay, and as such, the November 2020 Note Transaction Conditions have not been met.

On June 1, 2021, Streeterville agreed to defer 50% of the April 2021 Note Increase which was otherwise to occur due to the Company’s failure to timely meet all of the November 2020 Note Transaction Conditions. As such, a total of $506,085 has been capitalized into the outstanding balance of the November 2020 Streeterville Note effective as of April 30, 2021, and the remaining $506,085 of the April 2021 Note Increase will only be added to the balance of the November 2020 Streeterville Note if the Company fails to meet the November 2020 Transaction Conditions by June 30, 2021. Separately, if the Company does not meet the March 2021 Note Transaction Conditions by June 30, 2021, the March 2021 Streeterville Note will be subject to the June 2021 Note Increase.


Also on May 26, 2021, Streeterville funded the March 2021 Investor Note (in the amount of $1.5 million) in full.

We made a required equity payment of $1,857,250 to Streeterville under the March 2021 Streeterville Note on May 26, 2021, with funds raised through the May 2021 underwritten offering, which represented approximately 20% of the funds raised in such offering.

IFEB Bank Transaction

On April 1, 2021, we entered into a Bill of Sale for Common Stock, effective March 22, 2021 (the “Bill of Sale”), with certain third parties pursuant to which the Company agreed to purchase 2,191,489 shares (the “IFEB Shares”) of authorized and outstanding Class A Common Stock of International Financial Enterprise Bank, Inc., a Puerto Rico corporation licensed as an Act 273-2012 international financial entity headquartered in San Juan Puerto Rico (“IFEB”), which IFEB Shares total approximately 57.1% of the outstanding Class A Common Stock of IFEB. The purchase price of the IFEB Shares was $6,400,000, which amount was paid to the sellers on April 1, 2021.

IFEB was incorporated in 2017 as a corporation under the laws of the Commonwealth of Puerto Rico and received its international financial entity license on June 18, 2017 from the Office of the Commissioner of Financial Institutions of Puerto Rico, in Spanish, “Oficina del Comisionado de Instituciones Financieras” or “OCIF”, as license #51. As a result, IFEB is regulated by OCIF, and intends to update its application to establish a Fedwire account with the Federal Reserve Bank, New York (“FRB”). IFEB conducts its business activities out of its head office in Puerto Rico at 268 Ponce de Leon Ave., in San Juan.

Notwithstanding the terms of the Bill of the Sale, and the payment by the Company of the aggregate purchase price pursuant thereto, the transfer of the IFEB Shares to the Company and the Company’s acquisition of control of IFEB is subject to review of the Company’s financial viability, as well as other matters, by OCIF. The Company anticipates completing acquisition of the IFEB Shares in or around June 2021.

On May 6, 2021, in anticipation of the acquisition of the IFEB Shares, and control of IFEB, the Company and IFEB entered into a Preferred Stock Exchange Agreement, which was amended by a First Amendment to Preferred Stock Exchange Agreement entered into May 10, 2021 and effective May 6, 2021 (as amended by the first amendment, the “Preferred Exchange Agreement”), pursuant to which the Company agreed to exchange 1,950,000 shares of the Company’s restricted common stock (the “Monaker Shares”) for 5,850 shares of cumulative, non-compounding, non-voting, non-convertible, perpetual Series A preferred shares of IFEB (the “IFEB Preferred Shares”).

The IFEB Preferred Shares will have a coupon of 2% per annum, payable in quarterly installments in arrears. The IFEB Preferred Shares will be redeemable by the Company; however, IFEB may, by the vote of the holders of a majority of its outstanding common stock, call and redeem the IFEB Preferred Shares in exchange for the Monaker Shares, plus accrued interest on the IFEB Preferred Shares at the time of any such redemption; and upon a Change of Control (defined below), the Company may cause IFEB to repurchase the IFEB Preferred Shares in exchange for the Monaker Shares, plus accrued interest at the time of any such Change of Control. “Change of Control” means the sale of all or substantially all the assets of IFEB; any merger, consolidation or acquisition of IFEB with, by or into another corporation, entity or person; or any change in the ownership of more than fifty percent (50%) of IFEB’s voting securities or the economic rights of such IFEB’s securities.

The closing of the transactions contemplated by the Preferred Exchange Agreement, including the issuance of the Monaker Shares and IFEB Preferred Shares, are subject to various closing conditions, including, but not limited to IFEB receiving approval from OCIF to issue preferred stock (including the Series A preferred shares), and the filing of a formal designation of the Series A preferred stock by IFEB with the Secretary of State of Puerto Rico. As such, the transactions contemplated by the Preferred Exchange Agreement may not close on a timely basis, if at all. If not closed by June 30, 2021, the Preferred Exchange Agreement can be terminated by either party with written notice to the other.


Convertible Promissory Notes

On April 8, 2021, the Company entered into an Exchange Agreement with William Kerby, its Chief Executive Officer and director and Monaco Investment Partners II, LP (“MI Partners”), of which Donald P. Monaco is the managing general partner and the Chairman of the board of directors of the Company (the “Exchange Agreement”). Pursuant to the Exchange Agreement, the terms of which were approved by the board of directors of the Company, Mr. Kerby and MI Partners exchanged their right to an aggregate of $1,016,314 in accrued dividends (the “Accrued Dividends”) which had accrued on the Company’s outstanding Series A Preferred Stock, which had been held by Mr. Kerby and MI Partners prior to the conversion of such Series A Preferred Stock into common stock of the Company in August 2017, for Convertible Promissory Notes. Specifically, Mr. Kerby exchanged rights to $430,889 of accrued dividends on the Series A Preferred Stock for a Convertible Promissory Note with a principal balance of $430,889 and MI Partners exchanged rights to $585,425 of accrued dividends on the Series A Preferred Stock for a Convertible Promissory Note with a principal balance of $585,425 (the “Convertible Promissory Notes”).

The Convertible Promissory Notes accrue interest at the rate of 12% per annum, compounded monthly at the end of each calendar month, with such interest payable at maturity or upon conversion. The principal and accrued interest owed under the Convertible Promissory Notes is convertible, at the option of the holders thereof, into shares of the Company’s common stock, at any time beginning seven days after the date the HotPlay Exchange Agreement closes and prior to the payment in full of such Convertible Promissory Notes by the Company, at a conversion price equal to the greater of (i) the closing consolidated bid price of the Company’s common stock on April 8, 2021 (which was $3.02); and (ii) the five-day volume weighted average price of the Company’s common stock for the five trading days following the date that the HotPlay Exchange Agreement closes. The Convertible Promissory Notes are unsecured, have a maturity date of April 7, 2022, and include standard and customary events of default. 

May 2021 Underwritten Offering

On May 13, 2021, the Company entered into an underwriting agreement (the “May 2021 Underwriting Agreement”) with Kingswood, as representatives of the underwriters named therein (the “Underwriters”), pursuant to which the Company agreed to sell to the Underwriters in a firm commitment underwritten public offering (the “May 2021 OfferingOffering”) an aggregate of 3,230,000 shares of the Company’s common stock at a public offering price of $2.50 per share. The Company also granted the underwriters a 45-day option to purchase up to an additional 484,500 shares of common stock to cover over-allotments, if any, which over-allotment option was exercised in full. The May 2021 Offering (including the sale of the over-allotment shares) closed on May 18, 2021. The net proceeds to the Company from the May 2021 Offering, after deducting the underwriting discounts and commissions and offering expenses, were approximately $8.5 million.

Kingswood acted as sole book-running managers for the May 2021 Offering. The Company paid the Underwriters a cash fee equal to 6% of the aggregate gross proceeds received by the Company in connection with the May 2021 Offering, paid the Underwriters a non-accountable expense allowance equal to 1% of the aggregate gross proceeds received by the Company in connection with the May 2021 Offering, and reimbursed certain expenses of the Underwriters.


 

November Registered Direct Offering

On November 1, 2021, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain institutional investors (the “Purchasers”), pursuant to which the Company agreed to issue and sell, in a registered direct offering, an aggregate of 18,987,342 shares (the “Shares”) of the Company’s common stock, together with warrants to purchase an aggregate of 14,240,508 shares of Common Stock (the “Warrants”), at a combined price of $1.58 per Share and accompanying three quarters of a Warrant. The net proceeds to the Company from the May 2021 Offering,offering, after deducting the underwriting discountsplacement agent fees and commissionsexpenses and estimated offering expenses (excluding proceeds to the Company, if any, from the future exercise of the Warrants) were approximately $8.5$27.85 million.

The offering closed on November 3, 2021. The Shares, Warrants and shares of common stock issuable upon exercise of the Warrants were offered pursuant to a prospectus supplement, filed with the SEC on November 3, 2021, to the Company’s effective shelf registration statement on Form S-3 (File No. 333-257457), which was initially filed with the SEC on June 25, 2021, was amended on September 24, 2021 and October 27, 2021, and was declared effective on October 29, 2021.

Each whole Warrant sold in the offering will be exercisable for one share of common stock at an initial exercise price of $1.97 per share (the “Initial Exercise Price”), the closing sales price of the Company’s common stock on October 29, 2021 (the last trading day prior to the date that the Purchase Agreement was entered into). The Warrants may be exercised commencing six months after the issuance date (the “Initial Exercise Date”) and terminating on the fifth anniversary of the Initial Exercise Date. The Warrants are exercisable for cash; provided, however that they may be exercised on a cashless exercise basis if, at the time of exercise, there is no effective registration statement registering, or no current prospectus available for, the issuance or resale of the shares of common stock issuable upon exercise of the Warrants. The exercise of the Warrants will be subject to a beneficial ownership limitation, which will prohibit the exercise thereof, if upon such exercise the holder of the Warrants, its affiliates and any other persons or entities acting as a group together with the holder or any of the holder’s affiliates would hold 4.99% (or, upon election of a purchaser prior to the issuance of any shares, 9.99%) of the number of shares of the common stock outstanding immediately after giving effect to the issuance of shares of common stock issuable upon exercise of the Warrant held by the applicable holder, provided that the holders may increase or decrease the beneficial ownership limitation (up to a maximum of 9.99%) upon 61 days advance notice to the Company, which 61 day period cannot be waived.

The Warrants also include certain anti-dilution rights, which provide that if at any time the Warrants are outstanding, the Company issues or enters into any agreement to issue, or is deemed to have issued or entered into an agreement to issue (which includes the issuance of securities convertible or exercisable for shares of common stock), securities for consideration less than the then current exercise price of the Warrants, the exercise price of such Warrants will be automatically reduced to the lowest price per share of consideration provided or deemed to have been provided for such securities; provided, however, that unless and until the Company has received stockholder approval to reduce the exercise price of the Warrants below $1.97 per share (the “Floor Price”), no such adjustment to the exercise price may be made. Pursuant to the Purchase Agreement, the Company agreed to use its reasonable best efforts to obtain stockholder approval within 90 days from the date of the prospectus supplement to remove the Floor Price of the Warrants. Until such shareholder approval is obtained, the Company has agreed to hold a special meeting of its stockholders every three months thereafter, for so long as the Warrants remain outstanding, to obtain such stockholder approval.

If the Company fails for any reason to deliver shares of common stock upon the valid exercise of the Warrants, subject to its receipt of a valid exercise notice and the aggregate exercise price, by the time period set forth in the Warrants, the Company will be required to pay the applicable holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of shares subject to such exercise (as calculated in the Warrant), $10 per trading day (increasing to $20 per trading day on the third trading day after such liquidated damages begin to accrue) for each trading day that such shares are not delivered. The Warrants also include customary buy-in rights in the event the Company fails to deliver shares of common stock upon exercise thereof within the time periods set forth in the Warrant.

EF Hutton, division of Benchmark Investments, LLC (“EFH”), agreed to act as placement agent for the offering on a “reasonable best efforts” basis. Pursuant to the placement agency agreement entered into with EFG, the Company paid EFH an aggregate cash fee equal to 6.0% of the aggregate gross proceeds of the offering, a non-accountable expense reimbursement of 1.0% of the aggregate gross proceeds in the offering, and $50,000 for the reimbursement of certain of the EFH’s expenses.


At The Market Offering Agreement Facility

On March 4, 2022, the Company entered into an At The Market Offering Agreement (the “ATM Agreement”) with H.C. Wainwright & Co., LLC (the “Agent”), to create an at-the-market equity program under which the Company may, from time to time, offer and sell shares of its common stock having an aggregate gross offering price of up to $20 million (the “Shares”) to or through the Agent (the “ATM Offering”).

Any Shares sold to or through the Agent will be issued pursuant to a prospectus dated October 29, 2021 and a prospectus supplement dated March 4, 2022 filed with the SEC (the “Prospectus Supplement”), in connection with one or more offerings of the Shares pursuant to the Prospectus Supplement. Subject to the terms and conditions of the ATM Agreement, the Agent will use its commercially reasonable efforts consistent with its normal trading and sales practices and applicable state and federal law, rules and regulations to sell the Shares from time to time, based upon the Company’s instructions. Sales of the Shares, if any, under the ATM Agreement may be made in transactions that are deemed to be “at the market offerings” as defined in Rule 415 under the Securities Act of 1933, as amended (the “Securities Act”), including sales made by means of ordinary brokers’ transactions (including directly on the Nasdaq Capital Market), at market prices or as otherwise agreed between the Company and the Agent. The Agent is not under any obligation to purchase any of the Shares on a principal basis pursuant to the ATM Agreement, except as otherwise agreed by the Agent and the Company in writing pursuant to a separate terms agreement. The Company intendshas no obligation to usesell any of the Shares and may at any time suspend offers under the ATM Agreement or terminate the ATM Agreement. As compensation for services provided, if any, the Agent will be entitled to a commission at a fixed commission rate equal to 3.0% of the gross sales price of any Shares sold in the ATM Offering.

Note Purchase Agreements: Streeterville Capital, LLC

November 2020 Note Purchase Agreement

On November 23, 2020, the Company entered into a Note Purchase Agreement (the “November 2020 Note Purchase Agreement”) with Streeterville Capital, LLC (“Streeterville”), pursuant to which the Company sold Streeterville a Secured Promissory Note in the original principal amount of $5,520,000 (the “November 2020 Streeterville Note”). Streeterville paid consideration of an initial cash purchase price of $3,500,000 for the note and issued the Company a promissory note in the amount of $1,500,000 (the “November 2020 Investor Note”). The associated debt issuance costs of the note were $370,000 for total amount due $3,870,000. In addition to the $370,000 of debt issuance costs, the Company paid $245,000 for advisory fees, resulting in net proceeds fromto the May 2021 OfferingCompany of $3,255,000.

The November 2020 Investor Note, in the principal amount of $1,500,000, evidenced the amount payable by Streeterville to repay approximately $4.2 million owed to Streeterville, provide capital to IFEB in advancethe Company as partial consideration for the acquisition by the Company of the closingNovember 2020 Streeterville Note. The November 2020 Investor Note accrued interest at the rate of 10% per annum, payable in full on November 23, 2021, subject to a 30-day extension exercisable at the option of Streeterville and could be prepaid at any time. The amount of the Investor Note has been offset against the amount of the November 2020 Streeterville Note in the balance sheet as of February 28, 2021, as both notes have substantially similar terms, and the Investor Note was provided in consideration for the acquisition of control of IFEB (which acquisition is pending, subject to closing conditions, and may not be completely timely, if at all), for general corporate purposes and working capital or for other purposes that the board of directors, in their good faith, deems to be in the best interest of the Company. We may also use all or a portion of the November 2020 Streeterville Note. The November 2020 Investor Note was subsequently funded in full in January 2021.

On November 4, 2021, upon completion of the November 2021 registered direct offering (discussed above), the Company completely paid off the November 2020 Streeterville Note in the amount of $3,100,807.


March 2021 Note Purchase Agreement

On March 22, 2021, the Company entered into a Note Purchase Agreement dated March 23, 2021 (the “March 2021 Note Purchase Agreement”) with Streeterville, pursuant to which the Company sold Streeterville a Secured Promissory Note in the original principal amount of $9,370,000 (the “March 2021 Streeterville Note”). Streeterville paid consideration of (a) $7,000,000 in cash; and (b) issued the Company a promissory note in the amount of $1,500,000 (the “March 2021 Investor Note”), in consideration for the March 2021 Streeterville Note, which included an original issue discount of $850,000 (the “OID”) and reimbursement of Streeterville’s transaction expenses of $20,000. A total of $700,000 of the OID was fully earned upon issuance and the remaining net$150,000 was not fully earned until the March 2021 Investor Note was fully-funded by Streeterville, which occurred on May 26, 2021. Also on May 26, 2021, Streeterville funded the March 2021 Investor Note (in the amount of $1.5 million) in full.

The March 2021 Streeterville Note bore interest at a rate of 10% per annum and matures 12 months after its issuance date (i.e., on March 23, 2022). From time to time, beginning six months after issuance, Streeterville had the right to redeem a portion of the March 2021 Streeterville Note, not to exceed $2.125 million. In the event we did not pay the amount of any requested redemption within three trading days, an amount equal to 25% of such redemption amount was to be added to the outstanding balance of the March 2021 Streeterville Note. Under certain circumstances, the Company had the right to defer the redemption payments up to three times, for 30 days each, provided that upon each such deferral the outstanding balance of the March 2021 Streeterville Note would increase by 2%. Subject to the terms and conditions set forth in the March 2021 Streeterville Note, the Company could prepay all or any portion of the outstanding balance of the March 2021 Streeterville Note at any time subject to a prepayment penalty equal to 10% of the amount of the outstanding balance to be prepaid. For so long as the March 2021 Streeterville Note remained outstanding, the Company agreed to pay to Streeterville 20% of the gross proceeds that the Company received from the sale of any of its common stock or preferred stock, which payments were applied towards and reduced the outstanding balance of the March 2021 Streeterville Note, which percentage would increase to 30% upon the occurrence of, and continuance of, an event of default under the March 2021 Streeterville Note (each an “Equity Payment”). The outstanding balance of the March 2021 Streeterville Note would have automatically increased by 10% each time that we failed to pay an Equity Payment. Additionally, in the event we failed to timely pay any such Equity Payment, Streeterville had the right to seek an injunction which would prevent us from issuing common or preferred stock until or unless we pay such Equity Payment.

The March 2021 Note Purchase Agreement required that we complete the purchase of the Reinhart Interactive TV AG equity interests discussed below (the “Reinhart Interest”), within ten days of the date of the sale of the March 2021 Streeterville Note, and that the Company pledge the Reinhart Interest to Streeterville pursuant to a pledge agreement thereafter, both of which were timely completed. 

The Company made a required equity payment of $1,857,250 to Streeterville under the March 2021 Streeterville Note on May 26, 2021, with funds raised through a May 2021 underwritten offering, which represented approximately 20% of the funds raised in such offering. On November 4, 2021, the Company paid down the outstanding balance of the March 2021 Streeterville Note, with funds raised through the November 2021 registered direct offering (discussed above).

October 2021 Note Purchase Agreement

On October 22, 2021, the Company entered into the Note Purchase Agreement (the “October 2021 Note Purchase Agreement”) with Streeterville, pursuant to which the Company sold Streeterville a Secured Promissory Note in the original principal amount of $1,665,000 (the “October 2021 Streeterville Note”). Streeterville paid consideration of $1,500,000, which represents the original principal amount less a $150,000 OID, which was fully earned upon issuance, and a total of $15,000 to cover Streeterville’s professional fees and transaction expenses.

The October 2021 Streeterville Note bears interest at a rate of 10% per annum and matures 12 months after its issuance date (i.e., on October 22, 2022). From time to time, beginning six months after issuance, Streeterville may redeem any portion of the October 2021 Streeterville Note, up to a maximum amount of $375,000 per month. In the event the Company fails to pay the amount of any requested redemption within three trading days, an amount equal to 25% of such redemption amount is added to the outstanding balance of the October 2021 Streeterville Note. Under certain circumstances, the Company may defer the redemption payments up to three times, for 30 days each, provided that upon each such deferral, the outstanding balance of the October 2021 Streeterville Note is increased by 2%. Subject to the terms and conditions set forth in the October 2021 Streeterville Note, the Company may prepay all or any portion of the outstanding balance of the October 2021 Streeterville Note at any time subject to a prepayment penalty equal to 10% of the amount of the outstanding balance to be prepaid. For so long as the October 2021 Streeterville Note remains outstanding, the Company has agreed to pay to Streeterville 20% of the gross proceeds that the Company receives from the sale of any of its common stock or preferred stock within ten days of receiving such amount, which payments will be applied towards and will reduce the outstanding balance of the October 2021 Streeterville Note, which percentage increases to 30% upon the occurrence of, and continuance of, an event of default under the October 2021 Streeterville Note (each an “Equity Payment”). Each time that the Company fails to pay an Equity Payment, the outstanding balance of the October 2021 Streeterville Note automatically increases by 10%. Additionally, in the event the Company fails to timely pay any such Equity Payment, Streeterville may seek an injunction which would prevent the Company from issuing common or preferred stock until or unless the Company paid all past-due Equity Payments.


Pursuant to the October 2021 Streeterville Note, the Company provided Streeterville a right of first refusal to purchase any promissory note, debenture, or other debt instruments which the Company proposes to sell, other than sales to officers or directors of the Company and/or sales to the government. Each time, if ever, that the Company provides Streeterville such right, and Streeterville does not exercise such right to provide such funding, the outstanding balance of the October 2021 Streeterville Note increases by 3%, unless the proceeds from such sale(s) are used to repay the October 2021 Streeterville Note in full. Each time, if ever, that the Company fails to comply with the terms of the right of first refusal, the outstanding balance of the October 2021 Streeterville Note increases by 10%. Additionally, upon each major default described in the October 2021 Streeterville Note (i.e., the failure to pay amounts under the October 2021 Streeterville Note when due or to observe any covenant under the Note Purchase Agreement (other than the requirement to make Equity Payments)), the outstanding balance of the October 2021 Streeterville Note may be increased, at Streeterville’s option, by 15%, and for each other default, the outstanding balance of the October 2021 Streeterville Note may be increased, at Streeterville’s option, by 5%, provided such increase can only occur three times each as to major defaults and minor defaults, and that such aggregate increase cannot exceed 30% of the balance of the October 2021 Streeterville Note immediately prior to the first event of default.

The October 2021 Note Purchase Agreement and the October 2021 Streeterville Note contain customary events of default, including if the Company undertakes a fundamental transaction (including consolidations, mergers, and certain changes in control of the Company), without Streeterville’s prior written consent. As described in the October 2021 Streeterville Note, upon the occurrence of certain events of default (mainly our entry into bankruptcy), the outstanding balance of the October 2021 Streeterville Note will become automatically due and payable. Upon the occurrence of other events of default, Streeterville may declare the outstanding balance of the October 2021 Streeterville Note immediately due and payable at such time or at any time thereafter. After the occurrence of an event of default (and upon written notice from Streeterville), interest on the October 2021 Streeterville Note will accrue at a rate of 22% per annum, or if lesser, the maximum rate permitted under applicable law. The October 2021 Note Purchase Agreement prohibits Streeterville from shorting our stock through the period that Streeterville holds the October 2021 Streeterville Note.

As of February 28, 2022, the remaining principal balance of Streeterville Notes was $4,053,737, plus accrued interest of $653,587.

On May 5, 2022, the Company and Streeterville entered into a Standstill Agreement, pursuant to which Streeterville agreed that it will not seek to redeem any portion of the October 2021 Streeterville Note before September 18, 2022. As consideration for such agreement, the outstanding balance of the October 2021 Streeterville Note was increased by approximately $87,639, resulting in an updated outstanding balance of approximately $1,840,913 as of such date. Pursuant to Standstill Agreement, in the event of a default by the Company under the October 2021 Streeterville Note, the Standstill Agreement shall terminate immediately. Except as provided herein, the Standstill Agreement does not impact or alter the terms of the October 2021 Streeterville Note or the October 2021 Purchase Agreement, both of which remain in full force and effect.

More information regarding this offering (aftertransaction is disclosed in Note 9 – Notes Payable.

May 2022 Streeterville Note Purchase

On May 5, 2022 (the “Effective Date”), the payments described above)Company entered into a new Note Purchase Agreement (the “May 2022 Note Purchase Agreement”) with Streeterville, pursuant to fund possible investmentswhich the Company sold Streeterville a Secured Promissory Note in or acquisitionsthe original principal amount of complementary businesses, technologies or products; however, we currently have no definitive agreements or commitments$2,765,000 (the “May 2022 Streeterville Note”). Streeterville paid consideration of $2,500,000, which amount represents the original principal amount less a $250,000 OID, which was fully earned upon issuance, and a total of $15,000 to cover Streeterville’s professional fees and transaction expenses incurred in connection with respect to any investment or acquisition.the transaction.


 

The May 2022 Streeterville Note bears interest at a rate of 10% per annum and matures 12 months after its issuance date (i.e., on May 5, 2023). From time to time, beginning six months after issuance, Streeterville may redeem any portion of the May 2022 Note, up to a maximum amount of $625,000 per month. In the event the Company fails to pay the amount of any requested redemption within three trading days, an amount equal to 25% of such redemption amount is added to the outstanding balance of the May 2022 Note. Under certain circumstances, the Company may defer the redemption payments up to three times, for 30 days each, provided that upon each such deferral, the outstanding balance of the May 2022 Note is increased by 2%.

Subject to the terms and conditions set forth in the May 2022 Note, the Company may prepay all or any portion of the outstanding balance of the May 2022 Note at any time subject to a prepayment penalty equal to (i) 5% of the amount of the outstanding balance to be prepaid if such prepayment is made on or before six months from the Effective Date and (ii) 10% of the amount of the outstanding balance to be prepaid if such prepayment is made after six months from the Effective Date. For so long as the May 2022 Note remains outstanding, the Company has agreed to pay to Streeterville 20% of the gross proceeds that the Company receives from the sale of any of its common stock or preferred stock within ten days of receiving such amount, which payments will be applied towards and will reduce the outstanding balance of the May 2022 Note, which percentage increases to 30% upon the occurrence of, and continuance of, an event of default under the May 2022 Note (each an “Equity Payment”). Each time that the Company fails to pay an Equity Payment, the outstanding balance of the May 2022 Note automatically increases by 10%. Additionally, in the event the Company fails to timely pay any such Equity Payment, Streeterville may seek an injunction which would prevent the Company from issuing common or preferred stock until or unless the Company paid all past-due Equity Payments.

Additionally, upon each major default described in the May 2022 Note (including, without limitation, the failure to pay amounts under the May 2022 Note when due or to observe any covenant under the May 2022 Purchase Agreement (other than the requirement to make Equity Payments)), the outstanding balance of the May 2022 Note may be increased, at Streeterville’s option, by 15%, and for each other default, the outstanding balance of the May 2022 Note may be increased, at Streeterville’s option, by 5%, provided such increase can only occur three times each as to major defaults and minor defaults, and that such aggregate increase cannot exceed 30% of the balance of the May 2022 Note immediately prior to the first event of default.

The May 2022 Purchase Agreement and the May 2022 Note contain customary events of default, including if the Company undertakes a fundamental transaction (including consolidations, mergers, and certain changes in control of the Company), without Streeterville’s prior written consent. Pursuant to the May 2021 Underwriting Agreement,2022 Note, upon the Company agreed, subject tooccurrence of certain exceptions, not to offer, issue or sell any sharesevents of common stock or securities convertibledefault (mainly our entry into or exercisable or exchangeable for sharesbankruptcy), the outstanding balance of common stock for a period of 45 days following the May 2021 Offering, without2022 Note will become automatically due and payable. Upon the prioroccurrence of other events of default, Streeterville may declare the outstanding balance of the May 2022 Note immediately due and payable at such time or at any time thereafter. After the occurrence of an event of default (and upon written consentnotice from Streeterville), interest on the May 2022 Note will accrue at a rate of Kingswood.

22% per annum, or if lesser, the maximum rate permitted under applicable law. The May 2022 Purchase Agreement prohibits Streeterville from shorting our stock through the period that Streeterville holds the May 2022 Note.


The May 2022 Purchase Agreement also provides for cross-indemnification by the parties in the event that they incur loss or damage related to, among other things, a breach of applicable representations, warranties, or covenants under the May 2022 Purchase Agreement.

In connection with the May 2021 Offering, each of our officers2022 Purchase Agreement and directors agreed, subject to certain exceptions, not to offer, issue, sell, contract to sell, encumber, grant any option for the sale of or otherwise dispose of any shares of our common stock or other securities convertible into or exercisable or exchangeable for shares of our common stock for a period of 45 days after the May 2021 Offering is completed, without2022 Note, the prior written consentCompany entered into a Security Agreement with Streeterville, pursuant to which the obligations of Kingswood.the Company are secured by substantially all of the assets of the Company.

IDS Settlement

On August 15, 2019, the Company entered into an Intellectual Property Purchase Agreement (“and the “IP Purchase Agreement”) with IDS Inc. (“IDS” and the “IP Purchase AgreementIDS”). Pursuant to the agreement,IP Purchase Agreement, the Company purchased certain proprietary technology from IDS for the reservation and booking of air travel, hotel accommodations, car rentals, and ancillary products, services, and amenities, integration of the same with the providers of such products and services, associated functions, including website addresses, patents, trademarks, copyrights and trade secrets relating thereto, and all goodwill associated therewith (collectively, the IP Assets“IP Assets”). In consideration for the purchase, the Company issued IDS 1,968,000 shares of restricted common stock (the IDS Shares“IDS Shares”) valued at $2.50 per share, or $4,920,000$4.9 million in aggregate.


 

On April 27, 2020, the Company filed a verified complaint for injunctive relief against IDS and TD Assets Holding, LLC (“TD AssetAsset”), Navarro McKown, Aaron McKown and Ari Daniels (“DanielsDaniels”), which parties are affiliated with IDS, in the Circuit Court of the Seventeenth Judicial Circuit in and for Broward County, Florida (Case No. CACE-20-007088). Pursuant to the complaint, the Company alleged causes of action against the defendants, including IDS, based on among other things, fraud, conspiracy to commit fraud, aiding and abetting fraud, rescission, and breach of contract, and sought a temporary and permanent injunction against the defendants, requiring such persons to return the 1,968,000 IDS Shares issued pursuant to the terms of the IP Purchase Agreement and preventing such persons from selling or transferring any IDS Shares, sought damages from the defendants, rescission of the IP Purchase Agreement, attorneys fees and other amounts. The defendants subsequently filed various counterclaims against the Company.

The complaint was filed because of IDS’sIDS’ failure to deliver the IP Assets, certain other actions of IDS and the other of the defendants which the Company alleged constituted fraud. The Company sought to unwind the IP Purchase Agreement and sought damages for the Company due to IDS’sIDS’ and the other defendants’ breaches thereunder. IDS, through its counsel, sent a letter threatening to bring a shareholders’ derivative action and/or direct suit against the Company. In response to such letter, the Company’s board of directors empowered the governance committee to conduct an internal investigation into the claims. The results of the investigation, conducted by several law firms, were presented to the BoardCompany’s board and the Boardboard concluded that no fraudulent activities occurred. The investigation concluded in October 2020.

On April 29, 2020, the Company filed a Verified Motion for Temporary Injunction (the Injunction Motion“Injunction Motion”). Defendants IDS, TD Assets, and Ari Daniels filed an answer, affirmative defenses, and counterclaims (the Answer“Answer and CounterclaimCounterclaim”). The Answer and Counterclaim included alleged breach of contract and tort claims against the Company. On September 17, 2020, the Company moved to strike the affirmative defenses and dismiss the counterclaims. On October 15, 2020, defendants IDS, TD Assets, and Ari Daniels filed an amended Answer and Counterclaim, including alleged breach of contract, tort, and federal securities claims against the Company, Mr. William Kerby, our Chief Executive Officer and an employee of the Company.

On July 27, 2020, the Company entered into a confidential settlement agreement with certain of the defendants in the IDS matter, Navarro Hernandez, P.L., Aaron M. McKown, and Jeffery S. Bailey. The settlement provided for mutual releases of the parties and amounts payable from such parties to the Company in four tranches, in consideration for such settlement, of which all such payments have been timely paid pursuant to the terms of the settlement.

The remaining parties to the litigation subsequently attempted to mediate their pursuant to a court ordered mediation in February 2021.

Effective on May 18, 2021, the Company, IDS, TD Asset and Ari Daniels, the principal of IDS, entered into an Amendment to Intellectual Property Purchase Agreement (the IP“IP Purchase AmendmentAmendment”). Pursuant to the IP Purchase Agreement,Amendment, the parties amended the IP Purchase Agreement, with the Company agreeing to make a payment to IDS in the amount of $2,850,000$2.85 million (the Payment“Payment”), payable by way of an initial payment of $500,000,$0.5 million, and twelve monthly payments of approximately $195,833$0.2 million (collectively, the Required Payments“Required Payments”), with such monthly payments beginning 30 days after the initial payment, which is due seven days after the date of the IP Purchase Amendment, and has been paid to date.Amendment. Such monthly payments may be pre-paid at any time without penalty. At the Company’s option, any portion of the amount due may be paid to IDS by a party separate from the Company (either a related party of Monakerthe Company or a third-party) (a Paying Party“Paying Party”), for the benefit of Monaker,the Company, which shall be treated for all purposes as a payment by Monaker.the Company. As consideration for such Paying Party making such payment on behalf of Monaker,the Company, IDS agreed to transfer the Paying Party a number of the IDS Shares equal to the amount of the cash payment(s) made by a Paying Party multiplied by 0.6888 as to the first $500,000$0.5 million payment, (which payment has been made, but which shares have not been transferred to the Company to date), and 0.691 as to the monthly payments (as applicable, the Applicable Portion“Applicable Portion” of the IDS Shares).


In the event the Company fails to make any payment timely, and the Company does not cure such default within seven days of written notice of default being provided by IDS, IDS is entitled to entry of a default judgment against the Company in the amount of the differential, if any, between the realized value of the IDS Shares upon the future sale thereof in the open market by IDS, and the unpaid amount of any payment due. In the event of any such default, IDS will be entitled to attorneys’ fees incurred to obtain said judgment.

Upon each payment of amounts due to IDS pursuant to the terms of the IP Agreement Amendment, as discussed above, by Monakerthe Company (instead of a Paying Party), IDS agreed to transfer the portion of the IDS Shares equal to the Applicable Portion, to the Company.

Until such time as the IDS Shares are no longer held by IDS, IDS agreed not to transfer or encumber any of such shares, except pursuant to the terms of the IP Purchase Amendment.

IDS also agreed to transfer certain unbranded travel videos back to the Company which were previously purchased by IDS from Monaker, pursuantPursuant to the IP Purchase Agreement.

A further requirement of the IP Purchase Amendment, was that IDS enter into a Shareholder Voting Representation Agreement with William Kerby, our Chief Executive Officer and director (the “Shareholder Voting Agreement”), which was entered into effective on May 18, 2021. Pursuant to the Shareholder Voting Agreement, IDS provided Mr. Kerby the right to, and an irrevocable proxy to, vote all of the IDS Shares held by IDS at any meeting of stockholders of the Company and/or via any written consent of stockholders of the Company. The Shareholder Voting Agreement remains in place until the earlier of the fifth anniversary of the Shareholder Voting Agreement; the disposition of the IDS Shares pursuant to the IP Purchase Amendment; a change of control of Monaker resulting in persons prior to such transaction obtaining more than 50% voting control of the Company following such transaction; the sale of all or substantially all of the assets of the Company; or termination of the agreement by Mr. Kerby. Mr. Kerby may also assign his rights under the agreement to another party and/or the Company may assign Mr. Kerby’s rights under the agreement if Mr. Kerby is unable to make such assignment due to his death or disability. Mr. Kerby was provided the voting rights as the shareholder representative of, and for the benefit of, the Company.

Also effective on May 18,19, 2021, the Company IDS, TD Assetmade the initial payment of $0.5 million. Thereafter, the first 344,400 shares of common stock repurchased by the Company were returned to treasury and Ari Daniels,cancelled.

On September 27, 2021, the Court entered into a Confidential Settlement Agreementthe Agreed Order. The Court ordered that:

(i)the Company resume the monthly payment on or before September 28, 2021 (which payment has not been made due to failure of IDS to provide required documents);

(ii)$24,583.33 shall be paid monthly to one of IDS’ counsel and the balance of each payment shall be paid to the IDS Defendants; and

(iii)$20,000 of the 12th monthly payments shall be withheld pending further order of the court; and

(iv)NextPlay (formerly Monaker) was awarded its fees and costs associated with the filing of the Motion.

As of February 28, 2022 and Mutual Release, whereby (a) we provided a general release to IDS, TD Asset and Mr. Daniels, and (b) IDS, TD Asset and Mr. Daniel provided a general release to us;through the parties agreed to file a Joint Notice of Voluntary Dismissal to dismiss the pending lawsuit discussed above; and the parties agreed that a prior Web Based Booking Engine Development Agreement dated October 24, 2017, was terminated.

We expect the parties to the litigation above to file a joint notice for voluntary dismissal of the lawsuit shortly after thefiling date of this Report.

Recent Issues Surrounding the COVID-19 Pandemic

In December 2019, a novel strain of coronavirus, which causes the infectious disease known as COVID-19, was reported in Wuhan, China. The World Health Organization declared COVID-19 a “Public Health Emergency of International Concern” on January 30, 2020 and a global pandemic on March 11, 2020. In March and April, many U.S. states and local jurisdictions began issuing ‘stay-at-home’ orders. For example, the state of Florida, where the Company’s principal business operations are, issued a ‘stay-at-home’ order effective on April 1, 2020, which remained in place, subject to certain exceptions, through June 2020, when the order was gradually lifted. Since that time the U.S., and Florida in particular, have seen rapid increases in the spread of COVID-19. It is currently unclear whether the state of Florida, or the other states, countries or other jurisdictions in which we provide travel services, will issue new or expanded ‘stay-at-home’ orders, or how those orders, or others, may affect our operations and/or results of operations, notwithstanding the current roll-out of COVID-19 vaccines. It is also too early to determine how effective the available vaccines will be to curb the spread or effects of COVID-19, or how many persons will choose to receive the vaccine.


The COVID-19 pandemic, and governmental responses thereto, including travel restrictions, ‘stay-at-home’ orders and required social distancing orders, have severely restricted the level of economic activity around the world, and is having an unprecedented effect on the global travel industry. Additionally, the ability to travelReport, IDS still has been curtailed through border closures, mandated travel restrictions and limited operations of hotels, airlines, and may be further limited through additional voluntary or mandated closures of travel-related businesses.

The measures implemented to contain the COVID-19 pandemic have had, and are expected to continue to have, a significant negative effect on our business, financial condition, results of operations, cash flows and liquidity position. In particular, such measures have led to unprecedented levels of cancellations and limited new travel bookings. Moreover,not provided any additional measures or changes in laws or regulations, whether in the United States or other countries, that further impair the ability or desire of individuals to travel, including laws or regulations banning travel, requiring the closure of hotels or other travel-related businesses (such as restaurants) or otherwise restricting travel due to the risk of the spreading of COVID-19, may exacerbatenecessary documents in order for the negative impact of the COVID-19 pandemic on our business, financial condition, results of operations, cash flows and liquidity position.stock transfers.


 

The duration and severity of the COVID-19 pandemic are uncertain and difficult to predict at this time. The pandemic could continue to impede global economic activity for an extended period of time, even as restrictions are being lifted in many jurisdictions (including the United States) and vaccines are being made available, leading to decreased per capita income and disposable income, increased and sustained unemployment or a decline in consumer confidence, all of which could significantly reduce discretionary spending by individuals and businesses on travel and may create a recession in the United States or globally. In turn, that could have a negative impact on demand for our services. We also cannot predict the long-term effects of the COVID-19 pandemic on our partners and their business and operations or the ways that the pandemic may fundamentally alter the travel industry. The aforementioned circumstances could result in a material adverse impact on our business, financial condition, results of operations and cash flows, potentially for a prolonged period.

Although we currently cannot predict the full impact of the COVID-19 pandemic on our fiscal 2022 financial results relating to our operations, we anticipate an increase in year-over-year revenue as compared to fiscal year 2021 ended February 28, 2021. However, the ultimate extent of the COVID-19 pandemic and its impact on global travel and overall economic activity is constantly changing and impossible to predict currently.

Separately, our capital requirements may increase in the near term and long-term due to the impact of the COVID-19 pandemic, the resulting reduced demand for travel services, the increases in cancellations and re-bookings, and the extent to which such pandemic may further impact the ability of our customers to fulfill their payment obligations.

As a result of the above, in the event the HotPlay Share Exchange described above does not close timely, if at all, and/or if the HotPlay Share Exchange is terminated, we may be forced to scale back our operations, adjust our plan of operations, borrow or raise additional funding, which may not be available on favorable terms if at all. In the event we require and are unable to raise additional funding in the future, we may be forced to seek bankruptcy protection.


Item 1A. Risk Factors

In addition to the other information in this Annual Report, readers should carefully consider the following important factors. These factors, among others, in some cases have affected, andand/or in the future could affect, our financial condition and results of operations and could cause our future results to differ materially from those expressed or implied in any forward-looking statements that appear in this Annual Report or that we have made or will make elsewhere.

Risks Related to Our Operations, Business and IndustryGenerally

We need additional capital which may not be available on commercially acceptable terms, if at all, which raises questions about our ability to continue as a going concern.

As of February 28, 2021,2022, we had $26.0an accumulated deficit of $39.2 million. Net loss for the year ended February 28, 2022, amounted to $40.4 million. Our NextMedia division generated gross profits of $4.8 million, in total assets, $6.8our NextFinTech division generated gross profits of $1.1 million in total liabilities,and our NextTrip division generated gross profits of $0.02 million for the year ended February 28, 2022, and as of February 28, 2022, we had working capital of $6.0 million and a total accumulated deficit of $132.3$6.3 million. We had net loss of $16,508,654 for the FYE February 28, 2021, compared to net loss of $9,454,686 for the FYE February 29, 2020, an increase in net loss of $7,053,968 from the prior period. The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern.

We are subject to all the substantial risks inherent in the development of a new business enterprise within an extremely competitive industry.industries. Due to the absence of a long-standing operating history and the emerging nature of the markets in which we compete, we anticipate operating losses until we can successfully implement our business strategy, which includes all associated revenue streams. Our revenue model is new and evolving, and we cannot be certain that it will be successful. The potential profitability of this business model is unproven. We may never ever achieve profitable operations or generate significant revenues. Our future operating results depend on many factors, including, without limitation, demand for our products, the level of competition, and the ability of our officers to manage our business and growth. As a result of the emerging nature of the marketmarkets in which we compete, we may incur operating losses until such time as we can develop a substantial and stable revenue base. Additional development expenses may delay or negatively impact the ability of the Company to generate profits. Accordingly, we cannot assure you that our business model will be successful or that we can sustain revenue growth, achieve, or sustain profitability, or continue as a going concern. Furthermore, due to our relatively small size and market footprint, we may be more susceptible to issues affecting the cryptocurrency, gaming, banking and global travel cryptocurrency and banking (assuming the IFEB acquisition is successfully completed) industries in general, such as COVID-19, contractions in the cryptocurrency, gaming, banking and global travel industry, cryptocurrency and banking (assuming the IFEB acquisition is successfully completed)industries, or regulatory changes, as compared to larger competitors.

We currently have a monthly cash requirement of approximately $600,000.$1,500,000. We believe that in the aggregate, we could require several millions of dollars to support and expand the marketing and development of our products, repay debt obligations, provide capital expenditures for additional equipment and development costs, payment obligations, office space and systems for managing the business, and cover other operating costs until our planned revenue streams from all products are fully implemented and begin to offset our operating costs. We require additional funding in the future and if we are unable to obtain additional funding on acceptable terms, or at all, it will negatively impact our business, financial condition, and liquidity. As of February 28, 2021, and February 29, 2020,2022, we had $6,825,072 and $4,078,849, respectively,$27.5  million of current liabilities.

We have derived our funding of operations with equity transactions and with the proceeds from debt offerings. Currently, revenues provide less than 1% of our cash requirements due to the COVID-19 pandemic.

We have experienced liquidity issues due to, among other reasons, our limited ability to raise adequate capital on acceptable terms. We have historically relied upon the sale of common stockour securities and the issuance of promissory notes to fund our operations and have devoted significant efforts to reduce that exposure. We anticipate that we will need to issue equityobtain additional funding to fund oursupport the operations and to continue to repay our outstanding debt for the foreseeable future. If we are unable to achieve operational profitability or are not successful in securing other forms of financing, we will have to evaluate alternative actions to reduce our operating expenses and conserve cash.

These conditions raise substantial doubt about our ability to continue as a going concern for the next twelve months. The accompanying financial statements included elsewhere in this Report have been prepared in accordance with accounting principles generally accepted in the United States of America on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. Accordingly, thesuch financial statements do not include any adjustments relating to the recoverability of assets and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The financial statements included hereinelsewhere in this Report also include a going concern footnote from our auditors.


In the event we are unable to raise adequate funding in the future for our operations and to pay our outstanding debt obligations, we may be forced to scale back our business plan and/or liquidate some or all of our assets or may be forced to seek bankruptcy protection, which could result in the value of our outstanding securities declining in value or becoming worthless.


 

TheGlobal pandemics, such as COVID-19 pandemic hashave had, and is expected to continue tocould in the future have, a material adverse impact on the travel industry and our business, operating results, and liquidity.

Our business and operations have been, and could in the future be, adversely affected by health epidemics, such as the global COVID-19 pandemic. The COVID-19 pandemic and efforts to control its spread have curtailed the movement of people, goods and services worldwide, including in the regions in which the Company and our clients and partners operate, and are significantly impacting economic activity and financial markets. Many marketers have decreased or paused their advertising spending as a response to the economic uncertainty, decline in business activity, and other COVID-related impacts, which have negatively impacted, and may continue to negatively impact, our revenue and results of operations. The COVID-19 pandemic, and governmental responses thereto, including travel restrictions, ‘stay-at-home’ orders and required social distancing orders, have severely restricted the level of economic activity around the world, and is havingalso had an unprecedented effect on the global travel industry. Additionally, theThe ability to travel has been curtailed through border closures, mandated testing, mandated travel restrictions and limited operations of hotels and airlines, which has resulted in unprecedented levels of cancellations and limited new travel bookings in our NextTrip division and may be further limited through additional voluntary or mandated closures of travel-related businesses.

The measures implemented to contain the COVID-19 pandemic In addition, our clients’, advertisers’ and partners’ businesses or cash flows have had,been and are expected tomay continue to have, a significant negative effectbe negatively impacted by COVID-19, which has and may continue to lead them to seek adjustments to payment terms or delay making payments or default on their payables, any of which may impact the timely receipt and/or collectability of our business, financial condition, results of operations, cash flows and liquidity position. In particular, such measures have led to unprecedented levels of cancellations and limited new travel bookings in our travel division. Moreover, any additional measures or changes in laws or regulations, whether in the United States or other countries, that further impair the ability or desire of individuals to travel, including laws or regulations banning travel, requiring the closure of hotels or other travel-related businesses (such as restaurants) or otherwise restricting travel due to the risk of the spreading of COVID-19, may exacerbate the negative impact of the COVID-19 pandemic on our business, financial condition, results of operations, cash flows and liquidity position.receivables.

The duration and severity of the COVID-19 pandemic are still uncertain and difficult to predict. The pandemic could continue to impede global economic activity for an extended period, even as restrictions have been lifted in many jurisdictions and vaccines are now widely available in the United States and in many other jurisdictions, leading to decreased per capita income and disposable income, increased and sustained unemployment or a decline in consumer confidence, all of which could significantly reduce discretionary spending by individuals and businesses on travel and may create a recession in the United States or globally. In turn, that could have a negative impact on demand for our services.jurisdictions. We also cannot predict the long-term effects of the COVID-19 pandemic on our partners and their business and operations, or the ways that the pandemic may fundamentally alter the travel industry. The aforementioned circumstances could resultindustries in a material adversewhich we operate. Moreover, any additional COVID-related measures, restrictions or changes in laws or regulations, whether in the United States or other countries, may exacerbate the negative impact of the COVID-19 pandemic on our business, financial condition, results of operations, and cash flows potentially for a prolonged period.

The Company’sand liquidity could also be adversely impacted by delays in payments of outstanding accounts receivable amounts beyond normal payment terms and insolvencies.position.

Although weWe currently cannot predict the full impact of the COVID-19 pandemic on our fiscal 2022 financial results relating to our operations, we anticipate an increase in year-over-year revenue for our fiscal 2023 year as compared to fiscal year 2021 ended2022 (ended February 28, 2021.2022). However, the ultimate extent of the COVID-19 pandemic and its impact on global travelthe industries in which we operate and overall economic activity is constantly changing and impossible to predict currently.

Separately, our capital requirements associated with our travel division may increase Furthermore, we do not currently anticipate future revenues will be sufficient to support or operating expenses in the near termterm.

Economic downturns and long-term due tomarket conditions beyond our control could adversely affect our business, financial condition and results of operations.

Our business depends on the impact of the COVID-19 pandemic, the resulting reducedoverall demand for advertising, video games, financial services, travel services,and other technology offerings. Economic downturns or unstable market conditions may cause advertisers to decrease or pause their advertising budgets, which could reduce spend though our IGA and real-time rewards platform. Similarly, economic downturns could also decrease the increasesamount of disposable income gamers have available for the purchase of our video game offerings, customers have to invest in cancellations and re-bookings, andcryptocurrencies, and/or that our customers have to travel. Additionally, as described above, public health crises may disrupt the extent to which such pandemic may further impact the abilityoperations of our customers and partners for an unknown period of time, including as a result of travel restrictions and/or business shutdowns, all of which could negatively impact their business and results of operations, including cash flows. Economic downturns and less than optimal market conditions could adversely affect our business, financial condition and results of operations.

We have a limited operating history in certain of the industries that we currently operate in and have incurred significant operating losses since inception. We may never become profitable or, if achieved, be able to fulfill their payment obligations.sustain profitability.

There is no significant operating history upon which to base any assumption as to the likelihood that certain of our business endeavors will prove successful, and we may never achieve profitable operations. We currently expect to incur net losses for the foreseeable future. Even if we do achieve profitability, there can be no guarantee that we will be able to sustain profitability. As a result of the above,acquisition of HotPlay in 2021 (and subsequent acquisitions), our business model has changed significantly in the eventlast year, and we have limited experience in certain of the HotPlay Share Exchange described above under “Item 1. Business—Recent Material Events—HotPlayindustries that we now operate in. If we are unsuccessful in infiltrating and Axion Share Exchanges”, does not close timely, if at all, we may be forced to scale backselling our operations, adjust our plan of operations, borrow or raise additional funding, which may not be available on favorable terms if at all. In the event we requireproducts and are unable to raise additional fundingservices in the future,industries that we may be forcedoperate in, it will have a material adverse impact on our business, financial condition and results of operations.


We have significant indebtedness, which could adversely affect our business and financial condition.

We currently have significant indebtedness. As of February 28, 2022, we had total current liabilities of $27.5  million. Risks relating to seek bankruptcy protection.

our indebtedness include, without limitation:


increasing our vulnerability to general adverse economic and industry conditions;
requiring us to dedicate a portion of our cash flow from operations to principal and interest payments on our indebtedness, thereby reducing the availability of cash flow to fund working capital, capital expenditures, acquisitions and investments and other general corporate purposes;
making it more difficult for us to optimally capitalize and manage the cash flow for our businesses;
limiting our flexibility in planning for, or reacting to, changes in our businesses and the markets in which we operate;
possibly placing us at a competitive disadvantage compared to our competitors that have less debt; and
limiting our ability to borrow additional funds or to borrow funds at rates or on other terms that we find acceptable.

The $190,000 owed to usOur obligations under Secured Convertible Promissorythe October 2021 and May 2022 Streeterville Notes are secured by a first priority security interest in substantially all of our assets.

On October 22, 2021 and May 5, 2022, we entered into Note due from Bettwork Industries Inc., may not be repaid timely, if at all.

Bettwork Industries Inc. (“Bettwork”), a related party owes us $190,000Purchase Agreements with Streeterville, pursuant to a promissory note (the “Bettwork Note”).which we sold Streeterville the October 2021 and May 2022 Streeterville Notes, in the aggregate principal amount of $2,765,000. The Bettwork Note bearsOctober 2021 and May 2022 Streeterville Notes all bear interest at 12% per year and was due on February 29, 2020. All interest and the principal balance were due and payable on the maturity date. The Bettwork Note includes a Default Raterate of eighteen percent (18.0%)10% per annum and is secured by allmature 12 months from their date of issuance. For so long as any of the notes remain outstanding, preferred stock shares held by the Chairmanwe have agreed to pay to Streeterville 20% of the boardgross proceeds that we receive from the sale of directors of Bettwork (which provide for super-majority voting rights) and Bettwork is precluded from issuing additional shares ofour common stock or preferred stock without consent from Monaker. Additionally, we havewithin ten days of receiving such amount, which payments will be applied towards and will reduce the rightoutstanding balance of the notes, which percentage increases to convert30% upon the principaloccurrence of, and accrued interest owedcontinuance of, an event of default under the Bettwork NoteStreeterville Note.

In connection with issuance of the October 2021 and May 2022 Streeterville Notes, we entered into common stockSecurity Agreements with Streeterville, pursuant to which our obligations to Streeterville under the notes are secured by substantially all of Bettwork at a conversion priceour assets. As such, Streeterville may enforce its security interests over our assets and/or our subsidiaries that secure the repayment of $0.75 per share (as equitably adjusted for stock splitssuch obligations, take control of our assets and recapitalizations). The Bettwork Note isoperations, force us to seek bankruptcy protection or force us to curtail or abandon our current business plans and operations. If that were to happen, any investment in default, Bettwork may never pay the Bettwork Note and we may never collect on amounts owed thereunder.Company could become worthless.

Our ability to service our indebtedness will depend on our ability to generate cash and/or raise additional capital in the future.

Our ability to make payments on our indebtedness will depend on our ability to generate cash in the future andand/or raise neededadditional capital. Our ability to generate cash is subject to general economic and market conditions and financial, competitive, legislative, regulatory and other factors that are beyond our control. Our businessWe may continue to not generate sufficient cash to fund our working capital requirements, capital expenditure, debt service and other liquidity needs, and we may not be able to obtain additional financing on terms favorable to us (if at all), either of which could result in our inability to comply with financial and other covenants contained in our debt agreements, our being unable to repay or pay interest on our indebtedness, and our inability to fund our other liquidity needs. If we are unable to service our debt obligations, fund our other liquidity needs, and maintain compliance with our financial and other covenants, we could be forced to curtail our operations, our creditors could accelerate our indebtedness and exercise other remedies and we could be required to pursue one or more alternative strategies, such as selling assets or refinancing or restructuring our indebtedness. However, such alternatives may not be feasible or adequate.


 

We have agreed to hold meetings of our stockholders every 90 days for purposes of removing the Floor Price of certain Warrants, which may be time consuming and expensive.

On November 3, 2021, we sold Warrants (the “2021 Warrants”) to purchase an aggregate of 14,240,508 shares of common stock, together with 18,987,342 shares of our common stock, to certain accredited investors in a registered direct offering. Each 2021 Warrant has an initial exercise price of $1.97 per share (the Floor Price), and may be exercised commencing six months after the issuance date and terminating on the fifth anniversary thereof. The 2021 Warrants provide that if at any time the 2021 Warrants are outstanding, we issue or enter into any agreement to issue, or are deemed to have issued or entered into an agreement to issue, certain securities for consideration less than the then current exercise price of the 2021 Warrants, the exercise price of such 2021 Warrants will be automatically reduced to the lowest price per share of consideration provided or deemed to have been provided for such securities; provided, however, that unless and until we have received stockholder approval to reduce the exercise price of the 2021 Warrants below the Floor Price, no such adjustment to the exercise price may be made.

We have agreed to hold a special meeting of our stockholders every 90 days for the life of the 2021 Warrants to obtain stockholder approval of the removal of the Floor Price, which stockholder approval may never be obtained. Holding stockholder meetings is expensive and requires significant time and efforts of our management. If stockholder approval is not obtained during the life of the 2021 Warrants, such expenses and diversion of management’s time and efforts could have a material adverse effect on our financial condition, business, and operations.

Our long-term success depends, in part, on our ability to continue to expand our operations outside of the United States and, as a result, our business is susceptible to risks associated with international operations.

We currently conduct business throughout the world and expect that international sales (including in emerging markets in Asia and elsewhere) will account for a significant portion of our total revenues and profits in the near term. We are making significant investments to continue to build our international operations and to expand globally, which may include acquiring international businesses and conducting business in jurisdictions where we do not currently operate. Managing a global organization is difficult, time consuming and expensive, and any international expansion efforts that we undertake may not be profitable in the near or long term or otherwise be successful. In addition, conducting international operations subjects us to risks that include, amongst other things:

the cost and resources required to localize our services, which requires the translation of our websites and their adaptation for local practices and legal and regulatory requirements;
adjusting the products and services we provide in foreign jurisdictions, as needed, to better address the needs of local owners, managers, distributors and travelers, and the threats of local competitors;
being subject to foreign laws and regulations, including those laws governing Internet activities, email messaging, collection and use of personal information, ownership of intellectual property, taxation and other activities important to our online business practices, which may be less developed, less predictable, more restrictive, and less familiar, and which may adversely affect financial results in certain regions;
competition with companies that understand the local market better than we do or who have pre-existing relationships with property owners, managers, distributors and travelers in those markets;
legal uncertainty regarding our liability for the transactions and content on our websites, including uncertainty resulting from unique local laws or a lack of clear precedent of applicable law;
lack of familiarity with, and the burden of complying with, a wide variety of other foreign laws, legal standards and foreign regulatory requirements, including invoicing, data collection and storage, financial reporting and tax compliance requirements, which are subject to unexpected changes;
laws and business practices that favor local competitors or prohibit or limit foreign ownership of certain businesses;
adapting to variations in foreign payment forms;
difficulties in managing and staffing international operations and establishing or maintaining operational efficiencies;
difficulties in establishing and maintaining adequate internal controls and security over our data and systems;
currency exchange restrictions and fluctuations in currency exchange rates;
potentially adverse tax consequences, which may be difficult to predict, including the complexities of foreign value added tax systems and restrictions on the repatriation of earnings;


increased financial accounting and reporting burdens and complexities and difficulties in implementing and maintaining adequate internal controls;

political, social and economic instability abroad, war, terrorist attacks and security concerns in general;

the potential failure of financial institutions internationally;
varying effects of global pandemics and epidemics, including COVID-19 on different countries;
reduced or varied protection for intellectual property rights in some countries; and
higher telecommunications and Internet service provider costs.

Operating in international markets also requires significant management attention and financial resources. We cannot guarantee that our international expansion efforts in any or multiple territories will be successful. The investment and additional resources required to establish operations and manage growth in other countries may not produce desired levels of revenue or profitability and could instead result in increased costs.

We are exposed to fluctuations in currency exchange rates.

Because we conduct a significant portion of our business outside the United States but report our results in U.S. dollars, we face exposure to adverse movements in currency exchange rates, which may cause our revenue and operating results to differ materially from expectations. In addition, fluctuation in our mix of U.S. and foreign currency denominated transactions may contribute to this effect as exchange rates vary. Moreover, as a result of these exchange rate fluctuations, revenue, cost of revenue, operating expenses and other operating results may differ materially from expectations when translated from the local currency into U.S. dollars upon consolidation. For example, if the U.S. dollar strengthens relative to foreign currencies our non-U.S. revenue would be adversely affected when translated into U.S. dollars. Conversely, a decline in the U.S. dollar relative to foreign currencies would increase our non-U.S. revenue when translated into U.S. dollars. We may enter into hedging arrangements in order to manage foreign currency exposure but such activity may not completely eliminate fluctuations in our operating results. 

We may be adversely affected by the effects of inflation.

Inflation has the potential to adversely affect our liquidity, business, financial condition and results of operations by increasing our overall cost structure, particularly if we are unable to achieve commensurate increases in the prices we charge our customers. The existence of inflation in the economy has resulted in, and may continue to result in, higher interest rates and capital costs, shipping costs, supply shortages, increased costs of labor, weakening exchange rates and other similar effects. As a result of inflation, we have experienced and may continue to experience, cost increases. Although we may take measures to mitigate the impact of this inflation, if these measures are not effective, our business, financial condition, results of operations and liquidity could be materially adversely affected. Even if such measures are effective, there could be a difference between the timing of when these beneficial actions impact our results of operations and when the cost of inflation is incurred.

We are currently operating in a period of economic uncertainty and capital markets disruption, which has been significantly impacted by geopolitical instability due to the ongoing military conflict between Russia and Ukraine. Our business, financial condition and results of operations could be materially adversely affected by any negative impact on the global economy and capital markets resulting from the conflict in Ukraine or any other geopolitical tensions.

U.S. and global markets are experiencing volatility and disruption following the escalation of geopolitical tensions and the start of the military conflict between Russia and Ukraine. On February 24, 2022, a full-scale military invasion of Ukraine by Russian troops was reported. Although the length and impact of the ongoing military conflict is highly unpredictable, the conflict in Ukraine could lead to market disruptions, including significant volatility in commodity prices, credit and capital markets, as well as supply chain interruptions. We are continuing to monitor the situation in Ukraine and globally and assessing its potential impact on our business.

Additionally, the recent military conflict in Ukraine has led to sanctions and other penalties being levied by the United States, European Union and other countries against Russia. Additional potential sanctions and penalties have also been proposed and/or threatened. Russian military actions and the resulting sanctions could adversely affect the global economy and financial markets and lead to instability and lack of liquidity in capital markets, potentially making it more difficult for us to obtain additional funds.

Although our business has not been materially impacted by the ongoing military conflict between Russian and Ukraine to date, it is impossible to predict the extent to which our operations, or those of our suppliers and manufacturers, will be impacted in the short and long term, or the ways in which the conflict may impact our business. The extent and duration of the military action, sanctions and resulting market disruptions are impossible to predict, but could be substantial. Any such disruptions may also magnify the impact of other risks described in this Report.


We currently rely on a small number of third-party service providers to host and deliver a significant portion of our products and services, and any interruptions or delays in services from these third parties could impair the delivery of our products and services and harm our business.

We rely on third-party service providers for numerous products and services, including payment processing services, data center services, web hosting services, online gaming platforms, insurance products for customers and travelers and some customer service functions. We rely on these companies to provide uninterrupted services and to provide their services in accordance with all applicable laws, rules and regulations.

We use a combination of third-party data centers to host our websites and core services. We do not control the operation of any of the third-party data center facilities we use. These facilities may be subject to break-ins, computer viruses, denial-of-service attacks, sabotage, acts of vandalism and other misconduct. They are also vulnerable to damage or interruption from power loss, telecommunications failures, fires, floods, earthquakes, hurricanes, tornadoes and similar events. We currently do not have a comprehensive disaster recovery plan in place. As a result, the occurrence of any of these events, a decision by our third-party service providers to close their data center facilities or to terminate their contracts with us without adequate notice or other unanticipated problems could result in loss of data as well as a significant interruption in our products and services and harm to our reputation and brand.

Furthermore, we depend on continuous and uninterrupted access to the Internet through third-party bandwidth providers to operate our business. If we lose the services of one or more of our bandwidth providers for any reason, or if their services are disrupted, we could experience disruption in our products and services or we could be required to make monthly redemptionretain the services of a replacement bandwidth provider, which could harm our business and reputation.

If these companies experience difficulties and are not able to provide services in a reliable and secure manner, if they do not operate in compliance with applicable laws, rules and regulations and, with respect to payment and card processing companies, if they are unable to effectively combat the use of fraudulent payments at the requeston our websites or games, our results of Streeterville under the Streeterville Capital, LLC Promissory Notes,operations and financial positions could be materially and adversely affected. In addition, if such third-party service providers were to cease operations or face other business disruption either temporarily or permanently, or otherwise face serious performance problems, we could suffer increased costs and delays until we find or develop an equivalent replacement, any of which could have an adverse impact on our obligations under the Streeterville Capital, LLC Promissory Notes are secured by a first priority security interestbusiness and financial performance.

Currently pending or future litigation or governmental proceedings could result in substantially all of our assets.material adverse consequences, including judgments or settlements.

As described in greater detail above under “Item 1. Business—Recent Material Events—Streeterville Note Purchases”, we currently have outstanding secured promissory notes due to Streeterville totaling approximately $2.3 million as of February 28, 2021 and approximately $7.2 million as of the date of this Report. From time to time, beginning six months after issuance (i.e.,we are involved in May 2021), Streetervillelawsuits, regulatory inquiries, and may redeem a portionbe involved in governmental and other legal proceedings arising out of the November 2020 Streeterville Note,ordinary course of our business. Many of these matters raise difficult and complicated factual and legal issues and are subject to uncertainties and complexities. The timing of the final resolutions to these types of matters is often uncertain. Additionally, the possible outcomes or resolutions to these matters could include adverse judgments or settlements, either of which could require substantial payments, adversely affecting our results of operations and liquidity.

Changes in our effective tax rate could harm our future operating results.

We are subject to federal and state income taxes in the United States and in various foreign jurisdictions. Our provision for income taxes and our effective tax rate are subject to volatility and could be adversely affected by several circumstances, including:

earnings being lower than anticipated in countries that have lower tax rates and higher than anticipated in countries that have higher tax rates;
effects of certain non-tax-deductible expenses;
changes in the valuation of our deferred tax assets and liabilities;
transfer pricing adjustments, including the effect of acquisitions on our intercompany research and development cost sharing arrangement and legal structure;
adverse outcomes resulting from any tax audit;
our ability to utilize our net operating losses and other deferred tax assets; and
changes in accounting principles or changes in tax laws and regulations, or the application of the tax laws and regulations, including possible U.S. changes to the deductibility of expenses attributable to foreign income, or the foreign tax credit rules.

Significant judgment is required in the application of accounting guidance relating to uncertainty in income taxes. If tax authorities challenge our tax positions and any such challenges are settled unfavorably, it could adversely impact our provision for income taxes.


The industries in which we participate are highly competitive, and we may be unable to compete successfully with our current or future competitors.

The advertising, gaming, communications, FinTech, digital assets, and travel industries are all highly competitive. Our NextMedia business competes with companies that sell advertising, as well as with companies that provide social, media, and communication products and services that are designed to engage users on mobile devices and online. We face significant competition in every aspect of our NextMedia business, including from companies that facilitate communication and the sharing of content and information, companies that enable marketers to display advertising, companies that distribute video and other forms of media content, and companies that provide development platforms for applications developers. Additionally, we have seen, and expect to continue to see, new competitors enter the market for mobile games and existing competitors to allocate more resources to developing and marketing competing mobile games and applications.

The digital assets industry is highly innovative, rapidly evolving, and characterized by healthy competition, experimentation, changing customer needs, frequent introductions of new products and services, and subject to uncertain and evolving industry and regulatory requirements. Our NextFinTech business competes with other FinTech companies, including a number of companies operating both within the United States and abroad, and both those that focus on traditional financial services and those that focus on digital assets-based services. We expect competition in this sector to further intensify in the future as existing and new competitors introduce new products or enhance existing products.

Our NextTrip division is also subject to intense competition. The market to provide listing, search and marketing services for the ALR industry is very competitive and highly fragmented. In addition, the barriers to entry are low and new competitors may enter. There are thousands of vacation rental listing websites that compete directly with us for listings, travelers, or both, such as Booking.com, HomeAway.com, Airbnb, and TripAdvisor. Many of these competitors offer free or heavily discounted listings or focus on a particular geographic location or a specific type of rental property. Some of them also aggregate property listings obtained through various sources, including the websites of property managers some of whom will also market their properties on our websites. Competitors also operate websites directed at the wider fragmented travel lodging market, such as Airbnb and HomeAway, by listing either rooms or the owner’s primary home. We also compete with online travel agency websites, such as Expedia, Hotels.com, Kayak, Priceline, Booking.com, Orbitz and Travelocity, which have traditionally provided comprehensive travel services and some of whom are now expanding into the vacation rental category.

In addition, many of our current or potential competitors are larger, have longer operating histories, and have greater financial, technical, marketing, research and development, and other resources than we do. Many of our current and potential competitors enjoy substantial competitive advantages, such as greater name recognition in their markets, longer operating histories and larger marketing budgets, as well as substantially greater financial, technical and other resources. Many of our competitors offer products and services directed at more specific markets than those we target, enabling these competitors to focus a greater proportion of their efforts and resources on these markets. As a result, our competitors may be able to respond more quickly and effectively than we can to new or changing opportunities and technologies. Furthermore, because of these advantages, existing and potential partners, customers, clients, and distributors might accept our competitors’ offerings, even if they may be inferior to ours. For all of these reasons, we may not be able to exceed $1.25 million.compete successfully against our current and future competitors. Any material decrease in demand for our products or services may have a material adverse effect on our business, financial condition, and results of operations.

Our failure to be current in our filings with the SEC could pose significant risks to our business, which could, individually or in the aggregate, materially and adversely affect our financial condition and results of operations.

Despite our efforts, we were unable to file this Report with the SEC on or before the applicable filing deadline. We may face various consequences as a result, as further discussed below, which could, individually or in the aggregate have a material adverse affect on our financial condition and results of operations.

Under the Exchange Act, the Company (as a reporting company) is required to file certain periodic and current reports with the SEC in order to provide investors important financial and business information related to the Company. Examples of these reports include the annually filed Form 10-K and the quarterly filed Form 10-Q. Periodic reports help investors to make informed investment decisions about the purchase or sale of a reporting company’s securities. The timely and complete submission of periodic reports provides investors with information to help them make informed investment decisions. The SEC’s Divisions of Enforcement and Corporation Finance jointly established the Delinquent Filings Program in 2004 to encourage reporting companies that are delinquent in filing their periodic reports to submit their periodic reports or rectify deficient periodic reports. If a reporting company identified as a delinquent filer fails to submit its periodic reports, Section 12(k) of the Exchange Act gives the SEC the authority to suspend trading in a security for up to 10 trading days if the SEC believes that a suspension is required to protect investors and the public interest. A trading suspension by the SEC halts the trading in a security on all trading platforms. In addition, Section 12(j) gives the eventSEC the authority to revoke, or suspend for up to twelve months, an issuer’s securities registration if, after an administrative hearing, the SEC finds that an issuer violated the Exchange Act by failing to file its periodic reports.

Additionally, issuers who have not timely filed their periodic reports lose their eligibility to offer and sell their securities under a Form S-3 Registration statement, which can make it more difficult for companies to raise funds in a timely and cost effective manner, or at all. Pursuant to Form S-3, unless relief is provided by the SEC, the loss of eligibility to use Form S-3 extends for a period of 12 months from the delinquent filing. As a result, unless we don’t payare able to obtain relief from the SEC, we will not be able to register any new securities on certain registration statements under the Securities Act, such as Forms S-3, until we have filed all reports required under the Exchange Act for a continuous period of 12 months. Should we wish to register the offer and sale of our securities to the public prior to the time we are eligible to use Form S-3, both our transaction costs and the amount of time required to complete the transaction could increase, making it more difficult to execute any requested redemption within threesuch transaction successfully and potentially harming our financial condition.

Our failure to timely file this Report SEC could have additional adverse impacts on our ability to, among other things, (i) access our ATM Offering facility; (ii) continue to have our common stock listed for quotation on the Nasdaq Capital Market; (iii) consummate certain strategic transactions; (iv) attract and retain key employees, or (v) raise funds in the public markets, and any of these events could materially and adversely affect our financial condition and results of operations.

Our common stock may be delisted from the Nasdaq Capital Market if we cannot satisfy Nasdaq’s continued listing requirements.

On January 26, 2022, the Company received a notification letter (the “Notice”) from the Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company that, because the closing bid price for the Company’s common stock was below $1.00 per share for 30 consecutive trading days, the Company is not currently in compliance with the minimum bid price requirement for continued listing on The Nasdaq Capital Market, as set forth in Nasdaq Marketplace Rule 5550(a)(2) (the “Minimum Bid Price Requirement”). The notification has no immediate effect on the listing of the Company’s common stock on the Nasdaq Capital Market, and, therefore, the Company’s listing remains fully effective.


In accordance with Nasdaq Marketplace Rule 58I0(c)(3)(A), the Company has a period of 180 calendar days from January 26, 2022, or until July 25, 2022, to regain compliance with the Minimum Bid Price Requirement. If at any time before July 25, 2022, the closing bid price of the Company’s common stock closes at or above $1.00 per share for a minimum of 10 consecutive business days, Nasdaq will provide written notification that the Company has achieved compliance with the Minimum Bid Price Requirement, and the matter would be resolved. If the Company does not regain compliance during the compliance period ending on July 25, 2022, then Nasdaq may grant the Company a second 180 calendar day grace period to regain compliance, provided the Company (i) meets the continued listing requirement for market value of publicly-held shares and all other initial listing standards for the Nasdaq Capital Market, other than the minimum closing bid price requirement, and (ii) the Company notifies Nasdaq of its intent to cure the deficiency.

The Company intends to continue actively monitoring the closing bid price for the Company’s common stock between now and July 25, 2022 and will consider available options to resolve the deficiency and regain compliance with the Minimum Bid Price Requirement. If the Company does not regain compliance within the allotted compliance period, including any extensions that may be granted by Nasdaq, Nasdaq will provide notice that the Company’s common stock will be subject to delisting. The Company would then be entitled to appeal that determination to a Nasdaq hearings panel. There can be no assurance that the Company will regain compliance with the Minimum Bid Price Requirement during the 180 days compliance period, secure a second period of 180 calendar days to regain compliance, or maintain compliance with the other Nasdaq listing requirements.

If our common stock is delisted from Nasdaq, it could come within the definition of “penny stock” as defined in the Exchange Act and would then be covered by Rule 15g-9 of the Exchange Act. That Rule imposes additional sales practice requirements on broker-dealers who sell securities to persons other than established customers and accredited investors. For transactions covered by Rule 15g-9, the broker-dealer must make a special suitability determination for the purchaser and receive the purchaser’s written agreement to the transaction prior to the sale. Consequently, Rule 15g-9, if it were to become applicable, would affect the ability or willingness of broker-dealers to sell our securities, and accordingly would affect the ability of stockholders to sell their securities in the public market. These additional procedures could also limit our ability to raise additional capital in the future.

If we do not successfully implement our acquisition strategies, the businesses and/or assets that we have acquired or invested in do not perform as expected, or we are unable to effectively integrate acquired businesses, our operating results and prospects could be harmed.

We face competition within our industry for acquisitions of businesses, technologies and assets, and, in the future, such competition may become more intense. As such, even if we are able to identify an amount equalacquisition that we would like to 25%consummate, we may not be able to complete the acquisition on commercially reasonable terms, or at all, because of such redemption amount is addedcompetition. Furthermore, if we enter into negotiations that are not ultimately consummated, those negotiations could result in the diversion of management time and significant out-of-pocket costs. Even if we are able to complete such acquisitions, we may additionally expend significant amounts of cash or incur substantial debt to finance them, which indebtedness could result in restrictions on our business and use of available cash. In addition, we may finance or otherwise complete acquisitions by issuing equity or convertible debt securities, which could result in dilution of our existing stockholders. If we fail to evaluate and execute acquisitions successfully, we may not be able to realize their benefits.

Any businesses that we acquire or invested in, or those that we have already acquired or invested in, may not perform as well as we expect. If the outstanding balancecompanies we have invested in do not perform well, our investments could become impaired and our financial results could be negatively impacted. Failure to manage and successfully integrate acquired businesses and technologies could materially harm our business, financial condition or operating results. Additionally, we rely heavily on the representations and warranties provided to us by the sellers of acquired companies and assets, including as they relate to creation, ownership and rights in intellectual property, existence of open-source software and compliance with laws and contractual requirements. If any of these representations and warranties are inaccurate or breached, such inaccuracy or breach could result in costly litigation and assessment of liability for which there may not be adequate recourse against such sellers, in part due to contractual time limitations and limitations of liability.


Some members of our senior management team have limited experience in the day-to-day operations of the November 2020 Streeterville Note. Underindustries in which our businesses operate.

Some members of our senior management team have limited experience with respect to certain circumstances, the Company may defer the redemption payments up to three times, for 30 days each, provided that upon each such deferral the outstanding balance of the November 2020 Streeterville Note is increased by 2%. From timeindustries in which we operate, including commercial banking (NextBank) and ICOs (Longroot), and may have limited experience in other industries and markets which we may choose to time, beginning six months after issuance (i.e., in August 2021), Streeterville may redeem a portionenter. Our management team relies on the knowledge and talent of the March 2021 Streeterville Note, notemployees in our operating subsidiaries to exceed $2.125 million. In the event we don’t pay the amount of any requested redemption within three trading days, an amount equal to 25% of such redemption amount is added to the outstanding balance of the March 2021 Streeterville Note. Under certain circumstances, the Company may defer the redemption payments up to three times, for 30 days each, provided that upon each such deferral the outstanding balance of the March 2021 Streeterville Note is increased by 2%.successfully operate these businesses on a day-to-day basis. We may not be able to retain, hire or train personnel as quickly or efficiently as we need or on terms that are acceptable to us. An inability to efficiently operate our businesses would have a material adverse effect on our business, financial conditions, results of operations, and prospects.

Our future success depends on the required fundscontinuing efforts of our key employees and our ability to payattract, hire, retain and motivate highly skilled employees in the required note redemptionsfuture.

Our future success depends on the continuing efforts of certain of our key employees including, without limitation, Nithinan Boonyawattanapisut (our Co-Chief Executive Officer and such redemptions,a director), William Kerby (our Co-Chief Executive Officer and a director), Sirapop “Kent” Taepakdee (our Chief Financial Officer), Timothy Sikora (our Chief Information Officer), Andrew Greaves (our Chief Operating Officer), and Mark Vange (our Chief Technology Officer). We rely on the leadership, knowledge and experience that our executive officers provide. We also rely in large part on our ability to attract and retain high-quality operating personnel, as well as skilled technical and marketing personnel. The market for talent in our areas of operation is intensely competitive. As a result, we may incur significant costs to attract and retain employees, including significant expenditures related to salaries and benefits and compensation expenses related to equity awards.

Employee turnover, including changes in our management team, could disrupt our business. All of our employees may terminate his or penalties in connection therewith, mayher employment with us at any time for any reason. The loss of one or more of our executive officers, or our inability to attract and retain highly skilled employees, could have an adverse effect on our cash flows,business, financial condition and results of operations.

Risks Related to Our NextMedia Business

We rely on relationships with developers to provide an extensive game portfolio and sufficient advertising spaces.

Our ability to sell advertising depends on establishing developers’ interest in integrating their mobile games with our platform. To provide sufficient inventory of advertising space, we need to maintain good relationships with developers and ensure our software does not impact any performance or weaken the security of the games that it integrates with. If our relationship with developers terminates for any reason, or if the commercial terms of our relationships are changed or do not continue to be renewed on favorable terms, we would need to qualify new developers, which could adversely impact our revenue and its business. Furthermore, in the event that game engines or other software frameworks that are used commonly by developers offer built-in features for advertising and rewards similar to the way we do, this could result in increased competition as developers may choose those options over ours.

We depend on servers and networks to operate our games and advertising. If we were to lose functionality in any of these areas for any reason, our businesses may be negatively impacted.

We rely on the continuous operation of servers, some of which are owned and operated by third parties. Although we strive to maintain more than sufficient server capacity, and provide for active redundancy in the event of limited hardware failure, any broad-based catastrophic server malfunction, a significant service-disrupting attack or intrusion by hackers that circumvents security measures, a failure of disaster recovery service or the failure of a company on which we are relying for server capacity to provide that capacity for whatever reason would likely degrade or interrupt the functionality of our software and products with online features, and could prevent the operation of such software and products altogether, any of which could result in the loss of sales.

We also rely on platforms and networks operated by third parties, such as the Apple Appstore and Google Play store, for the sale and digital delivery of downloadable games. An extended interruption to any of these services could adversely affect our ability to operate our NextMedia business, which could result in a loss of revenue and otherwise negatively impact our business.


Our products and internal systems rely on software and hardware that is highly technical, and any errors, bugs, or vulnerabilities in these systems, or failures to address or mitigate technical limitations in such systems, could adversely affect our business.

Our products and internal systems rely on software and hardware that is highly technical and complex. Additionally, our products and internal systems depend on the ability of such software and hardware to store, retrieve, process, and manage immense amounts of data. The software and hardware on which we rely may contain errors, bugs, or vulnerabilities, and our systems are subject to certain technical limitations that may compromise our ability to meet our objectives. Some errors, bugs, or vulnerabilities inherently may be difficult to detect and may only be discovered after the code has been released for external or internal use. Errors, bugs, vulnerabilities, design defects, or technical limitations within the software and hardware on which we rely have in the past led to, and may in the future lead to, outcomes including a negative experience for users and marketers who use such products; compromised ability of such products to perform in a manner consistent with our terms, contracts, or policies; delayed product introductions or enhancements; targeting, measurement, or billing errors; compromised ability to protect user data and/or our intellectual property; or reductions in our ability to provide some or all of our related services. In addition, any errors, bugs, vulnerabilities, or defects in our systems or the software and hardware on which we rely, failures to properly address or mitigate the technical limitations in our systems, or associated degradations or interruptions of service or failures to fulfill commitments to our users, have in the past led to, and may in the future lead to, outcomes including damage to our reputation, loss of users, loss of marketers, loss of revenue, regulatory inquiries, litigation, or liability for fines, damages, or other remedies, any of which could adversely affect our business and financial results.

The products or services we release may contain defects, bugs or errors.

Our products and services are extremely complex software programs and are difficult to develop and distribute. We have quality controls in place to detect defects, bugs or other errors in their products and services before they are released. Nonetheless, these quality controls are subject to human error, overriding, and resource or technical constraints. Our quality controls and preventative measures may not be effective in detecting all defects, bugs or errors in our products and services before they have been released into the marketplace. In such an event, the technological reliability and stability of our products and services could be below our standards and the standards of our players, and our reputation, brand and sales could be adversely affected. In addition, we could be required to, or may find it necessary to, offer a refund for the product or service, suspend the availability or sale of the product or service or expend significant resources to cure the defect, bug or error, each of which could significantly harm our business and operating results.

Our business partners may be unable to honor their obligations to us, or their actions may put us at risk.

We rely on various business partners, including third-party service providers, vendors, licensing partners, development partners, and licensees in many areas of our business. Their actions may put our business, reputation and brand at risk. In many cases, our business partners may be given access to sensitive and proprietary information in order to provide services and support to their teams, and they may misappropriate such information and engage in unauthorized use of it. In addition, the failure of these third parties to provide adequate services and technologies, or their failure to adequately maintain or update their services and technologies, could result in a disruption to our business operations. Further, disruptions in the financial markets, economic downturns including related to the COVID-19 pandemic, poor business decisions, or reputational harm may adversely affect our partners and they may not be able to continue honoring their obligations to us or could cease their arrangements with us. Alternative arrangements and services may not be available to us on commercially reasonable terms, if it all, or we may experience business interruptions upon a transition to an alternative partner or vendor. If we lose one or more significant business partners, our business could be harmed and our financial results could be materially affected.

We derive a significant portion of our revenues from advertisements, and if any events occur that negatively impact our relationships with advertisers, our advertising revenues and operating results would be negatively impacted.

We derive a significant portion of our revenues though advertisements and in-game offers. We must maintain good relationships with advertisers to ensure a sufficient inventory of advertisements and offers. Online advertising, including through mobile games and other mobile applications, is an intensely competitive industry. Many large companies, such as Amazon, Facebook and Google, invest significantly in data analytics to make their websites and platforms more attractive to advertisers. If our relationship with any advertising partners terminates for any reason, or if the commercial terms of our relationships are changed or do not continue to be renewed on favorable terms, we would need to qualify new advertising partners, which could negatively impact our revenues, at least in the short term.

In addition, Internet-connected devices and operating systems controlled by third parties increasingly contain features that allow device users to disable functionality that allows for the delivery of advertising on their devices. Device and browser manufacturers may include or expand these features as part of their standard device specifications.


Failure to launch a product for a major client, may adversely affect our growth.

We have an agreement in place with one of Southeast Asia’s largest retailers to develop a gamified virtual store for their e-commerce business. The virtual store is planned to be integrated with a casual game owned by us, and we intend to deliver native ads and coupons to both the virtual store and the integrated casual game. We believe that the launch of this product is critical, and such launch is expected to lead to significant growth of the Company, given the retailer’s reputation and existing large customer base. However, the virtual store may fail to launch due to our failure to deliver or the retailer prematurely terminating the agreement. We believe that any such failure to launch could have an adverse impact on our near-term growth prospects.

HotPlay’s Go-to-market (“GTM”) strategy and timeline dependent on ability to recruit key development roles in FY23.

The current timeline for commercial launch of the HotPlay IGA product is dependent on us filling several open senior positions within the HotPlay development team by the end of FY23, within the budget allocated to do so. Given the current global competitive climate for software developers and the rising costs associated with hiring these resources, amongst other things, there is a risk that we may not be able to recruit the necessary resources in the required timeframe to be able to deliver on the HotPlay revenue forecasts for FY23. If we are unable to do so, our operating results may suffer.

Zappware’s TVaaS service dependency on encoding hardware availability

Zappware’s TvaaS media platform is dependent on our ability to source the necessary encoding hardware for each new Telco Operator onboarded. The current global shortage of microchips is impacting the manufacturing, and as a result, the availability of this type of hardware for both PaaS and TVaaS providers globally. This could result in delays to the commercial launch of the TVaaS platform for each new client included in our revenue forecast, which in turn could negatively impact the revenues returned for the Zappware portion of the NextMedia business unit in FY23.

Risks Related to Our NextFinTech Business

Although Longroot is a licensed ICO Portal in Thailand, it has not yet closed any offerings, and there can be no assurances that it will.

Longroot recently received its license to serve as an ICO Portal in Thailand, and has not yet closed any offerings. There can be no assurances that Longroot will close any offerings in the near future, if ever, or if it does, that any such offerings will be profitable. If Longroot is engaged to provide any such services, it could face claims from any dissatisfied clients and could incur liabilities in rendering any such services, which could damage our reputation and adversely affect other parts of our business. This risk is exacerbated by the fact that our management has limited ICO, and may not successfully or efficiently manage Longroot, which is subject to significant regulatory oversight and reporting obligations under Thai securities laws.

Acceptance and/or widespread use of digital assets is uncertain.

Currently, there is a relatively small use of digital assets in the retail and commercial marketplace for goods or services. In comparison, there is a relatively large use by speculators contributing to price volatility. Furthermore, although security tokens are increasingly being adopted by institutions, these are still at a nascent stage. There is no guarantee that digital assets will gain widespread adoption and a lack of acceptance or decline in acceptances could have a material adverse effect on our NextFinTech business, prospects or operations.

Digital Asset exchanges and other trading venues are relatively new.

Digital asset market prices depend, directly or indirectly, on the prices set on exchanges and other trading venues, which are new and, in most cases, largely unregulated as compared to established, regulated exchanges for securities, commodities or currencies. When digital asset exchanges or other trading venues are involved in fraud or experience security failures or other operational issues, such events could result in a reduction in digital asset prices, impact the success of our NextFinTech business, and have a material adverse effect on our business, prospects and operations.


There are cyber security risks related to digital asset trading.

Trading platforms and third-party service providers may be vulnerable to hacking or other malicious activity. As with any computer code generally, flaws in digital asset codes may be exposed to such negative activities. Several errors and defects have been found previously, including those that disabled some functionality for users of digital asset trading platforms and exposed such users’ personal information. Flaws in and exploitations of the source code allowing malicious actors to take or create money have previously occurred. Any of the above events affecting us may adversely affect our operations and results of operations.

We depend on third party cryptographic and algorithmic protocols governing the issuance of and transactions in digital assets.

Digital assets issued by us depend on the infrastructure of third party cryptographic and algorithmic protocols. The growth of this industry in general, and the use of digital assets in particular, is subject to a high degree of uncertainty, and the slowing or stopping of the development or acceptance of developing protocols may occur and is unpredictable. Furthermore, the occurrence of security or cryptography issues might adversely affect our ability to payoperate in the industry.

Our tokens might be used for illegal or improper purposes, which could expose us to additional liability and harm our business.

Our tokens remain susceptible to potentially illegal or improper uses, as criminals are using increasingly sophisticated methods to engage in illegal activities involving internet services, such as money laundering, terrorist financing, drug trafficking, human trafficking, illegal online gaming, romance and other debts as they come due. Our failureonline scams, prohibited sales of pharmaceuticals, fraudulent sale of goods or services, piracy of software, movies, music and other copyrighted or trademarked goods, unauthorized uses of credit and debit cards or bank accounts and similar misconduct. Tokenholders may also encourage, promote, facilitate or instruct others to payengage in illegal activities. If the redemptions, when due,measures we have taken are too restrictive and inadvertently screen proper transactions, this could diminish customer experience which could harm our business.

The performance of digital assets is dependent on the performance of the issuer and underlying asset, which is inherently unpredictable and may result in defaults under our agreements with Streeterville. reputational damage should they underperform.

In connection withLongroot helps raise capital for issuers primarily via the Streeterville Secured Promissory Notes,sale of digital assets backed by an underlying business or asset. Prior to conducting the Company entered into a Security Agreement with Streeterville (the “Security Agreement”), pursuantactual fund raise, Longroot conducts extensive due diligence on the issuer and underlying business or asset to whichdetermine the obligationsfeasibility of the Company are secured by substantially all ofproject. However, there can be no assurances that the assets of the Company. As such, Streeterville may enforce its security interests over our assets and/or our subsidiaries which secure the repayment of such obligations, take control of our assets and operations, force us to seek bankruptcy protection or force us to curtail or abandon our current business plans and operations. If that were to happen, any investment in the Company could become worthless.


We are subject to requirements, penalties and damages under our agreements with Streeterville.

As described in greater detail above under “Item 1. Business—Recent Material Events—Streeterville Note Purchases”, we have entered into various agreements and promissory notes with Streeterville. In addition to the required redemptions discussed above, we may prepay all or any portion of the outstanding balance of the Streeterville notes at any time subject to a prepayment penalty equal to 10%digital asset will perform well, regardless of the amount of the outstanding balance to be prepaid. For so long as the Streeterville notes remain outstanding, the Company has agreed to pay to Streeterville 20%due diligence and other actions taken by Longroot. The performance of the gross proceeds that the Company receives from the sale of any of its common stock or preferred stock, towards each outstanding note, which percentage increases to 30% upon the occurrence of,digital asset after issuance depends on various factors, such as market conditions, management and continuance of, an event of default under each Streeterville note. Each time that we fail to pay an Equity Payment, the outstanding balanceperformance of the applicable Streeterville note automatically increases by 10%. Additionally,business or asset, and market acceptance. Many of these factors are beyond our control, and may result in the event we faildigital asset underperforming, leading to timely pay any such Equity Payment, Streetervillereputational damage, which may seek an injunction which would prevent us from issuing common or preferred stock until or unless we pay such Equity Payment. The November 2020 Streeterville Note provided that if anynegatively impact our ability to gain clients.

Developing NextBank into a comprehensive FinTech solution provider involves a high risk of complexity, may require substantial resources and costs, and is subject to obtaining regulatory approval.

NextBank is in the following events had not occurred on or before April 30, 2021,process of developing a range of products and technologies to support the then outstanding balance of the note (including accrueddigital asset industry, and unpaid interest) increases by an amount equalaims to 25% of the then-current outstanding balance thereof: (a) HotPlay must have become a wholly-owned subsidiary of the Company; (b) HotPlay must have raised at least $15,000,000 in cash through equity investments; (c) upon consummation of the HotPlay Share Exchange, all outstanding debt owed by the Company to HotPlay must have either been forgiven by HotPlay or converted into the Company’s common stock; (d) HotPlay must have become a co-borrower on the Streeterville note; and (e) the Company must have paid off certain liabilities which have been paid in full. As a result of the HotPlay Share Exchange not closing by April 30, 2021, Streeterville has advised us that we owe approximately an additional $1 million on the November 2020 Streeterville Note (representing 25% of the amount due thereunder as of April 30, 2021), pursuant to the stated termscomprehensive FinTech solution provider. The development of such note.

The March 2021 Streeterville Note has similar terms astechnologies involves a high level of complexity, requires sophisticated security implementations, and integration with third-party tools. Furthermore, the above as to Equity Paymentsimplementation and requires that if anylaunch of the following events have not occurred on or before June 30, 2021, the then outstanding balance of the note (including accrued and unpaid interest) increases by an amount equal to 25% of the then-current outstanding balance thereof: (a) HotPlay must have become a wholly-owned subsidiary of the Company; (b)  HotPlay must have raised at least $15,000,000 in cash or debt through equity investments; (c) upon consummation of the HotPlay Share Exchange, all outstanding debt owed by the Company to HotPlay must have either been forgiven by HotPlay or converted into the Company’s common stock; and (d) HotPlay must have become a co-borrower on the March 2021 Streeterville Note.

On June 1, 2021, Streeterville agreed to defer 50% of the April 2021 Note Increase which was otherwise to occur due to the Company’s failure to timely meet all of the November 2020 Note Transaction Conditions. As such, a total of $506,085 has been capitalized into the outstanding balance of the November 2020 Streeterville Note effective as of April 30, 2021, and the remaining $506,085 of the April 2021 Note Increase will only be added to the balance of the November 2020 Streeterville Note if the Company fails to meet the November 2020 Transaction Conditions by June 30, 2021. Separately, if the Company does not meet the March 2021 Note Transaction Conditions by June 30, 2021, the March 2021 Streeterville Note willcertain products may be subject to regulatory approvals from the June 2021 Note Increase.

Both Streeterville notes also include various other penalties, liquidated damages and triggers which increase the amount due, or the amountsOffice of the notes. Our failureCommission of Financial Institutions (“OCIF”) or regulators in other jurisdictions. We may not be able to comply withsuccessfully develop and/or implement the terms of the Streeterville notes or penalties thereunder,products, which may negatively affect our ability to generate revenue and could have a material adverse effect on our results of operations, cash flow,operations.


The NextBank mobile application development has, to date, been partially developed by Ukrainian developers, which has been impacted by the ongoing conflict between Ukraine and could resultRussia.

The NextBank mobile application development has, to date, been partially developed by Ukrainian developers. Since the beginning of the ongoing conflict between Ukraine and Russia, the rate of development by the affected developers has slowed down. We have since increased our development capacity by hiring developers in us havingother countries in order to pay significantly more fundsmitigate this concern. However, no assurances can be provided that we will be able to Streeterville and/or seeking bankruptcy protection.hire enough developers elsewhere to complete the development of our mobile application in accordance with our timeline, and given the uncertainty surrounding the ongoing conflict, there is still a risk that our development capacity may continue to be negatively affected while the conflict is ongoing.

Axion owes usNextBank’s ability to originate loans in subject to risk associated with economic and market conditions.

NextBank currently generates most of its revenue through the origination and subsequent sale of loans issued to real estate developers in the United States. Poor economic and market conditions, including a substantial amountpotential recession, may negatively impact market sentiment, decreasing the demand for housing development and purchases, which would adversely affect our operating income and results of money,operations. Although NextBank is currently planning to expand the paymentprofile of whichthe loan recipients to mitigate this risk, such actions may not fully mitigate the risk in times of economic downturn.

NextBank uses correspondent banks and is in default, andsubject to risk associated with termination of such relationships, which may not be timely repaid, if at all.negatively impact its operations.

PursuantNextBank currently relies on correspondent relationships with banks in the U.S. to clear transactions directly through the Axion Share Exchange, which closed on November 16, 2020,Federal Reserve System and provide services to a portion of our clients. We intend to further expand the Company acquired $7,657,024network of debt owed by Axion. Asbanks we have correspondent relationships with to provide a range of June 30, 2019,services such as multi-currency accounts. In such a relationship, the last datecorrespondent banks are liable for regulatory compliance of NextBank. There is a risk that publicly available informationcurrent and future correspondent banks may terminate the relationship due to regulatory concerns or simply for Axion is available, Axion had $2.5 million more liabilities than assets. The Axion debt acquired by the Company pursuant to the November 16, 2020 closing of the Axion Share Exchange is currently past due and has not been paid to date. Weconvenience. This may have to take legal action to enforce the repayment of such debt. Furthermore, Axion may not have sufficient cash to repay such debt. The debt is unsecured and as such, secured creditors of Axion may have priority rights to Axion’s assets in connection with any liquidation or bankruptcy. In the event the Axion debt is not paid and/or not paid in full, it could have a material adverse effect on our cash flows andlimit our ability to payprovide services to certain clients and could negatively impact our debtsoperating income.

Risks Related to Our NextTrip Business

If we are unable to introduce new or upgraded products, services or features that distributors, travelers or property owners and managers recognize as they become due. Any continued failure by Axionvaluable, we may fail to timely repay their debt obligations under the Axion debt acquired pursuantdrive additional travelers to the Axion Share Exchangewebsites of our distributors, drive additional travelers to our websites, retain existing property owners and managers, attract new property owners and managers, retain existing distributors, and/or attract new distributors. Our efforts to develop new and upgraded services and products could causerequire us to incur significant costs.

In order to attract travelers to our distributors, as well as our own online marketplace, while retaining, and attracting new, distributors, property owners and managers, we will need to continue to invest in the development of new products, services and features that both add value for travelers, distributors, property owners and managers and differentiate us from our competitors. The success of new products, services and features depends on several factors, including the timely completion, introduction and market acceptance of the product, service or feature. If travelers, distributors, property owners or managers do not recognize the value of our securitiesnew services or features, they may choose not to decline in valueutilize our products or become worthless.list on our online marketplace.

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IfThe development and delivery of new or upgraded products, services or features involves inherent hazards and difficulties, and is costly. Efforts to enhance and improve the ease of use, responsiveness, functionality and features of our existing websites have inherent risks, and we aremay not be able to complete software interfaces withmanage these product developments and enhancements successfully. We may not succeed in developing new or upgraded products, services or features or new or upgraded products, services or features may not work as intended or provide value. In addition, some new or upgraded products, services or features may be difficult for us to market and may also involve unfavorable pricing. Even if we succeed, we cannot guarantee that our property owners, managers and distributors, in a timely manner, our business is susceptible to shortfalls in revenues due to delays in remitting our ALRs to distributors and/or ALRs not being available for bookings or distribution.

The Company contracts with property owners and managers will respond favorably.

In addition to list their ALRsdeveloping our own improvements, we may choose to license or otherwise integrate applications, content and data from third parties. The introduction of these improvements imposes costs on the Company’s system. Those ALRs are being populated into the system through an application programming interface (API) from the property owner and/or manager to the Company. If the technology of the API is inadequate, erroneous or corrupted, the Company may incur delays in populating the ALRs into the Company’s system until the issues related to their API are corrected. These delays could cause delays in realizing revenues from bookings from those additional ALRs.

Also, the Company plans to provide its ALRs to distributors who will allow its customers to book those ALRs. The Company plans to make those ALRs available to distributors through its own API. If the technology of the distributor cannot write the correct program to request the ALRs from the Company’s operating system, the Company may incur delays in making the ALRs available to the distributor until the issues are resolvedus and the correct program is written by the distributor. These delays could cause delays in realizing revenues from bookings from those ALRs.

Our Shareholders Agreement with the founder of Reinhart provides for certain put rights, which if exercised by such founder, could require us to pay significant amounts of money.

On January 15, 2021, we entered intocreates a Shareholders’ Agreement with Jan C. Reinhart, the founder of Reinhart. Such Shareholders’ Agreement allows Mr. Reinhart to put his 49% ownership of Reinhart to us on certain dates from January 2024 to January 2026, as described above under “Item 1. Business—Recent Material Events—Reinhart Interactive TV AG Acquisition”. There is no cap on the required purchase price which would be payable to Mr. Reinhart, and such purchase price may be as high as 15 times EBITDA of Reinhart for the applicable periods. We may need to raise additional funding in the future to pay the put amount, and as such may need to seek additional debt or equity financing. Such additional financing may not be available on favorable terms, if at all. If debt financing is available and obtained, our interest expense may increase andrisk that we may be subjectunable to continue to access these technologies and content on commercially reasonable terms, or at all. In the riskevent we fail to develop new or upgraded products, services or features, the demand for our services and ultimately our results of default, depending on the terms of such financing. If equity financing is available and obtained it may result in our shareholders experiencing significant dilution. If such financing is unavailable, weoperations may be in breach of the terms of the put requirement, which could subject us to litigation, damages and penalties. The existence of the put right could make it harder for us to sell our interest in Reinhart, devalue such interest, or cause complex accounting issues which have a material adverse effect on our financial statements and results of operations.adversely affected.

 

If we are unable to attract and maintain a critical mass of ALR listings and travelers, whether due to competition or other factors, our travel marketplace will become less valuable to property owners and managers and to travelers, and it could significantly decrease our ability to generate revenue and net income from such travel division in the future.

We anticipate that moving forward, most of our travelNextTrip division revenue will be generated when ALRs are booked by either customers to our website or by customers to distributors we provide ALRs to (“Distributors”).to. Our travel revenue will be the difference between the funds received from our customers and distributors versus the net amount owed to the property owner/manager at the time of booking. Accordingly, theour success of our travel division primarily depends on our ability to attract owners, managers and travelers to NextTrip.com, NextTripVacations.com, Maupintour.com (soon to be rebranded as NextTrip Journeys) and to Distributors.distributors. If property owners and managers choose not to market their ALRs through our websites, or instead list them with a competitor, we may be unable to offer a sufficient supply and variety of ALRs to attract travelers to our websites. Similarly, our volume of new and renewal listings may suffer if we are unable to attract travelers to our websites or, to the Distributors.distributors. As a result of any of these events, the perceived usefulness of our online marketplace and the relationships with Distributorsdistributors may decline, and, consequently, it could significantly decrease our ability to generate travel revenue and net income in the future. As a result, the value of our securities may decline in value or become worthless.


We agreed to pay significant amounts to IDS, Inc. pursuant to the Property Purchase Agreement and related agreements.

Effective on May 18, 2021, the Company, IDS, TD Asset and Ari Daniels, the principal of IDS, entered into an Amendment to Intellectual Property Purchase Agreement (IP Purchase Amendment). Pursuant to the IP Purchase Agreement, the parties amended the IP Purchase Agreement, with the Company agreeing to make a payment to IDS in the amount of $2,850,000, payable by way of an initial payment of $500,000, and twelve monthly payments of approximately $195,833, with such monthly payments beginning 30 days after the initial payment, which is due seven days after the date of the IP Purchase Amendment, and has been paid to date. Such monthly payments may be pre-paid at any time without penalty. At the Company’s option, any portion of the amount due may be paid to IDS by a party separate from the Company (either a related party of Monaker or a third-party), for the benefit of Monaker, which shall be treated for all purposes as a payment by Monaker. As consideration for such Paying Party making such payment on behalf of Monaker, IDS agreed to transfer the Paying Party a number of the IDS Shares equal to the amount of the cash payment(s) made by a Paying Party multiplied by 0.6888 as to the first $500,000 payment (which payment has been made, but which shares have not been transferred to the Company to date), and 0.691 as to the monthly payments (as applicable, the “Applicable Portion” of the IDS Shares).

In the event the Company fails to make any payment timely, and the Company does not cure such default within seven days of written notice of default being provided by IDS, IDS is entitled to entry of a default judgment against the Company in the amount of the differential, if any, between the realized value of the IDS Shares upon the future sale thereof in the open market by IDS, and the unpaid amount of any payment due. In the event of any such default, IDS will be entitled to attorneys’ fees incurred to obtain said judgment.

Upon each payment of amounts due to IDS pursuant to the terms of the IP Agreement Amendment as discussed above by Monaker (instead of a Paying Party), IDS agreed to transfer the portion of the IDS Shares equal to the Applicable Portion, to the Company.

We may not have sufficient funds to pay the amounts due to IDS pursuant to the IP Agreement Amendment.

Our travel revenues and results of travel operations are subject to the ability of our distributors and partners to integrate our ALRs with their websites, and the timing of such integrations.

The integration of our ALRs with our distributorsdistributors’ and partners’ websites is complicated and may involve various software components and application program interfaces (APIs)(“APIs”). The ALR listings of our distributors and partners may be formatted differently or stored differently and may require modifications in order to receive and display our ALR properties correctly.

The timing of the integration of our distributors’ ability to access our ALR offerings stored in the Monakerour Booking Engine is significantly dependent on the ability of such distributors to implement processes, procedures and in some cases, software or systems to integrate with our API, which will enable them to list our ALRs on their websites. We have little to no control over those processes, or the timing of such integrations.

Our NextTrip division’s future travel revenues and results of travel operations are substantially dependent on the timing of those integrations and in some cases the willingness of our distributors and partners to undertake additional steps and processes in order to provide us what we need, and in the form that we need, to implement such integrations. The failure of our partners and/or distributors to undertake the actions required so that we can successfully integrate our offerings, and/or any delay in such integrations, may have a negative effect on our travel revenues and results of travel operations and cause the value of our common stock to decline in value.operations. The actions of our partners and distributors, and/or their ability to undertake such actions, may further be limited by the effects of COVID-19.

Our travel business will depend substantially on property ownersIf we are not able to maintain and managers renewing their listings.

Our travel business will depend substantially on property ownersenhance our NextTrip brand and managers renewing their listings. Significant declines in our listing renewals could harm our expected travel operating results. Property owners and managers will generally market their vacation rentals onthe brands associated with our websites, with no obligationour reputation and business may suffer.

It is important for us to renew. We may be unable to predict future listing renewal rates accurately,maintain and enhance our renewal rates may decline materially or fluctuate as a result of a number of factors. These factors include property owners’ decisions to sell or to cease renting their properties, their decisions to use the services of our competitors, or their dissatisfaction with our pricing, products, services or websites. Property owners and managers may not establish or renew listings if we cannot generate a large number of travelers who book vacation rentals through our marketplace and/or through our distributors. As a result, our revenue may decline and our results of operations may be negatively affected. In addition to the above, property owners may be unable (due to governmental restrictions) or unwilling (due to fear of contagion and other risks) to renew their listings due to COVID-19 and the governmental responses thereto.


If Distributors are unable to drive customers to their websites and/or we are unable to drive visitors to our websites, from search engines or otherwise, this could negatively impact transactions on the websites of our Distributor websites as well as our websites and consequently cause our travel revenue to decrease.

Many visitors find the Distributors and our websites by searching for vacation rental information through Internet search engines. A critical factor in attracting visitors to our websites, and those of our Distributors, is how prominently our Distributors and we are displayed in response to search queries. Accordingly, we utilize search engine marketing, or SEM, as a means to provide a significant portion of our visitor acquisition. SEM includes both paid visitor acquisition (on a cost-per-click basis) and unpaid visitor acquisition, which is often referred to as organic search.

We plan to employ search engine optimization, or SEO to acquire visitors. SEO involves developing our websitesbrand identity in order to rank highly in relevant search queries.attract and retain property owners, managers, distributors and travelers. The successful promotion of our brands will depend largely on our marketing and public relations efforts. We expect that the promotion of our brands will require us to make substantial investments, and, as our market becomes more competitive, these branding initiatives may become increasingly difficult and expensive. In addition, to SEM and SEO, we may also utilize other forms of marketing to drive visitors to our websites, including branded search, display advertising and email marketing.

The various search engine providers, such as Google and Bing, employ proprietary algorithms and other methods for determining which websites are displayed for a given search query and how highly websites rank. Search engine providers may change these methods in a way that may negatively affect the number of visitors to our Distributors’ websites as well as our own websites and may do so without public announcement or detailed explanation. Therefore, the success of our SEO and SEM strategy depends, in part, on our ability to anticipate and respond to such changes in a timely and effective manner.

In addition, websites must comply with search engine guidelines and policies. These guidelines and policies are complex and may change at any time. If we or our Distributors fail to follow such guidelines and policies properly, the search engine may cause our content to rank lower in search results or could remove the content altogether. If we or our Distributors fail to understand and comply with these guidelines and policies and ensure our websites’ compliance, our SEO and SEM strategy may not be successful.

If our Distributors or we are listed less prominently or fail to appear in search result listings for any reason, including as a result of our failure to successfully execute our SEO and SEM strategy, it is likely that we will acquire fewer visitors to our websites. Fewer visitors to our websites could lead to property owners and managers becoming dissatisfied with our websites, as well as fewer travelers inquiring and booking through our websites, either or both of which could adversely impact our revenue. We may not be able to replace thissuccessfully build our NextTrip brand identity without losing value associated with, or decreasing the effectiveness of, our other brand identities. If we do not successfully maintain and enhance our brands, we could lose traveler traffic, which could, in a cost-effective manner from other channels, such as cost-per-click SEMturn, cause property owners and managers to terminate or displayelect not to renew their listings with us. In addition, our brand promotion activities may not be successful or other advertising, or even at all. Any attemptmay not yield revenue sufficient to replace this traffic through other channels may increase our sales and marketing expenditures,offset their cost, which could adversely affect our reputation and business.


We may be subject to liability for the activities of our property owners and managers, which could harm our reputation and increase our operating costs.

We may receive complaints related to certain activities on our websites, including disputes over the authenticity of an ALR listing. We may be subject to claims of liability for unauthorized use of credit card and/or bank account information, identity theft, phishing attacks, potential breaches of system security, libel, and infringement of third-party copyrights, trademarks or other intellectual property rights. Fraud may be purported by owners or managers listing properties which either do not exist or are significantly not as described in the listing. The methods used by perpetrators of fraud constantly evolve and are complex. Moreover, our trust and security measures may not detect all fraudulent activity. Consequently, we expect to receive complaints from travelers and requests for reimbursement of their rental fees, as well as actual or threatened related legal action against us in the usual course of business.

We may also be subject to claims of liability based on events that occur during travelers’ stays at ALRs, including those related to robbery, injury, death, and other similar incidents. These types of claims could increase our operating costs and adversely affect our business and results of operations, even if these claims do not result in liability, as we incur costs related to investigation and defense. The available terms and conditions of our websites specifically state that we are exempt from any liability to travelers relating to these matters. However, the enforceability of these terms varies from jurisdiction to jurisdiction, and the laws in this area are consistently evolving. If we are subject to liability or claims of liability relating to the acts of our travel division.property owners or managers, or due to fraudulent listings, we may be subject to negative publicity, incur additional expenses and be subject to liability, any of which could harm our business and our operating results.

Regulatory Risks Relating to Our Operations

Our business is subject to complex and evolving U.S. and foreign laws and regulations regarding privacy, data protection, content, competition, and consumer protection. Many of these laws and regulations are subject to change and uncertain interpretation, and could result in claims, changes to our business practices, monetary penalties, increased cost of operations, or declines in user growth or engagement, or otherwise harm our business.

We are subject to a variety of laws and regulations in the United States and abroad that involve matters central to our business, including privacy, data protection and personal information, rights of publicity, content, intellectual property, advertising, marketing, distribution, data security, data retention and deletion, data localization and storage, data disclosure, electronic contracts and other communications, competition, consumer protection, product liability, telecommunications, e-commerce, taxation, economic or other trade prohibitions or sanctions, anti-corruption and political law compliance, securities law compliance, and online payment services. The introduction of new products, expansion of our activities in certain jurisdictions, or other actions that we may take may subject us to additional laws, regulations, or other government scrutiny. In addition, foreign data protection, privacy, content, competition, and other laws and regulations can impose different obligations or be more restrictive than those in the United States.

These U.S. federal and state and foreign laws and regulations, which in some cases can be enforced by private parties in addition to government entities, are constantly evolving and can be subject to significant change. As a result, the application, interpretation, and enforcement of these laws and regulations are often uncertain, particularly in the new and rapidly evolving industries in which we operate, and may be interpreted and applied inconsistently from country to country and inconsistently with our current policies and practices. Proposed or new legislation and regulations could also significantly affect our business. These laws and regulations, as well as any associated claims, inquiries, or investigations or any other government actions, may in the future lead to unfavorable outcomes including increased compliance costs, delays or impediments in the development of new products, negative publicity and reputational harm, increased operating costs, diversion of management time and attention, and remedies that harm our business, including fines or demands or orders that we modify or cease existing business practices.

Compliance with the E.U. General Data Protection Regulation (“GDPR”), Thailand’s Personal Data Protection Act (“PDPA”), the California Consumer Privacy Act (“CCPA”), and other regulatory and legislative privacy requirements will require significant operational resources and modifications to our business practices, and any compliance failures may have a material adverse effect on our business, reputation, and financial results.

We are engaged in ongoing privacy compliance and oversight efforts, including efforts to comply with the GDPR, the PDPA and other regulatory and legislative requirements around the world, including the CCPA. These compliance and oversight efforts will increase demand on our systems and resources, and will require significant investments, including investments in compliance processes, personnel, and technical infrastructure. Our privacy compliance and oversight efforts will require significant time and attention from management and our board of directors. In addition, regulatory and legislative privacy requirements are constantly evolving and can be subject to significant change and uncertain interpretation. If we are unable to successfully implement and comply with the mandates of the GDPR, the PDPA, CCPA, or other applicable regulatory or legislative requirements, or if we are found to be in violation of such requirements, we may be subject to regulatory or governmental investigations or lawsuits, which may result in significant monetary fines, judgments, or other penalties, and we may also be required to make additional changes to our business practices. Any of these events could have a material adverse effect on our business, reputation, and financial results.


 

Our processing, storage, use and disclosure of personal data will expose us to risks of internal or external security breaches and could give rise to liabilities as a result of governmental regulation, conflicting legal requirements or differing views of personal privacy rights.

We collect and use personally identifiable information in certain sectors of our business. The security of data when engaging in electronic commerce is essential in maintaining consumer and supplier confidence in our services. Substantial or ongoing security breaches whether instigated internally or externally on our systems or other internet-based systems could significantly harm our future business. It is possible that advances in computer circumvention capabilities, new discoveries or other developments, including our own acts or omissions, could result in a compromise or breach of customer transaction data.

There are risks of security breaches both on our own systems and on third party systems which store our information as we increase the types of technology that we use to operate our marketplace, such as mobile applications. We cannot guarantee that our, or our partners’, security measures will prevent security breaches or attacks. A party that is able to circumvent our security systems could misappropriate confidential or proprietary information, cause an interruption in our operations, damage our computers or those of our users, or otherwise damage our reputation and business. We may need to expend significant resources to protect against security breaches or to address problems caused by breaches, and reductions in website availability and response time could cause loss of substantial business volumes during the occurrence of any such incident. Security breaches could result in negative publicity, damage our reputation, expose us to risk of loss or litigation and possible liability and subject us to regulatory penalties and sanctions. Security breaches could also cause customers and potential customers to lose confidence in our security, which would have a negative effect on the value of our brand.

In our processing transactions, we expect to receive a large volume of personally identifiable data. We could be adversely affected if legislation or regulations are expanded to require changes in our business practices or if governing jurisdictions interpret or implement their legislation or regulations in ways that negatively affect our business, results of operations and financial condition.

Our business, products, and distribution are subject to increasing regulation in key territories. If we do not successfully respond to these regulations, our business could be negatively impacted.

The video game industry continues to evolve, and new and innovative business opportunities are often subject to new attempts at regulation. As such, legislation is continually being introduced, and litigation and regulatory enforcement actions are taking place, which may affect the way in which we, and other industry participants, may offer our content and features, and distribute and advertise products. These laws, regulations, and investigations are related to protection of minors, gambling, consumer privacy, accessibility, advertising, taxation, payments, intellectual property, distribution, and antitrust, among others.

For example, many foreign countries have laws that permit governmental entities to restrict or prohibit marketing or distribution of interactive entertainment software products because of the content therein (and similar legislation has been introduced from time to time at the federal and state levels in the United States, including legislation that attempts to impose additional taxes based on content). In addition, certain jurisdictions have laws that restrict or prohibit marketing or distribution of interactive entertainment software products with random digital item mechanics, or subject such products to additional regulation and oversight, such as reporting to regulators. Also, our games could in the future become subject to gambling-related rules and regulations and expose us to civil and criminal penalties. Further, the growth and development of electronic commerce and virtual items and currency may prompt calls for more stringent consumer protection laws that may impose additional burdens or limitations on operations of companies conducting business through the Internet and mobile devices. Also, existing laws or new laws regarding the marketing of in-app purchases, regulation of currency, banking institutions, unclaimed property, and money laundering may be interpreted to cover virtual currency or goods.

The adoption and enforcement of legislation that restricts the marketing, content, business model, or sales of our products in countries in which we do business may harm our sales, as the products they we offer to customers and the size of the potential audience for such products may be limited. We may be required to modify certain product development processes or products or alter marketing strategies to comply with regulations, which could be costly or delay the release of products. In addition, the laws and regulations affecting our products vary by territory and may be inconsistent with one another, imposing conflicting or uncertain restrictions. Failure to comply with any applicable legislation may also result in government-imposed fines or other penalties, as well as harm to our reputation.


Change in government regulations relating to the Internet could negatively impact our business.

We rely on consumers’ access to significant levels of Internet bandwidth for the digital delivery of our content and the functionality of our games with online features. Changes in laws or regulations that adversely affect the growth, popularity or use of the Internet, including laws impacting net neutrality, could impair our consumers’ online experiences, decrease the demand for our products and services or increase their cost of doing business. Given uncertainty around these rules relating to the Internet, including changing interpretations, amendments, or repeal of those rules, coupled with the potentially significant political and economic power of local Internet service providers and the level of Internet bandwidth access our products and services require, we could experience discriminatory or anti-competitive practices that could impede our growth, cause us to incur additional expenses, or otherwise negatively impact our business.

Regulatory changes or actions may restrict the use of digital assets in a manner that adversely affects our business, prospects or operations.

As digital assets have grown in both popularity and market size, governments around the world have reacted differently, with certain governments deeming them illegal while others have allowed their use and trade. Thailand, where our subsidiary Longroot Thailand is regulated, is the first country to approve a legal ICO portal for issuers. Under Thai SEC regulation, all digital asset issuance in Thailand must be approved by the Thai SEC and carried out via an approved ICO Portal such as ours. Governments may in the future take regulatory actions that prohibit or severely restrict the right to acquire, own, hold, sell, use or trade digital assets or to exchange digital assets for fiat currency. Similar actions by governments or regulatory bodies could impact our ability to continue to operate in the digital asset space and such actions could affect Longroot Thailand’s ability to continue as a going concern, which could have a material adverse effect on our business, prospects or operations.

In addition, the Thai SEC is authorized to take extraordinary actions in the event of a market emergency, including, for example, the retroactive implementation of speculative position limits or higher margin requirements, the establishment of daily price limits and the suspension of trading. The regulation of digital assets both inside and outside Thailand is a rapidly changing area of law and is subject to modification by government and judicial action. Digital assets also currently face an uncertain regulatory landscape in various jurisdictions. Various foreign jurisdictions may, in the near future, adopt laws, regulations or directives that affect digital assets and its users, particularly digital asset operators and service providers that fall within such jurisdictions’ regulatory scope. Such laws, regulations or directives may conflict with those of Thailand and may negatively impact the acceptance of digital assets by users, merchants and service providers outside of Thailand. The effect of any future domestic or foreign regulatory change on our digital assets related activities is unable to be predicted.

Furthermore, a large proportion of the digital assets we plan to issue are likely to be classified as securities. This will subject our digital asset activities to securities regulations in different jurisdictions, which could limit our business activities, such as restricting issuances to non-retail investors only. This may negatively impact our profitability. Furthermore, compliance with existing laws and regulations will involve significant amounts of time, including that of our management and dedicated compliance personnel, all of which might negatively impact our results of operations.

Regulatory changes or actions may alter the nature of the Company’s ownership of Longroot Thailand or restrict the use of cryptocurrencies in a manner that adversely affects Longroot Thailand’s business, prospects or operations.

As cryptocurrencies have grown in both popularity and market size, governments around the world have reacted differently to cryptocurrencies, with certain governments deeming them illegal while others have allowed their use and trade. Thailand, where Longroot Thailand is regulated, is the first country to approve a legal ICO portal for issuers. Under Thai SEC regulation, all crypto token issuances in Thailand must be approved by the Thai SEC and carried out via an approved ICO Portal such as Longroot Thailand. Governments may in the future take regulatory actions that prohibit or severely restrict the right to acquire, own, hold, sell, use or trade cryptocurrencies or to exchange cryptocurrencies for fiat currency. Similar actions by governments or regulatory bodies could impact the ability of Longroot Thailand to continue to operate and such actions could affect the ability of Longroot Thailand to continue as a going concern, which could have a material adverse effect on the business, prospects or operations of the Company.


Furthermore, tokens issued by Longroot Thailand may be classified as securities depending on the nature of the token and the regulatory frameworks of the respective jurisdictions. Longroot Thailand’s activities may be subject to securities regulations in different jurisdictions, which could limit its business activity, such as limits on the personnel it can issue tokens to, and this may negatively impact Longroot Thailand’s profitability. In addition, compliance with existing laws and regulations, will involve significant amounts of time, including that of Longroot Thailand’s senior leaders and that of dedicated compliance personnel, all of which might negatively impact Longroot Thailand’s results of operations.

Next Bank is subject to various regulatory capital requirements. Regulatory changes or actions may alter the requirement of the capital.

Under capital adequacy guidelines, we must meet specific capital guidelines that involve quantitative measures of our assets, liabilities, and certain off-balance sheet items calculated under regulatory accounting practices. Our capital amounts and classification are also subject to qualitative components, risk weightings and other factors. Quantitative measures established by regulation to ensure capital adequacy require us to maintain minimum amounts and ratios of common equity; (i) Tier 1 capital to risk-weighted assets, and (ii) Tier 1 capital to average assets.

NextBank faces risk of non-compliance and enforcement actions related to Bank Secrecy Act and other anti-money laundering, customer due diligence, and combating the financing of terrorism statues and regulations.

NextBank is regulated by OCIF and has to comply with strict regulations including Bank Secrecy Act, and anti-money laundering (“AML”), customer due diligence (“CDD”), and combating the financing of terrorism (“CTF”). Although NextBank uses its best efforts to keep up to date with regulatory requirements and implements strict internal policies to maintain compliance, there is a risk of non-compliance. If NextBank fails to comply with such regulations, it may face enforcement actions from one or more of the regulators that enforce such regulations, which may result in fines, penalties, or even the revocation of our license, and could have a material negative impact on our results of operations.

Unfavorable changes in, or interpretations of, government regulations or taxation of the evolving alternative lodging rental (ALR),ALRs, Internet and e-commerce industries could harm our travel division operating results.

We have contracted for ALRs in markets throughout the world, in jurisdictions which have various regulatory and taxation requirements that can affect our travel division operations or regulate the rental activity of property owners and managers.

Compliance with laws and regulations of different jurisdictions imposing different standards and requirements is very burdensome because each region has different regulations with respect to licensing and other requirements for ALRs. Our online marketplaces are accessible by property owners, managers and travelers in many states and foreign jurisdictions. Our efficiencies and economies of scale depend on generally uniform treatment of property owners, managers and travelers across all jurisdictions. Compliance requirements that vary significantly from jurisdiction to jurisdiction impose added costs and increased liabilities for compliance deficiencies. In addition, laws or regulations that may harm our business could be adopted, or interpreted in a manner that affects our activities, including but not limited to the regulation of personal and consumer information and real estate licensing requirements. Violations or new interpretations of these laws or regulations may result in penalties, negatively impact our operations and damage our reputation and business.


In addition, regulatory developments may affect the ALR industry and the ability of companies like us to list those vacation rentals online. For example, some municipalities have adopted ordinances that limit the ability of property owners and managers to rent certain properties for fewer than 30 consecutive days and other cities may introduce similar regulations. Some cities also have fair housing or other laws governing whether and how properties may be rented, which they assert apply to ALR. Many homeowners, condominium and neighborhood associations have adopted rules that prohibit or restrict short-term vacation rentals. In addition, many of the fundamental statutes and regulations that impose taxes or other obligations on travel and lodging companies were established before the growth of the Internet and e-commerce, which creates a risk of these laws being used in ways not originally intended, that could burden property owners and managers or otherwise harm our business. These and other similar new and newly interpreted regulations could increase costs for, or otherwise discourage, owners and managers from listing their property with us, which could harm our business and operating results.


 

From time

We are subject to time, we may become involved in challenges to, or disputes with government agencies regarding, these regulations. We may not be successful in defending against the application of theseanti-bribery, anti-corruption and similar laws and regulations. Further, if we were required to complynon-compliance with regulations and government requests that negatively impact our relations with property owners, managers and travelers, our business, travel division operations and financial resultssuch laws could be adversely impacted.

Additionally, new, changed, or newly interpreted or applied tax laws, statutes, rules, regulations or ordinances could increase our property owners’ and managers’ and our compliance, operating and other costs. This, in turn, could deter property owners and managers from renting their ALR properties, negatively affect our new listings and renewals, or increase costs of doing business. Any or all of these events could adversely impact our business and financial performance.

Furthermore, as we expand or change the products and services that we offer or the methods by which we offer them, we may become subject to additional legal regulations, tax requirements or other risks. Regulators may seek to impose regulations and requirements on us even if we utilize third parties to offer the products or services. These regulations and requirements may apply to payment processing, insurance products or the various other products and services we may now or in the future offer or facilitate through our marketplace. Whether we comply with or challenge these additional regulations, our costs may increase and our business may otherwise be harmed. 

If we are not able to maintain and enhance our NextTrip brand and the brands associated with each of our websites, our reputation and business may suffer.

It is important for us to maintaincriminal penalties or significant fines and enhance our brand identity in order to attract and retain property owners, managers, distributors and travelers. The successful promotion of our brands will depend largely on our marketing and public relations efforts. We expect that the promotion of our brands will require us to make substantial investments, and, as our market becomes more competitive, these branding initiatives may become increasingly difficult and expensive. In addition, we may not be able to successfully build our NextTrip brand identity without losing value associated with, or decreasing the effectiveness of, our other brand identities. If we do not successfully maintain and enhance our brands, we could lose traveler traffic, which could, in turn, cause property owners and managers to terminate or elect not to renew their listings with us. In addition, our brand promotion activities may not be successful or may not yield revenue sufficient to offset their cost, which could adversely affect our reputation and business.


Our long-term success depends, in part, on our ability to expand our property owner, manager and traveler bases outside of the United States and, as a result, our business is susceptible to risks associated with international operations.

We have limited operating and e-commerce experience in many foreign jurisdictions and are making significant investments to build our international operations. We plan to continue our efforts to expand globally, including acquiring international businesses and conducting business in jurisdictions where we do not currently operate. Managing a global organization is difficult, time consuming and expensive and any international expansion efforts that we undertake may not be profitable in the near or long term or otherwise be successful. In addition, conducting international operations subjects us to risks that include:

the cost and resources required to localize our services, which requires the translation of our websites and their adaptation for local practices and legal and regulatory requirements;

adjusting the products and services we provide in foreign jurisdictions, as needed, to better address the needs of local owners, managers, distributors and travelers, and the threats of local competitors;

being subject to foreign laws and regulations, including those laws governing Internet activities, email messaging, collection and use of personal information, ownership of intellectual property, taxation and other activities important to our online business practices, which may be less developed, less predictable, more restrictive, and less familiar, and which may adversely affect financial results in certain regions;

competition with companies that understand the local market better than we do or who have pre-existing relationships with property owners, managers, distributors and travelers in those markets;

legal uncertainty regarding our liability for the transactions and content on our websites, including online bookings, property listings and other content provided by property owners and managers, including uncertainty resulting from unique local laws or a lack of clear precedent of applicable law;

lack of familiarity with and the burden of complying with a wide variety of other foreign laws, legal standards and foreign regulatory requirements, including invoicing, data collection and storage, financial reporting and tax compliance requirements, which are subject to unexpected changes;

laws and business practices that favor local competitors or prohibit or limit foreign ownership of certain businesses;

challenges associated with joint venture relationships and minority investments;

adapting to variations in foreign payment forms;
difficulties in managing and staffing international operations and establishing or maintaining operational efficiencies;

difficulties in establishing and maintaining adequate internal controls and security over our data and systems;

currency exchange restrictions and fluctuations in currency exchange rates;

potentially adverse tax consequences, which may be difficult to predict, including the complexities of foreign value added tax systems and restrictions on the repatriation of earnings;

increased financial accounting and reporting burdens and complexities and difficulties in implementing and maintaining adequate internal controls;

political, social and economic instability abroad, war, terrorist attacks and security concerns in general;
the potential failure of financial institutions internationally;

varying effects of global pandemics and epidemics, including COVID-19 on different countries;
reduced or varied protection for intellectual property rights in some countries; and

higher telecommunications and Internet service provider costs.

Operating in international markets also requires significant management attention and financial resources. We cannot guarantee that our international expansion efforts in any or multiple territories will be successful. The investment and additional resources required to establish operations and manage growth in other countries may not produce desired levels of revenue or profitability and could instead result in increased costs.

The market in which we participate is highly competitive, and we may be unable to compete successfully with our current or future competitors.

The market to provide listing, search and marketing services for the ALR industry is very competitive and highly fragmented. In addition, the barriers to entry are low and new competitors may enter. All of the services that we plan to provide to property owners, managers and travelers, including listing and search, are provided separately or in combination by current or potential competitors. Our competitors may adopt aspects of our business model, which could reduce our ability to differentiate our services. Additionally, current or new competitors may introduce new business models or services that we may need to adopt or otherwise adapt to in order to compete, which could reduce our ability to differentiate our business or services from those of our competitors. Furthermore, properties in the ALR industry are not typically marketed exclusively through any single channel, and our listing agreements are not typically exclusive. Accordingly, our competitors could aggregate a set of listings similar to ours. Increased competition could result in a reduction in revenue, rate of new listing acquisition, existing listings or market share.


There are thousands of vacation rental listing websites that compete directly with us for listings, travelers, or both, such as Booking.com, HomeAway.com, Airbnb, and TripAdvisor. Many of these competitors offer free or heavily discounted listings or focus on a particular geographic location or a specific type of rental property. Some of them also aggregate property listings obtained through various sources, including the websites of property managers some of whom will also market their properties on our websites.

Competitors also operate websites directed at the wider fragmented travel lodging market, such as Airbnb and HomeAway by listing either rooms or the owner’s primary home. These properties increase both the number of rental opportunities available to travelers and the competition for the attention of the traveler. Some vacation rental property owners and managers also list on these websites, and consequently, these companies currently compete with us to some extent.

We will also compete with online travel agency websites, such as Expedia, Hotels.com, Kayak, Priceline, Booking.com, Orbitz and Travelocity, which have traditionally provided comprehensive travel services and some of whom are now expanding into the vacation rental category. We also compete with large Internet search companies, such as craigslist, eBay, Google, MSN.com and Yahoo!, which provide listing or advertising services in addition to a wide variety of other products or services. In addition, some competitors, such as Perfect Places, Inc., Atraveo and eDomizil, predominately serve the professional property manager marketplace, and therefore have the ability to create more products and features targeted to property managers. Hotels, corporate travel providers, travel metasearch engines, travel content aggregators, mobile platform travel applications, social media websites, and even mobile computing hardware providers all also have the potential to increase their competitive presence in the areas of our business as well.

We believe we will compete primarily on the basis of the quantity and quality of our listings, the quality of the direct relationships we have with distributors, property owners and managers, the volume of expected travelers who will visit our websites, the global diversity of the vacation rentals available on our websites, the quality of our websites, the tools provided to our distributors, property owners and managers to assist them with their business, customer service, brand identity, the success of our marketing programs, and price. If current or potential property owners, managers, distributors or travelers choose to use any of these competitive offerings in lieu of ours, our revenue could decrease and we could be required to make additional expenditures to compete more effectively. Any of these events or results could harm our travel division business, operating results and financial condition.

In addition, most of our current or potential competitors are larger and have more resources than we do. Many of our current and potential competitors enjoy substantial competitive advantages, such as greater name recognition in their markets, longer operating histories and larger marketing budgets, as well as substantially greater financial, technical and other resources. In addition, our current or potential competitors may have access to larger property owner, manager or traveler bases. As a result, our competitors may be able to respond more quickly and effectively than we can to new or changing opportunities, technologies, standards or owner, manager or traveler requirements, including, but not limited to those associated with the COVID-19 pandemic. Furthermore, because of these advantages, existing and potential owners, managers, distributors and travelers might accept our competitors’ offerings, even if they may be inferior to ours. For all of these reasons, we may not be able to compete successfully against our current and future competitors.

If the businesses and/or assets that we have acquired or invested in do not perform as expected or we are unable to effectively integrate acquired businesses, our operating results and prospects could be harmed.

We have four platforms, a library of travel footage, equity investments in Verus International, Inc, NestBuilder.com, Bettwork Industries Inc, Recruiter.com Group, Inc., Longroot Thailand, Reinhart, and our acquisition of control of IFEB and HotPlay, which are pending, subject to required approvals and closing conditions. The businesses we have acquired, or invested in, may not perform as well as we expect. Failure to manage and successfully integrate acquired businesses and technologies could harm our operating results and our prospects. If the companies we have invested in do not perform well, our investments could become impaired and our financial results could be negatively impacted. 


Our future mergers and acquisitions, if any, will involve numerous risks, including the following:

difficulties in integrating and managing the combined operations, technologies, technology platforms and products of the acquired companies and realizing the anticipated economic, operational and other benefits in a timely manner, which could result in substantial costs and delays or other operational, technical or financial problems;

legal or regulatory challenges or post-acquisition litigation, which could result in significant costs or require changes to the businesses or unwinding of the transaction;

failure of the acquired company or assets to achieve anticipated revenue, earnings or cash flow;

diversion of management’s attention or other resources from our existing business;

our inability to maintain key distributors and business relationships, and the reputations of acquired businesses;

uncertainty resulting from entering markets in which we have limited or no prior experience or in which competitors have stronger market positions;

our dependence on unfamiliar affiliates and partners of acquired businesses;

unanticipated costs associated with pursuing acquisitions;

liabilities of acquired businesses, which may not be disclosed to us or which may exceed our estimates, including liabilities relating to non-compliance with applicable laws and regulations, such as data protection and privacy controls;

difficulties in assigning or transferring to us or our subsidiaries intellectual property licensed to companies we acquired;
difficulties in maintaining our internal standards, controls, procedures and policies including financial reporting requirements of the Sarbanes-Oxley Act of 2002 and extending these controls to acquired companies;

potential loss of key employees of the acquired companies;

difficulties in complying with antitrust and other government regulations;

challenges in integrating and auditing the financial statements of acquired companies that have not historically prepared financial statements in accordance with U.S. generally accepted accounting principles; and

potential accounting charges to the extent intangibles recorded in connection with an acquisition, such as goodwill, trademarks, customer relationships or intellectual property, are later determined to be impaired and written down in value.

Moreover, we rely heavily on the representations and warranties provided to us by the sellers of acquired companies and assets, including as they relate to creation, ownership and rights in intellectual property, existence of open-source software and compliance with laws and contractual requirements. If any of these representations and warranties are inaccurate or breached, such inaccuracy or breach could result in costly litigation and assessment of liability for which there may not be adequate recourse against such sellers, in part due to contractual time limitations and limitations of liability.

If we are unable to introduce new or upgraded products, services or features that distributors, travelers or property owners and managers recognize as valuable, we may fail to (i) drive additional travelers to the websites of our distributors, (ii) drive additional travelers to our websites, (iii) retain existing property owners and managers, (iv) attract new property owners and managers, (v) retain existing distributors, and/or (vi) attract new distributors. Our efforts to develop new and upgraded services and products could require us to incur significant costs.

In order to attract travelers to (i) our distributors, as well as (ii) our own online marketplace while retaining, and attracting new, distributors, property owners and managers, we will need to continue to invest in the development of new products, services and features that both add value for travelers, distributors, property owners and managers and differentiate us from our competitors. The success of new products, services and features depends on several factors, including the timely completion, introduction and market acceptance of the product, service or feature. If travelers, distributors, property owners or managers do not recognize the value of our new services or features, they may choose not to utilize our products or list on our online marketplace.


Attempting to develop and deliver these new or upgraded products, services or features involves inherent hazards and difficulties, and is costly. Efforts to enhance and improve the ease of use, responsiveness, functionality and features of our existing websites have inherent risks, and we may not be able to manage these product developments and enhancements successfully. We may not succeed in developing new or upgraded products, services or features or new or upgraded products, services or features may not work as intended or provide value. In addition, some new or upgraded products, services or features may be difficult for us to market and may also involve unfavorable pricing. Even if we succeed, we cannot guarantee that our property owners and managers will respond favorably.

In addition to developing our own improvements, we may choose to license or otherwise integrate applications, content and data from third parties. The introduction of these improvements imposes costs on us and creates a risk that we may be unable to continue to access these technologies and content on commercially reasonable terms, or at all. In the event we fail to develop new or upgraded products, services or features, the demand for our services and ultimately our results of operations may be adversely affected.

We have a relatively limited operating history and we operate in a rapidly evolving industry, which makes it difficult to evaluate our current business and future prospects. If we fail to predict the manner in which our business will perform or how the market will develop, our business and prospects may suffer materially.

Our limited operating history, together with our rapidly changing industry, may make it difficult to evaluate our current business and our future prospects. We have encountered, and will continue to encounter, risks and difficulties frequently experienced by growing companies in rapidly changing industries. These include challenges in accurate financial planning and forecasting as we develop new products or strategic plans with little or no historical reference as a basis for such planning and forecasting. These risks will be exacerbated by the effects and extent of the COVID-19 pandemic and the duration thereof. Our business and prospects should be considered in light of the risks and difficulties we may encounter as a company operating in a highly competitive environment where changes to our business, plans, and products may be required to respond to such changes.

In addition, the market for online ALRs is relatively new and, in many territories, is unproven with little data or research available regarding the market and industry. It is uncertain whether the ALR market in many territories will continue to develop or if our services will achieve and sustain a level of demand and market acceptance sufficient for us to generate revenue, net income and cash flow growth, at anticipated levels or at all; we may need to focus on, or offer, different types of products and services in order to remain competitive. Our success will depend, to a substantial extent, on the willingness of property owners and managers to use commercial online rental property listing services. Some property managers have developed (and use) their own proprietary online listing services and, therefore, may be reluctant or unwilling to use our services to market their properties. Furthermore, some travelers and property owners and managers may be reluctant or unwilling to use online listing services because of concerns regarding the security of data, the potential for fraudulent activity, including phishing, or the integrity of the online marketplace. If property owners and managers do not perceive the benefits of marketing their properties online, then our market may not develop as we expect, or it may develop more slowly than we expect, either of which could significantly harm our business and operating results. Moreover, our success will depend on travelers’ usereputation.

We are subject to anti-bribery and similar laws, such as the U.S. Foreign Corrupt Practices Act of our distributors,1977, as well as our own, online marketplace to search, locateamended, the U.S. domestic bribery statute contained in 18 U.S.C. § 201, the USA PATRIOT Act, U.S. Travel Act, the U.K. Bribery Act 2010 and rent vacation rentals,Proceeds of Crime Act 2002, and possibly other anti-corruption, anti-bribery and anti-money laundering laws in countries in which will depend on their willingness to use the Internetwe conduct business. Anti-corruption laws have been enforced with great rigor in recent years and are interpreted broadly. Such laws prohibit companies and their beliefemployees and their agents from making or offering improper payments or other benefits to government officials and others in the integrityprivate sector. Noncompliance with these laws could subject us to investigations, sanctions, settlements, prosecution, other enforcement actions, disgorgement of the websites. In addition, since we operate in unprovenprofits, significant fines, damages, other civil and unstudied markets, we have limited insight into trends that may develop in those markets and may affect our business. We may make errors in predicting and reacting to other relevant business trends, which could harm our business.

We are exposed to fluctuations in currency exchange rates.

Because we plan to conduct a significant portion of our business outside the United States but report our results in U.S. dollars, we face exposure to adverse movements in currency exchange rates, which may cause our revenue and operating results to differ materiallycriminal penalties or injunctions, suspension and/or debarment from expectations. In addition, fluctuation in our mix of U.S. and foreign currency denominated transactions may contribute to this effect as exchange rates vary. Moreover, as a result of these exchange rate fluctuations, revenue, cost of revenue, operating expenses and other operating results may differ materially from expectations when translated from the local currency into U.S. dollars upon consolidation. For example, if the U.S. dollar strengthens relative to foreign currencies our non-U.S. revenue would be adversely affected when translated into U.S. dollars. Conversely, a decline in the U.S. dollar relative to foreign currencies would increase our non-U.S. revenue when translated into U.S. dollars. We may enter into hedging arrangements in order to manage foreign currency exposure but such activity may not completely eliminate fluctuations in our operating results. 


Our business depends on retaining and attracting capable management and operating personnel.

Our success depends in large part on our ability to attract and retain high-quality management and operating personnel, as well as skilled technical and marketing personnel, who are in high demand and are often subject to competing offers. Competition for qualified employees is intense in our industry, andcontracting with specified persons, the loss of even a few qualified employees, or an inability to attract, retain and motivate additional highly skilled employees required for the planned expansion of our business couldexport privileges, reputational harm, our operating results and impair our ability to grow. To attract and retain key personnel, we use various measures, including an equity incentive program and incentive bonuses for executive officersadverse media coverage, and other key employees. While we attempt to provide additional or different incentive compensation tools to mitigate this impact, the measures we employ to attract and maintain key personnel may not be effective enough to enable us to attract and retain the personnel we require to operate our business effectively.

If we lose the services of our key personnel, including Mr. William Kerby, our Chief Executive Officer, our business would be materially and adversely affected. Furthermore, we do not have “key person” life insurance, and we do not presently intend to purchase such insurance, on Mr. Kerby or any of our other key personnel. We believe that our success is substantially dependent upon: (1) our ability to retain and motivate our senior management team and other key employees; and (2) our ability to identify, attract, hire, train, retain and motivate other qualified personnel. The development of our business and operations is dependent upon the efforts and talents of our executive officers, whose extensive experience and contacts within the industries in which we wish to compete are a critical component of our business strategy. We may not be successful in retaining the services of any of the members of our senior management team or other key personnel, or in hiring qualified technical, managerial, marketing and administrative personnel. If we do not succeed in retaining our employees and in attracting new employees, our business could suffer significantly.

The employment agreements of our officers include limited non-solicitation and non-compete provisions and provide for severance pay upon termination of such agreements for certain reasons.

We are party to employment agreements with our Chief Executive Officer, William Kerby, our Chief Financial Officer, Sirapop “Kent” Taepakdee, and our Chief Operating Officer and Chief Information Officer, Timothy Sikora.

Mr. Kerby’s employment agreement remains in effect indefinitely until either party provides the other at least 30 days prior written notice of its intent to terminate the agreement, or until terminated pursuant to the terms of the agreement. The agreement includes a non-compete provision, prohibiting Mr. Kerby from competing against the Company during the term of the agreement and for a period of 12 months after termination thereof (subject to certain exceptions), in any state or country in connection with (A) the offer of ALR properties (Vacation Home Rentals) which are distributed on a B2B Basis; (B) the commercial sale of specialty products sold by the Company during the six (6) months preceding the termination date; and (C) any services the Company commercially offered during the six (6) months prior to the termination date (collectively, the “Non-Compete”).

In the event of termination of the agreement for death or disability, or termination by Mr. Kerby without good reason (defined in the agreement), or for cause (defined in the agreement) by the Company, Mr. Kerby is due all consideration due and payable to him through the date of termination. In the event of termination of the agreement by Mr. Kerby for good reason or the Company for any reason other than cause (or if Mr. Kerby’s employment is terminated other than for cause within six (6) months before or twenty-four (24) months following the occurrence of a change of control (defined in the agreement) of the Company, provided that we believe the closing of the HotPlay Exchange Agreement will be deemed a change of control under the agreement), Mr. Kerby is due all consideration due and payable through the date of termination; a lump sum payment equal to twelve (12) months of base salary; continued participation in all benefit plans and programs of the Company for twelve (12) months after termination (or at the option of the Company, reimbursement of COBRA insurance premiums for substantially similar coverage as the Company’s plans); and the Non-Compete will not apply to Mr. Kerby.


Mr. Taepakdee, our Chief Financial Officer, entered into an employment agreement, dated January 30, 2020. If the agreement is terminated by Mr. Taepakdee for good reason (as defined in the agreement) or by the Company without cause, and other than due to Mr. Taepakdee’s death or disability, Mr. Taepakdee is due two calendar months of severance pay. If the agreement is terminated due to Mr. Taepakdee’s disability, Mr. Taepakdee is due compensation through the remainder of the month during which such termination is effective. If the Company terminates the agreement within 24 months after a change in control event, then the Company is required to pay Mr. Taepakdee a severance payment equal to twelve (12) months’ salary, plus continue to provide benefits equal to those provided prior to the change in control event for a period of six (6) months (we believe the closing of the HotPlay exchange agreement will be deemed a change of control under the agreement). The agreement includes a one-year non-solicitation and non-competition clause following the date of the termination of the agreement, which non-competition clause prohibits him (without the prior written consent of the Company which consent will not be unreasonably withheld) from directly or through another person or another entity carrying on or being engaged in any business within North America which is competitive with the business of the Company, however, the non-compete shall terminate in the event of a termination of employment by Mr. Taepakdee for good reason or a termination by the Company other than for cause or disability.

Mr. Sikora, our Chief Operating Officer and Chief Information Officer, entered into an employment agreement, dated January 30, 2020. If the agreement is terminated by Mr. Sikora for good reason (as defined in the agreement) or by the Company without cause, and other than due to Mr. Sikora’s death or disability, Mr. Sikora is due two calendar months of severance pay. If the agreement is terminated due to Mr. Sikora’s disability, Mr. Sikora is due compensation through the remainder of the month during which such termination is effective. If the Company terminates the agreement within 24 months after a change in control event, then the Company shall pay Mr. Sikora a severance payment equal to twelve (12) months’ salary, plus continue to provide benefits equal to those provided prior to the change in control event for a period of six (6) months (we believe the closing of the HotPlay exchange agreement will be deemed a change of control under the agreement). The agreement includes a one-year non-solicitation and non-competition clause following the date of the termination of the agreement, which non-competition clause prohibits him (without the prior written consent of the Company which consent will not be unreasonably withheld) from directly or through another person or another entity carrying on or being engaged in any business within North America which is competitive with the business of the Company, however, the non-compete shall terminate in the event of a termination of employment by Mr. Sikora for good reason or a termination by the Company other than for cause or disability.

The automatic renewal feature of Mr. Kerby’s agreement may prevent us from terminating the employment of such officer, and the non-solicitation and non-compete provisions of the agreements with the executive officers may not provide us adequate protection from such persons competing with us after their termination, and the severance pay payable to such individuals may make it costly to terminate the employment of such individuals, make us less attractive for potential acquirers or prevent a change of control.

We agreed to pay certain fees to Mr. William Kerby, our Chief Executive Officer in consideration for such individual guarantying and continuing to guarantee, certain of our obligations.

Pursuant to Mr. Kerby’s employment agreement, as additional consideration for Mr. Kerby having entered into numerous personal guarantees with the Airline Reporting Commission, sellers of travel services, merchant providers, financial institutions, associations and service providers on behalf of the Company, the Company agreed that, for as long as Mr. Kerby is employed by the Company, provides services under the employment agreement and is willing to continue to support the Company in connection with such guarantees, he will receive a $2,000 per month guarantee fee. In the event Mr. Kerby resigns for good reason (defined in the employment agreement), or his employment is terminated by the Company, the Company agreed to eliminate any and all guarantees within thirty (30) days, failing which, for each month the guarantees remain in place, the monthly guarantee fee will rise to $10,000 per month, until such time as the Company has assumed or terminated all such guarantees.

The aggregate of such guaranty fees may be significant and may reduce the amount of available funding available for the Company to undertake its operations, repay its liabilitiescollateral consequences. Any investigations, actions and/or expand its operations. In the event the guaranty fees rise as described above, the Company may not have available funds to pay such fees, and the amount of such fees may further reduce the amount of cash the Company has for business activities and growth. The amount of such guaranty fees may reduce the trading value of the Company’s common stock and/or have a material adverse effect on the Company’s available cash and results of operations. 


If we fail to protect confidential information against security breaches, or if distributors, property owners, managers or travelers are reluctant to use our online marketplace because of privacy or security concerns, we might face additional costs, and activity on our websites could decline.

We collect and use personally identifiable information of distributors, property owners, managers and travelers in the operation of our business. Our systems may be vulnerable to computer viruses or physical or electronic break-ins that our security measures may not detect. Anyone that is able to circumvent our security measures could misappropriate confidential or proprietary information, cause an interruption in our operations, damage our computers or those of our users, or otherwise damage our reputation and business. We may need to expend significant resources to protect against security breaches or to address problems caused by breaches. Security breaches of our systems, or even the systems of third parties we rely upon, such as credit card processors, could damage our reputation and expose us to litigation and possible liability under various laws and regulations. In addition, industry-wide incidents, or incidents specific to us, could deter people from using our distributors’, as well as our online marketplaces. Concern among distributors, property owners, managers and travelers regarding our use of personal information collected on our websites could keep them from using, or continuing to use, our online marketplace.

There are risks of security breaches both on our own systems and on third party systems which store our information as we increase the types of technology that we use to operate our marketplace, such as mobile applications. New and evolving technology systems and platforms may involve security risks that are difficult to predict and adequately guard against. In addition, third parties that process credit card transactions between us and property owners and managers maintain personal information collected from them. Such information could be stolen or misappropriated, and we could be subject to liability as a result. Further, property owners and managers may develop a lack of confidence in these third parties or in their ability to securely conduct credit card transactions on our distributors’ websites, our websites or the Internet in general, which could adversely impact our business, revenue and operating results. Our property owners, managers and travelers may be harmed by such breaches and we may in turn be subject to costly litigation or regulatory compliance costs, and harm to our reputation and brand. Moreover, some property owners, managers and travelers may cease using our marketplace altogether. 

The laws of some states and countries require businesses that maintain personal information about their residents in electronic databases to implement reasonable measures to keep that information secure. Our practice is to encrypt all sensitive information, but we do not know whether our current practice will be challenged under these laws. In addition, under certain of these laws, if there is a breach of our computer systems and we know or suspect that unencrypted personal data has been stolen, we are required to inform any user whose data was stolen, which could harm our reputation and business. Complying with the applicable notice requirements in the event of a security breach could result in significant costs. We may also be subject to contractual claims, investigation and penalties by regulatory authorities, and claims by persons whose information was disclosed.

Compounding these legal risks, many states and countries have enacted different and often contradictory requirements for protecting personal information collected and maintained electronically. Compliance with these numerous and contradictory requirements is particularly difficult for us because we collect personal information from users in multiple jurisdictions. While we intend to comply fully with these laws, failure to comply could result in legal liability, cause us to suffer adverse publicity and lose business, traffic and revenue. If we were required to pay any significant amount of money in satisfaction of claims under these or similar laws, or if we were forced to cease our business operations for any length of time as a result of our inability to comply fully, our business, operating results and financial condition could be adversely affected.

In addition, third parties may target users of our websites directly with attempts to breach the security of their email accounts or management systems, such as through phishing attacks, which are fraudulent identity theft schemes designed to appear as legitimate emails from us or from our property owners and managers. Criminals may also employ other schemes aimed at defrauding our property owners, managers or travelers in ways that we may not anticipate or be able to adequately guard against. Although phishing attacks and other fraud schemes are generally not carried out through our systems, victims may nevertheless seek recovery from us. As a result, we may be required to defend ourselves in costly litigation and may suffer harm to our reputation, brand and business.


In the event any of the above risks were to occur, our reputation could be harmed, we and/or our distributors could lose either website traffic or users, and as a result, our results of operations and the value of our securities could be adversely affected.

If we are unable to adapt to changes in technology, our business could be harmed.

Because property owners, managers and travelers can access our websites using a variety of hardware and software platforms, we will need to continuously modify and enhance our service to keep pace with related technological changes. We may not be successful in developing necessary, functional and popular modifications and enhancements. Furthermore, uncertainties about the timing and nature of these necessary changes could result in unplanned research and development expenses. In addition, any failure of our online marketplace to operate effectively with future technologies could result in dissatisfaction from travelers, distributors, property owners, and managers, any of which could harm our travel division business.

We may be subject to liability for the activities of our property owners and managers, which could harm our reputation and increase our operating costs.

We may receive complaints related to certain activities on our websites, including disputes over the authenticity of an ALR listing. We may be subject to claims of liability for unauthorized use of credit card and/or bank account information, identity theft, phishing attacks, potential breaches of system security, libel, and infringement of third-party copyrights, trademarks or other intellectual property rights. Fraud may be purported by owners or managers listing properties which either do not exist or are significantly not as described in the listing. The methods used by perpetrators of fraud constantly evolve and are complex. Moreover, our trust and security measures may not detect all fraudulent activity. Consequently, we expect to receive complaints from travelers and requests for reimbursement of their rental fees, as well as actual or threatened related legal action against us in the usual course of business.

We may also be subject to claims of liability based on events that occur during travelers’ stays at ALRs, including those related to robbery, injury, death, and other similar incidents. These types of claims could increase our operating costs and adversely affect our business and results of operations, even if these claims do not result in liability, as we incur costs related to investigation and defense. The available terms and conditions of our websites specifically state that we are exempt from any liability to travelers relating to these matters. However, the enforceability of these terms varies from jurisdiction to jurisdiction, and the laws in this area are consistently evolving. If we are subject to liability or claims of liability relating to the acts of our property owners or managers, or due to fraudulent listings, we may be subject to negative publicity, incur additional expenses and be subject to liability, any of which could harm our business and our operating results.

Loss or material modification of our credit card acceptance privilegessanctions could have a material adverse effect on our travel division business and operating results. Credit card acceptance privileges involve additional potential costs relating to reimbursements and fraud.

The loss of our credit card acceptance privileges could significantly limit the availability and desirability of our products and services. Moreover, if we fail to fully perform our contractual obligations, we could be obligated to reimburse credit card companies for refunded payments that have been contested by the cardholders. In addition, even when we are in compliance with these obligations, we bear other expenses including those related to the acceptance of fraudulent credit cards. As a result of all of these risks, credit card companies may require us to set aside additional cash reserves, may increase the transaction fees they charge us, or may even refuse to renew our acceptance privileges.

In addition, credit card networks, such as Visa, MasterCard and American Express, have adopted rules and regulations that apply to all merchants who process and accept credit cards and include the Payment Card Industry Data Security Standards, or the PCI DSS. Under these rules, we are required to adopt and implement internal controls over the use, storage and security of card data. We assess our compliance with the PCI DSS rules on a periodic basis and make necessary improvements to our internal controls. Failure to comply may subject us to fines, penalties, damages and civil liability and could prevent us from processing or accepting credit cards. However, we cannot guarantee that compliance with these rules will prevent illegal or improper use of our payment systems or the theft, loss or misuse of the credit card data.


The loss of, or the significant modification of, the terms under which we obtain credit card acceptance privileges could have a material adverse effect on our travel division business, revenue and operating results.

Our travel division revenue, expenses and operating results could be negatively affected by changes in travel, real estate and ALR markets, as well as general economic conditions.

Our travel division business is particularly sensitive to trends in the travel, real estate and vacation rental markets, which are unpredictable, as well as trends in the general economy. Therefore, our travel division operating results, to the extent they reflect changes in the broader travel, real estate and vacation rental industries, may be subject to significant fluctuations. For example, changes in the travel industry, such as disruptions caused by war, terrorist attacks, pandemics and epidemics (including the recent changes caused by COVID-19), natural disasters, weather, bankruptcies or diseases could significantly reduce the willingness of potential travelers to plan vacation and other travel. Such disruptions that harm or destroy vacation homes could cause the property owners and managers of such homes to cancel or fail to renew their listings. Downturns in real estate markets may result in decreased new building rates and increases in foreclosures, which could also result in fewer vacation rentals available for listing. Also, since vacation travel is generally dependent on discretionary spending, negative general economic conditions could significantly reduce the overall amount that travelers spend on vacation travel.

Additionally, property owners may choose or be forced to sell their vacation rentals during periods of economic slowdown or recession. Any or all of these factors could reduce the demand for vacation rentals and our services, thereby reducing our revenue. This in turn could increase our need to make significant expenditures to continue to attract distributors, property owners, managers and travelers to our websites. 

Vacation rentals are often located in popular vacation destinations around the world and utilized on a seasonal basis. Factors influencing the desirability of vacation rentals in a particular region or season could adversely affect our ability to obtain new listings and retain existing listings.

ALRs are often located in popular vacation destinations and utilized on a seasonal basis. As a result, our listings involve properties that are often concentrated in particular regions, and our revenue is dependent upon our ability (or willingness) to list properties in those regions. If we became unable (or unwilling) to list properties in a particular region, our listings in the region could decline or cease to grow, and revenue and results of operations could be adversely impacted. Notwithstanding the above, adverse economic conditions, or pandemics, including COVID-19, could result in future seasonal patterns that are different from historical trends.

In addition, factors influencing the desirability of ALRs in a particular region or during a specific season could adversely affect our ability to obtain new listings and retain existing listings. A significant natural disaster, political turmoil, pandemic, epidemic or other regional disturbance could reduce the number of available vacation rentals in that area, reducing our listing base and our revenue. In addition, if we do not have sufficient property listings in a newly popular vacation destination, we could fail to attract travelers; consequently, property owners and managers may opt to list their properties with a competitor having a greater presence in that area.

As described above, the global travel industry has experienced sharp declines in demand as a result of COVID-19 and the ultimate effects and longevity of such decreased demand is currently not known; however, such decrease in demand is expected to have a material adverse effect on our fiscal 2022 revenues and results of operations.

We could face liability for transactions and information on (or accessible through) our or, our distributors’, online marketplaces.

A significant portion of the information available through our and our distributors’ online marketplaces is submitted by property owners and managers and third parties. Property owners and managers could assert that information concerning them on our websites contains errors or omissions and third parties could seek damages from us for losses incurred if they rely upon such incorrect information. We could also be subject to claims that such information is defamatory, libelous, or infringes on third-party copyrights and privacy and publicity rights. We might be subject to claims that by providing links to third party websites, we are liable for wrongful actions by those third parties. Even if these claims do not result in liability to us, we could incur significant costs in investigating and defending against these claims.


In addition, our services will feature a property review platform, which allows travelers to post property reviews and other information about properties, property owners and managers. Although this feedback is generated by users and not by us, claims of libel, defamation or other injury have been made against other Internet service providers offering similar forums and may be made against us for content posted in this forum. Our potential liability for this information could require us to expend substantial resources to reduce our liability exposure and may limit the attractiveness of our and our distributors’ online marketplace. Moreover, our general liability insurance may not cover all potential claims to which we are exposed and may not be adequate to indemnify us for all liability that may be imposed and as a result we could face significant liability for such claims which could have a material adverse effect on our cash flows.

Property owner, distributor, manager or traveler complaints or negative publicity about our company, our services or our business activities could diminish use of our online marketplace and our travel division brand.

Property owner, distributor, manager or traveler complaints or negative publicity about our company, our services or our business activities could severely diminish consumer confidence in and use of our online marketplace and negatively affect our travel division brand. Our measures to combat risks of fraud and breaches of privacy and security can damage relations with our property owners and managers, for instance when we remove listings which have repeatedly been reported as misleadingly described. These measures heighten the need for prompt and accurate customer service to resolve irregularities and disputes. Effective customer service requires significant personnel expense, and this expense, if not managed properly, could significantly impact our profitability. Failure to manage or train our customer service representatives properly could compromise our ability to handle property owner, manager and traveler complaints effectively. If we do not handle these complaints effectively, our reputation may suffer, and we may lose the confidence of property owners, distributors, managers and travelers. We may also be the subject of blog or forum postings that include inaccurate statements and create negative publicity. As a result of these complaints or negative publicity, property owners, distributors and managers may discontinue their listing or services with us or travelers may discontinue their use of our websites, and our business, brand and results of operations could be adversely impacted.

We currently rely on a small number of third-party service providers to host and deliver a significant portion of our services, and any interruptions or delays in services from these third parties could impair the delivery of our services and harm our business.

We rely on third-party service providers for numerous products and services, including payment processing services, data center services, web hosting services, insurance products for customers and travelers and some customer service functions. We rely on these companies to provide uninterrupted services and to provide their services in accordance with all applicable laws, rules and regulations.

We use a combination of third-party data centers to host our websites and core services. We do not control the operation of any of the third-party data center facilities we use. These facilities may be subject to break-ins, computer viruses, denial-of-service attacks, sabotage, acts of vandalism and other misconduct. They are also vulnerable to damage or interruption from power loss, telecommunications failures, fires, floods, earthquakes, hurricanes, tornadoes and similar events. We currently do not have a comprehensive disaster recovery plan in place nor do our systems provide complete redundancy of data storage or processing. As a result, the occurrence of any of these events, a decision by our third-party service providers to close their data center facilities without adequate notice or other unanticipated problems could result in loss of data as well as a significant interruption in our services and harm to our reputation and brand. Additionally, our third-party data center facility agreements are of limited durations, and our third-party data center facilities have no obligation to renew their agreements with us on commercially reasonable terms, or at all. If we are unable to renew our agreements with these facilities on commercially reasonable terms, we may experience delays in the provisioning of our services until an agreement with another data center facility can be arranged. This shift to alternate data centers could take more than 24 hours depending on the nature of the event. 


Furthermore, we depend on continuous and uninterrupted access to the Internet through third-party bandwidth providers to operate our business. If we lose the services of one or more of our bandwidth providers for any reason or if their services are disrupted, we could experience disruption in our services or we could be required to retain the services of a replacement bandwidth provider, which could harm our business and reputation.

Our operations are dependent on the availability of electricity, which also comes from third-party providers. If we or the third-party data center facilities that we use to deliver our services were to experience a major power outage, it could result in disruption of our services and harm to our business.

If these companies experience difficulties and are not able to provide services in a reliable and secure manner, if they do not operate in compliance with applicable laws, rules and regulations and, with respect to payment and card processing companies, if they are unable to effectively combat the use of fraudulent payments on our websites, our results of operations and financial positions could be materially and adversely affected. In addition, if such third-party service providers were to cease operations or face other business disruption either temporarily or permanently, or otherwise face serious performance problems, we could suffer increased costs and delays until we find or develop an equivalent replacement, any of which could have an adverse impact on our business, and financial performance.

Our processing, storage, use and disclosure of personal data will expose us to risks of internal or external security breaches and could give rise to liabilities as a result of governmental regulation, conflicting legal requirements or differing views of personal privacy rights.

The security of data when engaging in electronic commerce is essential in maintaining consumer and supplier confidence in our services. Substantial or ongoing security breaches whether instigated internally or externally on our systems or other internet-based systems could significantly harm our future business. It is possible that advances in computer circumvention capabilities, new discoveries or other developments, including our own acts or omissions, could result in a compromise or breach of customer transaction data.

We cannot guarantee that our security measures will prevent security breaches or attacks. A party (whether internal, external, an affiliate or unrelated third party) that is able to circumvent our security systems could steal customer information or transaction data, proprietary information or cause significant interruptions in our operations. For instance, from time to time, companies have experienced “denial-of-service” type attacks that have made portions of websites slow or unavailable for periods of time. We may need to expend significant resources to protect against security breaches or to address problems caused by breaches, and reductions in website availability and response time could cause loss of substantial business volumes during the occurrence of any such incident. Security breaches could result in negative publicity, damage our reputation, expose us to risk of loss or litigation and possible liability and subject us to regulatory penalties and sanctions. Security breaches could also cause customers and potential customers to lose confidence in our security, which would have a negative effect on the value of our brand.

We also face risks associated with security breaches affecting third parties conducting business over the Internet. Consumers generally are concerned with security and privacy on the Internet, and any publicized security problems could inhibit the growth of the Internet and, therefore, our services as a means of conducting commercial transactions. Additionally, security breaches at third parties such as supplier or distributor systems upon which we may rely could result in negative publicity, damage our reputation, expose us to risk of loss or litigation and possible liability and subject us to regulatory penalties and sanctions.

In our processing transactions, we expect to receive a large volume of personally identifiable data but, we will not store personally identifiable data. We could be adversely affected if legislation or regulations are expanded to require changes in our business practices or if governing jurisdictions interpret or implement their legislation or regulations in ways that negatively affect our business, results of operations and financial condition.

If we fail to maintain effective internal controls, it could adversely affect our financial position and lower our stock price.

We are subject to reporting and other obligations under the Exchange Act, including the requirements of the Sarbanes-Oxley Act. These provisions require annual management assessments of the effectiveness of our internal controls over financial reporting. We also operate in a complex environment and expect these obligations, together with our rapid growth and expansion through acquisitions, to place significant demands on our management and administrative resources, including accounting and tax resources. If we are unable to conclude that our internal control over financial reporting is effective, our investors could lose confidence in the accuracy and completeness of our financial reports.


We have significant indebtedness, which could adversely affect our business and financial condition.

Risks relating to our indebtedness include:

increasing our vulnerability to general adverse economic and industry conditions;

requiring us to dedicate a portion of our cash flow from operations to principal and interest payments on our indebtedness, thereby reducing the availability of cash flow to fund working capital, capital expenditures, acquisitions and investments and other general corporate purposes;

making it more difficult for us to optimally capitalize and manage the cash flow for our businesses;

limiting our flexibility in planning for, or reacting to, changes in our businesses and the markets in which we operate;

possibly placing us at a competitive disadvantage compared to our competitors that have less debt; and

limiting our ability to borrow additional funds or to borrow funds at rates or on other terms that we find acceptable.

Risks Relating to The Share Exchanges

The number of shares of common stock issuable pursuant to the HotPlay Share Exchange and in connection with the Axion Preferred Conversion will cause significant dilution to existing stockholders and a change of control of the Company.

Pursuant to the HotPlay Share Exchange, following the completion of the HotPlay Share Exchange and at the time the outstanding shares of the Company’s Series B Convertible Preferred Stock and Series C Convertible Preferred Stock automatically converts into common stock of the Company (anticipated to occur five days after the closing of the HotPlay Share Exchange), the current HotPlay securityholders are expected to own approximately 60.0% of the aggregate outstanding shares of common stock of Monaker, and the Axion Stockholders and Axion Creditors are expected to own approximately 13.0% of the aggregate outstanding common stock of Monaker (without taking into account shares of common stock issuable upon exercise of the Creditor Warrants), with the Monaker stockholders prior to the effective date of the closing and conversion holding approximately 27.1% of the aggregate outstanding common stock of the combined company (without taking into account shares of common stock issuable upon exercise of the Creditor Warrants). As a result, the total shares of common stock issuable upon closing of the HotPlay Share Exchange and in connection with the Axion Preferred Conversion will cause significant dilution to existing stockholders, and result in a change of control.

The Company has not yet been transferred the shares of Axion acquired pursuant to the closing of the Axion Share Exchange into its name.

Although the Axion Share Exchange closed on November 16, 2020, the Company has yet to formally complete the transfer of the ownership of the Axion shares into its name, due to a Cease Trade Order issued by the British Columbia Securities Commission, which impacts Axion, and the Company may choose to not formally complete such transfer, but to instead obtain the contractual rights to vote and receive the economic rights to such shares, until such time as such shares can be formally transferred. In the event the transfer of the Axion shares is not approved, or delayed, the Company may be unable to take title to such shares, which could have adverse effects on the Company’s accounting for such acquisition and may ultimately prevent the Company from recognizing the value of such shares. For example, as of February 28, 2021, the Company has accounted for its 33.85% interest in Axion as an investment in affiliate, valued at the aggregate liquidation preference of the Series B Convertible Preferred Stock issued in consideration for such shares of Axion, as ownership of such Axion shares have not yet been formally transferred to the Company. The Company may also be prohibited by the Cease Trade Order issued by the British Columbia Securities Commission to obtain the contractual rights to vote and receive the economic rights to the shares, and as such, may not be able to obtain the full value of such shares or account for such shares to their greatest value in the Company’s financial statements moving forward. Currently the Company has no written agreements with the holders of the Axion shares acquired; however, the Company believes that such stockholders would, at the request of the Company, agree to vote such shares as requested by the Company from time to time.


Combining HotPlay and the Company may be more difficult, costly or time-consuming than expected and the Company may fail to realize the anticipated benefits of the HotPlay Share Exchange, including expected financial and operating performance of the combined company.

The success of the HotPlay Share Exchange will depend, in part, on the combined company’s ability to realize anticipated cost savings from combining the businesses of the Company and HotPlay. To realize the anticipated benefits and cost savings from the HotPlay Share Exchange, the Company and HotPlay must successfully integrate and combine their businesses in a manner that permits those cost savings to be realized. If the Company and HotPlay are not able to successfully achieve these objectives, the anticipated benefits of the HotPlay Share Exchange may not be realized fully or at all or may take longer to realize than expected. In addition, the actual cost savings of the HotPlay Share Exchange could be less than anticipated.

The Company and HotPlay have operated and, until the completion of the HotPlay Share Exchange, must continue to operate independently. It is possible that the integration process could result in the loss of key employees, the disruption of our ongoing businesses or inconsistencies in standards, controls, procedures and policies that adversely affect our ability to maintain relationships with customers, suppliers and employees or to achieve the anticipated benefits and cost savings of the HotPlay Share Exchange. Integration efforts between the two companies may also divert management attention and resources. These integration matters could have an adverse effect on each of the Company and HotPlay during this transition period and for an undetermined period after completion of the HotPlay Share Exchange on the combined company.

The combined company may be unable to retain Company and/or HotPlay personnel successfully after the HotPlay Share Exchange is completed.

The success of the HotPlay Share Exchange will depend in part on the combined company’s ability to retain the talents and dedication of key employees currently employed by the Company and HotPlay. It is possible that these employees may decide not to remain with the Company or HotPlay, as applicable, while the HotPlay Share Exchange is pending, or with the combined company after the HotPlay Share Exchange is consummated. If key employees terminate their employment, the combined company’s business activities may be adversely affected and management’s attention may be diverted from successfully integrating the Company and HotPlay to hiring suitable replacements, all of which may cause the combined company’s business to suffer. In addition, the Company and HotPlay may not be able to locate or retain suitable replacements for any key employees who leave either company.

The consummation of the HotPlay Share Exchange will result in a change of control of the Company.

Due to the significant number of shares issuable at the closing of the HotPlay Share Exchange (i.e., 52,000,000 shares of Monaker common stock (currently representing approximately 60.0% of the shares of common stock which will be outstanding at closing, based on Monaker’s current outstanding shares)), a change of control of the Company will be deemed to have occurred, and the owners of HotPlay prior to the HotPlay Share Exchange will obtain control of the Company (both as to the board of directors and voting control over the Company). Additionally, the HotPlay Exchange Agreement requires all but three of our current directors to resign and the appointment of four new directors, which are to be nominated by the principal stockholder of HotPlay, and such principal stockholder and Monaker are required to mutually agree on a seventh, eight and nineth director who will be independent, unless otherwise agreed by the parties (one of which is currently anticipated to be one of Monaker’s current directors). Additionally, the new stockholders obtaining shares in the HotPlay Share Exchange will exercise control in determining the outcome of all corporate transactions or other matters, including the election and removal of directors, mergers, consolidations, the sale of all or substantially all of our assets, and also the power to prevent or cause a further change in control. Any investors who purchase shares or hold shares prior to the HotPlay Share Exchange will be minority stockholders and as such will have little to no say in the direction of the Company and the election of directors. Additionally, it will be difficult if not impossible for investors to remove the directors appointed by the prior owners of HotPlay, which will mean they will remain in control of who serves as officers of the Company as well as whether any changes are made in the board of directors. An owner of the Company’s securities should keep in mind that your shares, and your voting of such shares, will likely have little effect on the outcome of corporate decisions.


Upon the closing of the HotPlay Share Exchange we plan to transition the majority of our business operations to those of HotPlay.

While we plan to continue to operate in the travel industry, and through Longroot and our other ventures, following the closing of the HotPlay Share Exchange, we anticipate that the more significant portion of our assets and operations will be related to in-game advertising. We have no experience operating as an in-game advertising company and our operations in such industry will be subject to all of the risks of any new business in a new industry. Our change in business structure may not be successful. Additionally, such new controlling stockholders, directors and officers may not be able to properly manage our new direction. If our new management fails to properly manage and direct our operations, we may be forced to scale back or abandon our operations, which may cause the value of our common stock to decline or become worthless.

We will be subject to business uncertainties and contractual restrictions while the HotPlay Share Exchange is pending.

Uncertainty about the effect of the HotPlay Share Exchange on employees and partners may have an adverse effect on us. These uncertainties may impair our ability to attract, retain and motivate key personnel until the HotPlay Share Exchange is completed, and could cause partners and others that deal with us to seek to change existing business relationships, cease doing business with us or cause potential new partners to delay doing business with us until the HotPlay Share Exchange has been successfully completed or terminated. Retention of certain employees may be challenging during the pendency of the HotPlay Share Exchange, as certain employees may experience uncertainty about their future roles or compensation structure. If key employees depart because of issues relating to the uncertainty and difficulty of integration or a desire not to remain with the business, our business following the HotPlay Share Exchange could be negatively impacted. In addition, the HotPlay Share Exchange restricts us from making certain acquisitions and taking other specified actions until the HotPlay Share Exchange is completed without certain consents and approvals. These restrictions may prevent us from pursuing attractive business opportunities that may arise prior to the completion of the HotPlay Share Exchange.

The HotPlay Share Exchange limits our ability to pursue alternatives to the HotPlay Share Exchange.

The HotPlay Share Exchange contains provisions that could adversely impact competing proposals to acquire us. These provisions include the prohibition on us generally from soliciting any acquisition proposal or offer for a competing transaction. These provisions might discourage a third party that might have an interest in acquiring all or a significant part of our company from considering or proposing an acquisition, even if that party were prepared to pay consideration with a higher value than the current proposed consideration payable pursuant to the HotPlay Share Exchange.

The HotPlay Exchange Agreement may be terminated in accordance with its terms and the HotPlay Share Exchange may not be completed.

The HotPlay Exchange Agreement is subject to several conditions that must be fulfilled in order to complete the HotPlay Share Exchange. These conditions to the closing of the HotPlay Share Exchange may not be fulfilled and, accordingly, the HotPlay Share Exchange may not be completed. In addition, the parties to the HotPlay Exchange Agreement can generally terminate such agreement if the transactions contemplated thereby do not close by May 31, 2021, under certain other conditions if the terms of the HotPlay Share Exchange are breached, and the parties can mutually decide to terminate the HotPlay Exchange Agreement at any time. In addition, the Company and the counterparties to the HotPlay Exchange Agreement may elect to terminate the HotPlay Exchange Agreement in certain other circumstances. The parties are fully committed to closing the HotPlay Share Exchange and the Company expects to extend the May 31, 2021 date, or otherwise continue to work together with HotPlay and the HotPlay Stockholders to close the HotPlay Share Exchange, following the date of this Report.


Litigation could prevent or delay the closing of the HotPlay Share Exchange or otherwise negatively impact the business and operations of the Company.

The Company may incur costs in connection with the defense or settlement of any stockholder lawsuits filed in connection with the HotPlay Share Exchange. Such litigation could have an adverse effect on the financial condition and results of operations of the Company and could prevent or delay the consummation of the HotPlay Share Exchange. Such litigation, affecting HotPlay and/or the HotPlay Stockholders, could delay or prevent the closing of the HotPlay Share Exchange.

Certain of the Company’s warrant holders will need to approve the HotPlay Share Exchange or agree to modify such warrants, or such warrant holders will have the right to require the Company to repurchase such warrants upon the closing of the HotPlay Share Exchange.

Certain of the Company’s outstanding warrants agreements include provisions which allow such holders the right, following a fundamental transaction, such as the HotPlay Share Exchange, to require the Company to repurchase such securities at their Black Scholes values, which repurchase amounts may be significant and may be several times more than the exercise prices of such warrants, even if they are out-of-the-money. As a result, in the event such warrant holders do not consent to the HotPlay Share Exchange, exercise their warrants prior to the date of closing of the HotPlay Share Exchange, or otherwise agree to modify such warrants, the Company may be forced to expend significant resources repurchasing such warrants and the funding for such repurchases may not be available on favorable terms, if at all, and/or such conditions and requirements may ultimately prevent the HotPlay Share Exchange from closing.

Termination of the HotPlay Share Exchange could negatively impact the Company.

In the event the HotPlay Share Exchange is terminated, our business may have been adversely impacted by our failure to pursue other beneficial opportunities due to the focus of management on the HotPlay Share Exchange, and the market price of our common stock might decline to the extent that the current market price reflects a market assumption that the HotPlay Share Exchange will be completed. If the HotPlay Share Exchange is terminated and our board of directors seeks another acquisition or business combination, our stockholders cannot be certain that we will be able to find a party willing to offer equivalent or more attractive consideration than the consideration provided for by the HotPlay Share Exchange.

The combined company is required to re-meet the initial listing standards of The NASDAQ Capital Market in order to close the HotPlay Share Exchange.

The closing of the HotPlay Share Exchange requires that the Company requalify for initial listing on The NASDAQ Capital Market, pursuant to the applicable guidance and requirements of NASDAQ as of the date of the closing of the HotPlay Share Exchange. The NASDAQ Capital Market initial listing standards include more stringent requirements than The NASDAQ Capital Market continued listing standards. The NASDAQ Capital Market initial listing standards require that issuers meeting one of the following tests: (1) $750,000 of pre-tax income (in either the last fiscal year or two of the three most recent years), $5 million of public float, $4 million of stockholders’ equity and a minimum closing price of $3 per share; (2) $15 million of public float, $5 million of stockholders’ equity, a $3 per share price and 2 years of operating history; or (3) a $50 million market cap; $15 million of public float, $4 million of stockholders’ equity, and a $2 per share price, plus in each case 300 round lot stockholders and 1,000,000 shares of total public float, with at least half of such required number of round lot stockholders holding unregistered securities with a minimum value of $2,500.

While we believe that we will meet the initial listing requirements of NASDAQ following the closing of the HotPlay Share Exchange, if we cannot, we will not be able to close the HotPlay Share Exchange as currently contemplated.

operations.


Failure to complete the HotPlay Share Exchange could negatively impact our stock price and future business and financial results.

If the HotPlay Share Exchange is not completed, our ongoing business may be adversely affected and we would be subject to a number of risks, including the following:

●           we will not realize the benefits expected from the HotPlay Share Exchange, including a potentially enhanced competitive and financial position, expansion of assets and therefore opportunities, and will instead be subject to all the risks we currently face as an independent company;

●           we may experience negative reactions from the financial markets and our partners and employees;

●           the HotPlay Share Exchange places certain restrictions on the conduct of our business prior to the completion of the HotPlay Share Exchange or the termination of the HotPlay Share Exchange. Such restrictions, the waiver of which is subject to the consent of the counterparties to such agreement, may prevent us from making certain acquisitions, taking certain other specified actions or otherwise pursuing business opportunities during the pendency of the HotPlay Share Exchange; and

●           matters relating to the HotPlay Share Exchange (including integration planning) may require substantial commitments of time and resources by our management, which would otherwise have been devoted to other opportunities that may have been beneficial to us as an independent company.

Significant costs are expected to be incurred in connection with the consummation of the HotPlay Share Exchange and integration of the Company and HotPlay into a single business, including legal, accounting, financial advisory and other costs.

If the HotPlay Share Exchange is consummated, the Company and HotPlay expect to incur significant costs in connection with integrating their operations and personnel. These costs may include costs for:

●      employee redeployment, relocation or severance;

●      integration of information systems; and

●      reorganization or closures of facilities.

In addition, the Company and HotPlay expect to incur a number of non-recurring costs associated with combining the operations of the two companies, which cannot be estimated accurately at this time. The Company and HotPlay will also incur transaction fees and other costs related to the HotPlay Share Exchange. Additional unanticipated costs may be incurred in the integration of the businesses of the Company and HotPlay. Although the Company and HotPlay expect that the elimination of duplicative costs, as well as the realization of other efficiencies related to the integration of the businesses, may offset incremental transaction and transaction-related costs over time, this net benefit may not be achieved in the near term, or at all. There can be no assurance that the Company and HotPlay will be successful in these integration efforts.

The conversion of the HotPlay Notes into common stock pursuant to their terms, will cause immediate and substantial dilution.

In certain situations, the HotPlay Notes automatically convert into common stock of the Company at a conversion price of $2.00 per share. If converted in full as of the date of this Report, without taking into account accrued interest, which also converts into common stock at a conversion price of $2.00 per share, HotPlay would be issued an aggregate of 7,500,000 shares of common stock (subject to the NASDAQ Limitation). Such issuance would result in immediate and substantial dilution to the interests of other stockholders.


Risks Relating to Longroot Thailand

Cryptocurrency exchanges and other trading venues are relatively new.

When cryptocurrency exchanges or other trading venues are involved in fraud or experience security failures or other operational issues, such events could result in a reduction in cryptocurrency prices, impact the success of Longroot Thailand and have a material adverse effect on the ability of Longroot Thailand to continue as a going concern, which correspondingly could harm the business, prospects and operations of the Company. Cryptocurrency market prices depend, directly or indirectly, on the prices set on exchanges and other trading venues, which are new and, in most cases, largely unregulated as compared to established, regulated exchanges for securities, commodities or currencies. In the event Longroot Thailand faces fraud, security failures, operational issues or similar events, such factors would have a material adverse effect on the ability of Longroot Thailand to continue as a going concern, which could have a material adverse effect on the business, prospects or operations of Longroot Thailand.

Longroot Thailand’s business may be adversely affected by market uncertainty or lack of confidence among investors.

Longroot Thailand’s revenues are derived from the participation in fundraising activities via the issuance of crypto tokens through its Initial Coin Offering (ICO) Portals. Uncertain economic and market conditions, and other poor geopolitical conditions, may adversely affect investor confidence and business activities of potential clients. This could result in declines in size and number of fundraises, which would likely negatively impact Longroot Thailand’s results of operations.

Regulatory changes or actions may alter the nature of the Company’s ownership of Longroot Thailand or restrict the use of cryptocurrencies in a manner that adversely affects Longroot Thailand’s business, prospects or operations.

As cryptocurrencies have grown in both popularity and market size, governments around the world have reacted differently to cryptocurrencies, with certain governments deeming them illegal while others have allowed their use and trade. Thailand, where Longroot Thailand is regulated, is the first country to approve a legal initial coin offering (“ICO”) portal for issuers. Under Thai Securities and Exchange Commission (“Thai SEC”) regulation, all crypto token issuances in Thailand must be approved by the Thai SEC and carried out via an approved ICO Portal such as Longroot Thailand. Governments may in the future take regulatory actions that prohibit or severely restrict the right to acquire, own, hold, sell, use or trade cryptocurrencies or to exchange cryptocurrencies for fiat currency. Similar actions by governments or regulatory bodies could impact the ability of Longroot Thailand to continue to operate and such actions could affect the ability of Longroot Thailand to continue as a going concern, which could have a material adverse effect on the business, prospects or operations of the Company.

Furthermore, tokens issued by Longroot Thailand may be classified as securities depending on the nature of the token and the regulatory frameworks of the respective jurisdictions. Longroot Thailand’s activities may be subject to securities regulations in different jurisdictions, which could limit its business activity, such as limits on the personnel it can issue tokens to, and this may negatively impact Longroot Thailand’s profitability. In addition, compliance with existing laws and regulations, will involve significant amounts of time, including that of Longroot Thailand’s senior leaders and that of dedicated compliance personnel, all of which might negatively impact Longroot Thailand’s results of operations.

The development and acceptance of cryptographic and algorithmic protocols governing the issuance of and transactions in cryptocurrencies are subject to a variety of factors that are difficult to evaluate.

The use of cryptocurrencies to, among other things, buy and sell goods and services and complete transactions, is part of a new and rapidly evolving industry that employs digital assets based upon a computer-generated mathematical and/or cryptographic protocol. The growth of this industry in general, and the use of cryptocurrencies in particular, is subject to a high degree of uncertainty, and the slowing or stopping of the development or acceptance of developing protocols may occur and is unpredictable.


Longroot Thailand’s coins might be used for illegal or improper purposes, which could expose Longroot Thailand to additional liability and harm its business.

Longroot Thailand’s coins remain susceptible to potentially illegal or improper uses as criminals are using increasingly sophisticated methods to engage in illegal activities involving internet services, such as money laundering, terrorist financing, drug trafficking, human trafficking, illegal online gaming, romance and other online scams, prohibited sales of pharmaceuticals, fraudulent sale of goods or services, piracy of software, movies, music and other copyrighted or trademarked goods, unauthorized uses of credit and debit cards or bank accounts and similar misconduct. Coinholders may also encourage, promote, facilitate or instruct others to engage in illegal activities. If the measures Longroot Thailand has taken are too restrictive and inadvertently screen proper transactions, this could diminish customer experience which could harm its business. Thailand’s business could be harmed if customers use its system for illegal or improper purposes.

Acceptance and/or widespread use of cryptocurrency is uncertain.

Currently, there is a relatively small use of cryptocurrencies in the retail and commercial marketplace for goods or services. In comparison, there is relatively large use by speculators contributing to price volatility. The relative lack of acceptance of cryptocurrencies in the retail and commercial marketplace limits the ability of end-users to use them to pay for goods and services. Such lack of acceptance or decline in acceptances would have a material adverse effect on the ability of Longroot Thailand to continue as a going concern or to pursue this segment at all, which would have a material adverse effect on the business, prospects or operations of Longroot Thailand and ultimately the Company.

There are cyber security risks related to cryptocurrency trading.

Trading platforms and third-party service providers may be vulnerable to hacking or other malicious activity. As with any computer code generally, flaws in cryptocurrency codes may be exposed to such negative activities. Several errors and defects have been found previously, including those that disabled some functionality for users of cryptocurrency trading platforms and exposed such users’ personal information. Flaws in and exploitations of the source code allowing malicious actors to take or create money have previously occurred. Any of the above events effecting Longroot Thailand may adversely affect its operations and results of operations and ultimately have a material adverse effect on the Company.

Competing blockchain platforms and technologies may cause consumers to use alternative distributed ledgers.

The development and acceptance of competing blockchain platforms or technologies may cause consumers to use alternative distributed ledgers or an alternative to distributed ledgers altogether. This may adversely affect Longroot Thailand.

Future regulatory changes affecting Longroot Thailand are unable to predict.

Digital assets in Thailand are regulated under the Securities and Exchange Commission of Thailand, and are subject to comprehensive statutes, regulations and margin requirements. In addition, the Securities and Exchange Commission of Thailand is authorized to take extraordinary actions in the event of a market emergency, including, for example, the retroactive implementation of speculative position limits or higher margin requirements, the establishment of daily price limits and the suspension of trading. The regulation of digital assets both inside and outside Thailand is a rapidly changing area of law and is subject to modification by government and judicial action. Digital assets also currently face an uncertain regulatory landscape in various jurisdictions. Various foreign jurisdictions may, in the near future, adopt laws, regulations or directives that affect digital assets and its users, particularly digital asset operators and service providers that fall within such jurisdictions’ regulatory scope. Such laws, regulations or directives may conflict with those of Thailand and may negatively impact the acceptance of digital assets by users, merchants and service providers outside of Thailand and may therefore impede the growth of the digital asset economy. The effect of any future domestic or foreign regulatory change on the Longroot Thailand is unable to be predicted, but such change could be substantial and adverse to Longroot Thailand’s operations and prospects.


Risks Related to our Pending Acquisition of IFEB

We have paid a significant amount of cash to certain sellers of the IFEB Shares in connection with the proposed acquisition of the control of IFEB, which transaction may not be approved, and which consideration we have no ability to obtain the return of.Our Intellectual Property

As described above under “Item 1. Business—Recent Material Events—IFEB Bank Transaction”, on April 1, 2021, we entered into the Bill of Sale with certain third parties pursuant to which the Company agreed to purchase 2,191,489 shares of authorized and outstanding Class A Common Stock of IFEB, which IFEB Shares total approximately 57.1% of the outstanding Class A Common Stock of IFEB. The purchase price of the IFEB Shares was $6,400,000, which amount was paid to the sellers on April 1, 2021. Notwithstanding the terms of the Bill of the Sale, and the payment by the Company of the aggregate purchase price pursuant thereto, the transfer of the IFEB Shares to the Company and the Company’s acquisition of control of IFEB is subject to review of the Company’s financial viability, as well as other matters, by OCIF, and as such, the Company has filed a formal change of control application which must be approved before taking ownership and control of the IFEB Shares. The Company anticipates completing acquisition of the IFEB Shares in or around June 2021, however, the Company has no way of unwinding the transaction to purchase the IFEB Shares, or of obtaining the return of the $6,400,000 paid to the sellers in connection therewith if the transaction is not completed. The Company anticipates that if it is not able to obtain control of the IFEB Shares, it would attempt to sell such shares to a third party. Such sale may not be able to be completed on the same terms as the original proposed acquisition of the IFEB Shares by the Company, or at all. Any failure to complete the transfer of the IFEB Shares may have an adverse effect on the Company’s financial condition and results of operations.

Combining IFEB and the Company may be more difficult, costly or time-consuming than expected and the Company may fail to realize the anticipated benefits of the acquisition of control of IFEB.

The success of the acquisition of control of IFEB will depend, in part, on the combined company’s ability to realize anticipated cost savings from combining the businesses of the Company and IFEB. Combining IFEB and the Company may be more difficult, costly or time-consuming than expected and the Company may fail to realize the anticipated benefits of the planned acquisition of IFEB.

We will be subject to business uncertainties until the acquisition of IFEB is completed.

Uncertainty about the effect of the Bill of Sale on employees and partners may have an adverse effect on us. These uncertainties may impair our and IFEB’s ability to attract, retain and motivate key personnel until the Bill of Sale are completed, and could cause partners and others that deal with us and IFEB to seek to change existing business relationships, cease doing business with us and IFEB or cause potential new partners to delay doing business with us and IFEB until the Bill of Sale transactions have been successfully completed. Retention of certain employees may be challenging during the pendency of the Bill of Sale, as certain employees may experience uncertainty about their future roles or compensation structure. If key employees depart because of issues relating to the uncertainty and difficulty of integration or a desire not to remain with the business, our business following the Bill of Sale could be negatively impacted. In addition, the Exchange Agreements restrict us from making certain acquisitions and taking other specified actions until the Bill of Sale are completed without certain consents and approvals. These restrictions may prevent us from pursuing attractive business opportunities that may arise prior to the completion of the Bill of Sale.


Failure to complete the acquisition of IFEB could negatively impact our stock price and future business and financial results.

If the acquisition of control of IFEB is not completed, our ongoing business may be adversely affected and we would be subject to a number of risks, including the following:

●          we will not realize the benefits expected from the acquisition of control of IFEB, including a potentially enhanced competitive and financial position, expansion of assets and therefore opportunities, and will instead be subject to all the risks we currently face as an independent company;

●          we may experience negative reactions from the financial markets and our partners and employees; and

●          matters relating to the acquisition of control of IFEB (including integration planning) may require substantial commitments of time and resources by our management, which would otherwise have been devoted to other opportunities that may have been beneficial to us as an independent company.

Our inability to fully integrate IFEB’s business into our operations could adversely affect our operations or results.

Our future growth and profitability depend on our ability to successfully integrate IFEB’s banking operations into our operations. Integration of an acquired business can be complex and costly, sometimes including combining relevant accounting and data processing systems and management controls and policies, as well as managing relevant relationships with employees, clients, suppliers and other business partners. Integration efforts have diverted and could continue to divert management attention and resources, which could adversely affect our operations or results. The loss of key employees in connection with this acquisition could adversely affect our ability to successfully conduct the combined operations. There can be no assurance that any of these executives will choose to continue working with us, or if they do, that we will be able to successfully integrate these executives as part of our management team in the combined business.

The acquisition of IFEB may result in business disruptions that cause IFEB to lose customers or cause customers to move their accounts or business to competing financial institutions. It is possible that the integration process related to the acquisition could disrupt our ongoing business or result in inconsistencies in customer service that could adversely affect IFEB’s ability to maintain relationships with clients, customers, depositors and employees. Our inability to overcome these risks could have a material adverse effect on our business or financial condition, results of operations and future prospects. There is no assurance that our integration efforts will not result in other unanticipated costs.

The operations of IFEB are in a completely different industry than our current operations and we may not be successful in that new industry.

IFEB was incorporated in 2017 as a corporation under the laws of the Commonwealth of Puerto Rico and received its international financial entity license on June 18, 2017 from the Office of the Commissioner of Financial Institutions of Puerto Rico, in Spanish, “Oficina del Comisionado de Instituciones Financieras”, as license #51. As a result, IFEB is regulated by OCIF. Our officers do not have significant experience running a bank and we may not be profitable in this new line of business, assuming the acquisition of control of IFEB is approved. Even if we achieve profitability in the future by adopting this new business strategy, we may not be able to sustain profitability in subsequent periods. The operation of IFEB may subject us to unknown costs, liabilities, regulations and expenses which we haven’t budgeted for and we may ultimately be unsuccessful in this new line of business in the event the acquisition of IFEB is approved.

Risks Related to Monaker’s Common Stock

Stockholders may be diluted significantly through our efforts to obtain financing and satisfy obligations through the issuance of additional shares of our common stock.

Wherever possible, our board of directors will attempt to use non-cash consideration to satisfy obligations. In many instances, we believe that the non-cash consideration will consist of restricted shares of our common stock or where shares are to be issued to our officers, directors and applicable consultants, free trading shares pursuant to Form S-8 registration statements. Our board of directors has authority, without action or vote of the stockholders, to issue all or part of the authorized but unissued shares of common stock. In addition, we may attempt to raise capital by selling shares of our common stock, possibly at a discount to the market price of such securities. These actions will result in dilution of the ownership interests of existing stockholders, which may further dilute common stock book value, and that dilution may be material. Such issuances may also serve to enhance existing management’s ability to maintain control of the Company because the shares may be issued to parties or entities committed to supporting existing management.


Nevada law and our Articles of Incorporation authorize us to issue shares of common and preferred stock, which shares may cause substantial dilution to our existing stockholders.

We have authorized capital stock consisting of 500,000,000 shares of common stock, $0.00001 par value per share, 3,000,000 shares of Series A Preferred stock, $0.01 par value per share, 10,000,000 shares of Series B Preferred Stock, $0.00001 par value per share and 3,828,500 shares of Series C Preferred Stock, $ 0.00001 par value per share. As of the date of this Report, we have 23,454,203 shares of common stock issued and outstanding, 10,000,000 shares of Series B Preferred Stock, and 3,828,500 shares of Series C Preferred Stock, issued and outstanding. As a result, our board of directors can issue a large number of additional shares of common stock and/or effect a reverse stock split, without stockholder approval, and if additional shares are issued, it could cause substantial dilution to our then stockholders. Additionally, shares of preferred stock may be issued by our board of directors without stockholder approval with voting powers, and such preferences and relative, participating, optional or other special rights and powers as determined by our board of directors, which may be greater than the shares of common stock currently outstanding. As a result, shares of preferred stock may be issued by our board of directors which cause the holders to have super-majority voting power over our shares, provide the holders of the preferred stock the right to convert the shares of preferred stock they hold into shares of our common stock, which may cause substantial dilution to our then common stock stockholders and/or have other rights and preferences greater than those of our common stock stockholders. Investors should keep in mind that the board of directors has the authority to issue additional shares of common stock and preferred stock, which could cause substantial dilution to our existing stockholders. Additionally, the dilutive effect of any preferred stock, which we may issue may be exacerbated given the fact that such preferred stock may have super-majority voting rights and/or other rights or preferences which could provide the preferred stockholders with voting control over us subsequent to this offering and/or give those holders the power to prevent or cause a change in control. As a result, the issuance of shares of common stock and/or preferred stock may cause the value of our securities to decrease and/or become worthless.

The outstanding Series B Preferred Stock and Series C Preferred Stock have a liquidation preference on parity with our common stock.

If the HotPlay Share Exchange is not completed, the Series B Preferred Stock and Series C Preferred Stock, will not be convertible into common stock. If that were to occur Monaker would likely hold another special or annual meeting of stockholders to again request approval for such conversions/exercise separate from the HotPlay Share Exchange, if necessary or required; provided that until converted in full, such Series B Preferred Stock and Series C Preferred Stock, which have a liquidation preference of $9,272,121 and $7,657,000, respectively, will remain outstanding, and will, upon any liquidation of Monaker, reduce pro-rata, the amount of any consideration that the common stock stockholders of Monaker would receive upon liquidation of Monaker.

Our outstanding warrants may adversely affect the trading price of our common stock.

As of the date of this Report, there were outstanding warrants to purchase 1,131,671 shares of common stock at a weighted average exercise price of $3.34 per share, not including the creditor warrants. For the life of the warrants, the holders have the opportunity to profit from a rise in the market price of our common stock without assuming the risk of ownership. The issuance of shares upon the exercise of outstanding securities will also dilute the ownership interests of our existing stockholders.

The availability of these shares for public resale, as well as any actual resales of these shares, could adversely affect the trading price of our common stock. We cannot predict the size of future issuances of our common stock pursuant to the exercise of outstanding options or warrants or conversion of other securities, or the effect if any, that future issuances and sales of shares of our common stock may have on the market price of our common stock. Sales or distributions of substantial amounts of our common stock (including shares issued in connection with an acquisition), or the perception that such sales could occur, may cause the market price of our common stock to decline.


Certain warrants we have granted include anti-dilutive rights

The warrants to purchase 724,000 shares of common stock which we granted to certain purchases in our October 2018 offering (of which warrants to purchase 527,400 shares are currently outstanding) include anti-dilution rights, which provide that if at any time while the warrants are outstanding, we issue or are deemed to have issued (which includes shares issuable upon exercise of warrants and options and conversion of convertible securities) securities for consideration less than the then current exercise price of the warrants, subject to certain excepted issuances, the exercise price of such warrants is automatically reduced to the lowest price per share of consideration provided or deemed to have been provided for such securities, not to be less than $0.57 per share (subject to adjustment for reverse and forward stock splits, recapitalizations and similar transactions). The warrants which originally had an exercise price of $2.85 per share currently have any exercise price of $2.00 per share as a result of our April 2019 underwritten offering.

Our Common Stock may be delisted from the Nasdaq Capital Market if we cannot satisfy Nasdaq’s continued listing requirements.

Among the conditions required for continued listing on the Nasdaq Capital Market, Nasdaq requires us to maintain at least $2.5 million in stockholders’ equity or $500,000 in net income over the prior two years or two of the prior three years, to have a majority of independent directors, and to maintain a stock price over $1.00 per share. As of the date of this Report, our stockholders’ equity is above Nasdaq’s $2.5 million minimum and, we have maintained our stock price over $1.00 per share (provided that our stock price traded as low as $0.61 during calendar 2020).

Moving forward, we may not be able to maintain at least $2.5 million in stockholders’ equity, may not generate over $500,000 of yearly net income, we may not be able to maintain independent directors, we may not be able to maintain a stock price over $1.00 per share and/or may not be able to meet the requirements related to the number of independent directors on our board of directors and/or hold an annual meeting of stockholders on a timely basis. If we fail to timely comply with the applicable requirements, and/or to timely cure the deficiencies described above, our stock may be delisted. In addition, even if we demonstrate compliance with the requirements above, we will have to continue to meet other objective and subjective listing requirements to continue to be listed on the Nasdaq Capital Market. Delisting from the Nasdaq Capital Market could make trading our common stock more difficult for investors, potentially leading to declines in our share price and liquidity. Without a Nasdaq Capital Market listing, stockholders may have a difficult time getting a quote for the sale or purchase of our stock, the sale or purchase of our stock would likely be made more difficult and the trading volume and liquidity of our stock could decline. Delisting from the Nasdaq Capital Market could also result in negative publicity and could also make it more difficult for us to raise additional capital. The absence of such a listing may adversely affect the acceptance of our common stock as currency or the value accorded by other parties. Further, if we are delisted, we would also incur additional costs under state blue sky laws in connection with any sales of our securities. These requirements could severely limit the market liquidity of our common stock and the ability of our stockholders to sell our common stock in the secondary market. If our common stock is delisted by Nasdaq, our common stock may be eligible to trade on an over-the-counter quotation system, such as the OTCQB market, where an investor may find it more difficult to sell our stock or obtain accurate quotations as to the market value of our common stock. In the event our common stock is delisted from the Nasdaq Capital Market, we may not be able to list our common stock on another national securities exchange or obtain a quotation on an over-the-counter quotation system.

If we are delisted from the Nasdaq Capital Market, your ability to sell your shares of our common stock could also be limited by the penny stock restrictions, which could further limit the marketability of your shares.

If our common stock is delisted from Nasdaq, it could come within the definition of “penny stock” as defined in the Exchange Act and would then be covered by Rule 15g-9 of the Exchange Act. That Rule imposes additional sales practice requirements on broker-dealers who sell securities to persons other than established customers and accredited investors. For transactions covered by Rule 15g-9, the broker-dealer must make a special suitability determination for the purchaser and receive the purchaser’s written agreement to the transaction prior to the sale. Consequently, Rule 15g-9, if it were to become applicable, would affect the ability or willingness of broker-dealers to sell our securities, and accordingly would affect the ability of stockholders to sell their securities in the public market. These additional procedures could also limit our ability to raise additional capital in the future.


Due to the fact that our common stock is listed on the Nasdaq Capital Market, we are subject to financial and other reporting and corporate governance requirements which increase our costs and expenses.

We are currently required to file annual and quarterly information and other reports with the Securities and Exchange Commission that are specified in Sections 13 and 15(d) of the Exchange Act. Additionally, due to the fact that our common stock is listed on the Nasdaq Capital Market, we are also subject to the requirements to maintain independent directors, comply with other corporate governance requirements, and are required to pay annual listing and stock issuance fees. These obligations require a commitment of additional resources including, but not limited, to additional expenses, and may result in the diversion of our senior management’s time and attention from our day-to-day operations. These obligations increase our expenses and may make it more complicated or time-consuming for us to undertake certain corporate actions because we may require Nasdaq approval for such transactions and/or Nasdaq rules that may require us to obtain stockholder approval for such transactions. 

General Risk Factors

 

Our stock price may be volatile.

 The market price of our common stock is likely to be volatile and could be subject to wide fluctuations in response to, among other things, the risk factors described herein and other factors beyond our control. Factors affecting the trading price of our common stock could include:

variations in our operating results;

variations in operating results of similar companies and competitors;

changes in the estimates of our operating results or changes in recommendations by any securities analysts that elect to follow our common stock;

changes in our outlook for future operating results which are communicated to investors and analysts;

announcements of technological innovations, new products, services or service enhancements, strategic alliances or agreements by us or by our competitors;

marketing and advertising initiatives by us or our competitors;
the increase or decrease of listings;

threatened or actual litigation;

changes in our management;

recruitment or departures of key personnel;

market conditions in our industry, the travel industry and the economy as a whole;

the overall performance of the equity markets;

sales of shares of our common stock by existing stockholders;

global pandemics and epidemics, such as COVID-19;
the reports of industry research analysts who cover our competitors and us;

stock-based compensation expense under applicable accounting standards; and
adoption or modification of regulations, policies, procedures or programs applicable to our business.

Furthermore, the stock markets have experienced price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. These fluctuations often have been unrelated or disproportionate to the operating performance of those companies. These broad market and industry fluctuations and general economic, political and market conditions, such as recessions, interest rate changes or international currency fluctuations, may negatively affect the market price of our common stock regardless of our actual operating performance. Each of these factors, among others, could harm the value of our common stock.

In the past, many companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation; and we have previously been the target of this type of litigation. Securities litigation against us, regardless of the merits or outcome, could result in substantial costs and divert our management’s attention from other business concerns, which could materially harm our business.


If the holders of our common stock sell a large number of shares all at once or in blocks, the market price of our shares would most likely decline.

Certain of our stockholders and warrant holders hold shares of common stock that are freely tradable and/or freely tradable upon exercise. Should such holders decide to sell their shares at a price below the market price as quoted on NASDAQ, or any exchange on which our common stock might be listed in the future, the price may continue to decline. A steep decline in the price of our common stock upon being quoted on NASDAQ, or any exchange on which our common stock might be listed in the future, would adversely affect our ability to raise additional equity capital, and even if we were successful in raising such capital, the terms of such raise may be substantially dilutive to current stockholders.

If securities analysts and other industry experts do not publish research or publish negative research about our business, our stock price and trading volume could decline.

The trading market for our common stock depends in part on the research, reports and other media that securities analysts and other industry experts publish about us or our business. If security analysts don’t cover our stock, downgrade our stock or publish negative research about our business, our stock price could decline. If analysts do not cover us in the future, cease coverage of our company or fail to publish reports on us regularly, we could lose visibility in the stock market and demand for our stock could decrease, which could cause our stock price or trading volume to decline. If one or more industry analysts publish negative statements about our business, our stock price could decline.

Failure to adequately manage our growth may seriously harm our business.

We plan to grow our business as rapidly as possible. If we do not effectively manage our growth, the quality of our services may suffer, which could negatively affect our reputation and demand for our services. Our growth may place a significant strain on our managerial, administrative, operational, and financial resources and our infrastructure. Our future success will depend, in part, upon the ability of our senior management to manage growth effectively. This will require us to, among other things:

implement additional management information systems;

further develop our operating, administrative, legal, financial, and accounting systems and controls;

hire additional personnel;

develop additional levels of management within our company;

locate additional office space;

maintain close coordination among our operations, legal, finance, sales and marketing, and client service and support teams; and

manage our expanding international operations.

As a result, we may lack the resources to deploy our services on a timely and cost-effective basis. Failure to accomplish any of these requirements could impair our ability to deliver services in a timely fashion or attract and retain new customers.

We do not anticipate paying any dividends on our common stock.

We do not anticipate paying any cash dividends on our common stock in the foreseeable future. If we do not pay cash dividends, our stockholders could receive a return on their investment in our common stock only if the market price of our common stock has increased when they sell their shares.


Our incorporation documents and Nevada law may inhibit a takeover that stockholders consider favorable and could also limit the market price of our common stock, which may inhibit an attempt by our stockholders to change our direction or management.

Nevada law and our articles of incorporation contain provisions that could delay or prevent a change in control of our Company. Some of these provisions include the following:

authorize our board of directors to determine the rights, preferences, privileges and restrictions granted to, or imposed upon, the preferred stock and to fix the number of shares constituting any series and the designation of such series without further action by our stockholders; and

prohibit cumulative voting in the election of directors, which would otherwise allow less than a majority of stockholders to elect director candidates.

These and other provisions in our articles of incorporation, as amended, and under Nevada law could reduce the price that investors might be willing to pay for shares of our common stock in the future and result in the market price being lower than it would be without these provisions. Furthermore, these provisions may inhibit an attempt by our stockholders to change our direction or management.

We adopted provisions in our amended and restated articles of incorporation limiting the liability of management to stockholders.

We have adopted provisions, and will maintain provisions, to our amended and restated articles of incorporation that limit the liability of our directors, and provide for indemnification by us of our directors and officers to the fullest extent permitted by Nevada law. Our Articles of Incorporation and Nevada law provide that directors have no personal liability to third parties for monetary damages for actions taken as a director, except for breach of duty of loyalty, acts or omissions not in good faith involving intentional misconduct or knowing violation of law, unlawful payment of dividends or unlawful stock repurchases, or transactions from which the director derived improper personal benefit. Such provisions limit the stockholders’ ability to hold directors liable for breaches of fiduciary duty and reduce the likelihood of derivative litigation against directors and officers.

If we do not adequately protect our intellectual property, our ability to compete could be impaired.

Our intellectual property includes the content of our websites, registered domain names, as well as registered and unregistered trademarks. We believe thatsuccess is heavily dependent upon our intellectual property is an essential asset of our business and that our domain names and our technology infrastructure currently give us a competitive advantage in the online market for ALR listings and cryptocurrency. If we do not adequatelyother proprietary rights. To protect our intellectual property our brand, reputation and perceived content value could be harmed, resulting in an impaired ability to compete effectively.

To protect our intellectual property,other proprietary rights, we rely on a combination of copyright, trademark, patent and trade secret laws, contractual provisions and our user policy and restrictions on disclosure. Upon discovery of potential infringement of our intellectual property, we promptly take action we deem appropriate to protect our rights. We also enter into confidentiality agreements with our employees and consultants and seek to control access to and distribution of our proprietary information in a commercially prudent manner. The efforts we have taken to protect our intellectual property may not be sufficient or effective, and, despite these precautions, it may be possible for other parties to copy or otherwise obtain and use the content of our websites and products without authorization. We may be unable to prevent competitors from acquiring domain names or trademarks that are similar to, infringe upon or diminish the value of our domain names, service marks and our other proprietary rights. Even if we do detect violations and decide to enforce our intellectual property rights, litigation may be necessary to enforce our rights, and any enforcement efforts we undertake could be time-consuming, expensive, distracting and result in unfavorable outcomes. A failure to protect our intellectual property in a cost-effective and meaningful manner could have a material adverse effect on our ability to compete.

Effective trademark, copyright and trade secret protection may not be available in every country in which our products and services are availableoffered, either in person or over the Internet. Further, the laws of certain countries do not protect proprietary rights to the same extent as the laws of the United States and, therefore, in certain jurisdictions, including in certain of the countries that we operate in, we may be unable to protect their proprietary technology adequately against unauthorized third-party copying, infringement or use, which could adversely affect our competitive position. In addition, the legal standards relating to the validity, enforceability and scope of protection of intellectual property rights are uncertain and still evolving.

Certain of our products, and particularly those offered by our NextMedia division, are subject to the threat of piracy and unauthorized copying, and inadequate intellectual property laws and other protections could prevent us from enforcing or defending our proprietary technologies. Further, the use of unauthorized “cheat” programs or the use of other unauthorized software modifications by users could impact multiplayer gameplay or lead to reductions in microtransactions in our games.

Piracy is a persistent problem for us, and policing the unauthorized sale, distribution and use of products is difficult, expensive, and time-consuming. Further, the laws of some countries in which our products are, or may be, distributed either do not protect products and intellectual property rights to the same extent as the laws of the United States, or are poorly enforced. In addition, although we take steps to make the unauthorized sale, distribution and use of our products more difficult and to enforce and police our rights, as do the operators of other platforms on which many of their games are played, these efforts may not be successful in controlling the piracy of products in all instances.

In addition, “cheating” programs or other unauthorized software tools and modifications that enable consumers to cheat in games could negatively impact the volume of microtransactions or purchases of downloadable content. In addition, vulnerabilities in the design of our products or the platforms upon which they run could be discovered after their release, which may result in lost revenues from paying consumers or increased cost of developing technological measures to respond to these, either of which could negatively impact our business.


 

We may be subject to claims that we violated intellectual property rights of others, which are extremely costly to defend and could require us to pay significant damages and limit our ability to operate.

Companies in the Internet and technology industries, and other patent and trademark holders seeking to profit from royalties in connection with grants of licenses, own large numbers of patents, copyrights, trademarks and trade secrets and frequently enter into litigation based on allegations of infringement or other violations of intellectual property rights. There may be intellectual property rights held by others, including issued or pending patents and trademarks, that cover significant aspects of our technologies, content, branding or business methods. Any intellectual property claims against us, regardless of merit, could be time-consuming and expensive to settle or litigate and could divert our management’s attention and other resources. These claims also could subject us to significant liability for damages and could result in our having to stop using technology, content, branding or business methods found to be in violation of another party’s rights. We might be required or may opt to seek a license for rights to intellectual property held by others, which may not be available on commercially reasonable terms, or at all. If we cannot license or develop technology, content, branding or business methods for any allegedly infringing aspect of our business, we may be unable to compete effectively. Even if a license is available, we could be required to pay significant royalties, which could increase our operating expenses. We may also be required to develop alternative non-infringing technology, content, branding or business methods, which could require significant effort and expense and be inferior. Any of these results could harm our operating results.


Uncertainty and illiquidity in credit and capital markets can impair ourOur ability to acquire and maintain licenses to intellectual property may affect our revenue and profitability.

While most of the intellectual property we use in our games is created by us, we also acquire rights to third-party intellectual property. Proprietary licenses typically limit our use of intellectual property to specific uses and for specific time periods, and include other contractual obligations with which we must comply. Competition for these licenses is intense. If we were unable to obtain credit and remain in compliance with the terms of these licenses or obtain additional licenses on reasonable economic terms, our revenue and profitability may be adversely impacted. In addition, use of these intellectual properties generally requires that we pay a royalty to the licensor, which decreases our profitability.

We use open-source software in connection with certain of our games and services, which may pose particular risks to our proprietary software, products, and services, and which could have a negative impact on our business.

We use open-source software in connection with some of the games and services we offer. Some open-source software licenses require users who distribute open-source software as part of their software to publicly disclose all or part of the source code to such software or make available any derivative works of the open-source code on unfavorable terms or at no cost. The terms of various open-source licenses have not been interpreted by courts, and there is a risk that such licenses could be construed in a manner that imposes unanticipated conditions or restrictions on our use of the open-source software. Were it to be determined that our use was not in compliance with a particular license, we may be required to release proprietary source code, pay damages for breach of contract, re-engineer games or products, discontinue distribution in the event re-engineering cannot be accomplished on a timely basis, or take other remedial action that may divert resources away from their game or technology development efforts, any of which could negatively impact our business.


Risks Related to Our Securities

The price of our common stock may fluctuate significantly, and investors could lose all or part of their investments.

The market price of our common stock is likely to be volatile and could be subject to wide fluctuations in response to, among other things, the risk factors described herein and other factors beyond our control. Factors affecting the trading price of our common stock could include, without limitation:

variations in our operating results and/or those of similar companies and our competitors;
changes in the estimates of our operating results or changes in recommendations by any securities analysts that elect to follow our common stock;
announcements of technological innovations, new products, services or service enhancements, strategic alliances or agreements by us or by our competitors;
marketing and advertising initiatives by us or our competitors;
threatened or actual litigation;
changes in our management;
market conditions in the industries in which we operate and the economy as a whole;
the overall performance of the equity markets;
sales of shares of our common stock by us or by existing stockholders;
global pandemics and epidemics, such as COVID-19; and
adoption or modification of regulations, policies, procedures or programs applicable to our business.

Furthermore, the stock markets have experienced price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. These fluctuations often have been unrelated or disproportionate to the operating performance of those companies. These broad market and industry fluctuations and general economic, political and market conditions, such as recessions, interest rate changes or international currency fluctuations, may negatively affect the market price of our common stock regardless of our actual operating performance. Each of these factors, among others, could harm the value of our common stock.

In the past, many companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation; and we have previously been the target of this type of litigation. Securities litigation against us, regardless of the merits or outcome, could result in substantial costs and divert our management’s attention from other business concerns, which could materially harm our business.

Stockholders may be diluted significantly through our efforts to obtain financing on acceptable terms and cansatisfy obligations through the issuance of additional shares of our common stock or securities convertible into, or exercisable for, shares of our common stock.

Our board of directors has authority, without action or vote of our stockholders, to issue all or part of our authorized but unissued shares of common stock. In the past we have, and in the future we may, raise additional capital by selling shares of our common stock or securities convertible into, or exercisable for, shares of our common stock, possibly at a discount to the market price of such securities. These actions will result in dilution of the ownership interests of existing stockholders, which may further dilute common stock book value, and that dilution may be material. Such issuances may also serve to enhance existing management’s ability to maintain control of the Company because the shares may be issued to parties or entities committed to supporting existing management.


The ownership of our capital stock is highly concentrated, which may prevent other stockholders from influencing significant corporate decisions and may result in conflicts of interest that could cause our stock price to decline.

As of May 30, 2022, Nithinan Boonyawattanapisut (our Co-Chief Executive Officer and a director) and her spouse, J. Todd Bonner (Chairman of our board of directors) beneficially own, together with entities controlled by them, approximately 26% of our issued and outstanding shares of common stock. In addition, Tree Roots Entertainment Group Co Ltd. (“Tree Roots”), and entity controlled by Jwanwat Ahriyavraromp and Pornsinee Chalermrattawongz, beneficially owns approximately 25% of our outstanding common stock as of May 30, 2022. Accordingly, Ms. Boonyawattanapisut and Mr. Bonner (together), and Mr. Ahriyavraromp and Mrs. Chalermrattawongz (through their control of Tree Roots), exert substantial influence over the Company and the outcome of corporate actions requiring stockholder approval, including the election of directors, any merger, consolidation or sale of all or substantially all of the Company’s assets or any other significant corporate transactions. These stockholders may also delay or prevent a change of control of the Company, even if such a change of control would benefit other stockholders of the Company. The significant concentration of stock ownership may adversely affect the financial strengthtrading price of our business partners.common stock due to investors’ perception that conflicts of interest may exist or arise.

Nevada law and our Articles of Incorporation authorize us to issue shares of stock, which shares may cause substantial dilution to our existing stockholders.

Our abilityWe have authorized capital stock consisting of 500,000,000 shares of common stock, par value $0.00001 per share; 3,000,000 shares of Series A Preferred stock, par value $0.01 per share; 10,000,000 shares of Series B Preferred Stock, par value $0.00001 per share; 3,828,500 shares of Series C Preferred Stock, par value $0.00001 per share; and 6,100,000 shares of Series D Preferred Stock, par value $0.00001 per share. As of February 28, 2022, we had 108,360,020 shares of common stock issued and outstanding, and no preferred stock issued and outstanding. As a result, our board of directors can issue a large number of additional shares of common stock without stockholder approval, and if additional shares are issued, it could cause substantial dilution to obtain creditour then stockholders.

Additionally, shares of preferred stock may be issued by our board of directors without stockholder approval with voting powers, and capital depends in large measuresuch preferences and relative, participating, optional or other special rights and powers as determined by our board of directors, which may be greater than the shares of common stock currently outstanding. The issuance of shares of preferred stock, depending on the staterights, preferences and privileges attributable to shares thereof, could reduce the voting rights and powers of our common stock and the portion of our assets allocated for distribution to common stockholders in a liquidation event, and could also result in dilution in the book value per share of our outstanding common stock. The preferred stock could also be utilized, under certain circumstances, as a method for raising additional capital or discouraging, delaying or preventing a change in control of the credit and capital markets, which is beyond our control. Our abilityCompany, to access credit and capital markets may be restricted at a time when we would like, or need, access to those markets, which could constrain our flexibility to react to changing economic and business conditions. In addition, the cost and availability of debt and equity financing may be adversely impacted by unstable or illiquid market conditions. Protracted uncertainty and illiquidity in these markets also could have an adverse impact on our lenders or our customers, preventing them from meeting their obligations to us. 

Our business could be materially and adversely affected if we are unable to obtain necessary funds from financing activities. Uncertainty and illiquidity in financial markets may materially impact the ability of the participating financial institutions to fund their commitments to us under our liquidity facilities. Accordingly, we may not be able to obtain the full amount of the funds available under our liquidity facilities to satisfy our cash requirements, and our failure to do so could have a material adverse effect on our operations and financial position.

Future litigation or governmental proceedings could result in material adverse consequences, including judgments or settlements.

From time to time, we are involved in lawsuits, regulatory inquiries and may be involved in governmental and other legal proceedings arising out of the ordinary coursedetriment of our business. Many of these matters raise difficultcurrent stockholders.

If we fail to maintain effective internal controls, it could adversely affect our financial position and complicated factual and legal issues and are subject to uncertainties and complexities. The timing of the final resolutions to these types of matters is often uncertain. Additionally, the possible outcomes or resolutions to these matters could include adverse judgments or settlements, either of which could require substantial payments, adversely affectinglower our results of operations and liquidity.

Changes in our effective tax rate could harm our future operating results.stock price.

We are subject to federalreporting and state income taxesother obligations under the Exchange Act, including the requirements of the Sarbanes-Oxley Act. These provisions require annual management assessments of the effectiveness of our internal controls over financial reporting. We also operate in the United Statesa complex environment and in various foreign jurisdictions. Our provision for income taxesexpect these obligations, together with our rapid growth and our effective tax rate are subjectexpansion through acquisitions, to volatility and could be adversely affected by several circumstances, including:

earnings being lower than anticipated in countries that have lower tax rates and higher than anticipated in countries that have higher tax rates;

effects of certain non-tax-deductible expenses;

changes in the valuation of our deferred tax assets and liabilities;

transfer pricing adjustments, including the effect of acquisitions on our intercompany research and development cost sharing arrangement and legal structure;

adverse outcomes resulting from any tax audit;

our ability to utilize our net operating losses and other deferred tax assets; and

changes in accounting principles or changes in tax laws and regulations, or the application of the tax laws and regulations, including possible U.S. changes to the deductibility of expenses attributable to foreign income, or the foreign tax credit rules.


Significant judgment is required in the application of accounting guidance relating to uncertainty in income taxes. If tax authorities challenge our tax positions and any such challenges are settled unfavorably, it could adversely impact our provision for income taxes.

Our websites may encounter technical problems and service interruptions.

Our websites may in the future experience slower response times or interruptions as a result of increased traffic or other reasons. These delays and interruptions resulting from failure to maintain Internet service connections to our site could frustrate visitors and reduce our future web site traffic, which could have a material adverse effectplace significant demands on our business.

If we do not successfully implement any acquisition strategies, our operating resultsmanagement and prospects could be harmed.

We face competition within our industry for acquisitions of businesses, technologiesadministrative resources, including accounting and assets, and, in the future, such competition may become more intense. As such, even if we are able to identify an acquisition that we would like to consummate, we may not be able to complete the acquisition on commercially reasonable terms or at all because of such competition. Furthermore, if we enter into negotiations that are not ultimately consummated, those negotiations could result in the diversion of management time and significant out-of-pocket costs. Even if we are able to complete such acquisitions, we may additionally expend significant amounts of cash or incur substantial debt to finance them, which indebtedness could result in restrictions on our business and use of available cash. In addition, we may finance or otherwise complete acquisitions by issuing equity or convertible debt securities, which could result in dilution of our existing stockholders. If we fail to evaluate and execute acquisitions successfully, we may not be able to realize their benefits.tax resources. If we are unable to successfully address anyconclude that our internal control over financial reporting is effective, our investors could lose confidence in the accuracy and completeness of these risks,our financial reports.

If securities analysts and other industry experts do not publish research or publish negative research about our business, financial conditionour stock price and trading volume could decline.

The trading market for our common stock depends in part on the research, reports and other media that securities analysts and other industry experts publish about us or operating resultsour business. If security analysts do not cover our stock, downgrade our stock or publish negative research about our business, our stock price could be harmed.decline. If analysts do not cover us in the future or fail to publish reports on us regularly, we could lose visibility in the stock market and demand for our stock could decrease, which could cause our stock price or trading volume to decline. If one or more industry analysts publish negative statements about our business, our stock price could decline.


 

Because we are a small company,

Provisions in our amended and restated articles of incorporation limiting the requirementsliability of being a public company, including compliance withmanagement to stockholders.

We have adopted provisions, and will maintain provisions, to our amended and restated articles of incorporation that limit the reporting requirements of the Exchange Act and the requirements of the Sarbanes-Oxley Act and the Dodd-Frank Act, may strain our resources, increase our costs and distract management, and we may be unable to comply with these requirements in a timely or cost-effective manner.

As a public company with listed equity securities, we must comply with the federal securities laws, rules and regulations, including certain corporate governance provisions of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act and the Dodd-Frank Act, related rules and regulations of the SEC, with which a private company is not required to comply. Complying with these laws, rules and regulations will occupy a significant amount of timeliability of our directors, and managementprovide for indemnification by us of our directors and will significantly increaseofficers to the fullest extent permitted by Nevada law. Our amended and restated articles of incorporation and Nevada law provide that directors have no personal liability to third parties for monetary damages for actions taken as a director, except for breach of duty of loyalty, acts or omissions not in good faith involving intentional misconduct or knowing violation of law, unlawful payment of dividends or unlawful stock repurchases, or transactions from which the director derived improper personal benefit. Such provisions limit the stockholders’ ability to hold directors liable for breaches of fiduciary duty and reduce the likelihood of derivative litigation against directors and officers.

Certain of our costsoutstanding warrants include anti-dilutive rights.

Certain of our outstanding warrants include anti-dilution rights, which provide that if at any time while such warrants are outstanding, we issue or enter into an agreement to issue, or are deemed to have issued or entered into an agreement to issue (which includes the issuance of securities convertible or exercisable for shares of our common stock), securities for consideration less than the then current exercise price of such warrants, the exercise price of such warrants shall be automatically reduced to the lowest price per share of consideration provided or deemed to have been provided for such securities. As of May 31, 2022, there were warrants to purchase an aggregate of 14,430,908 shares of our common stock that include the foregoing anti-dilution provisions outstanding, consisting of (i) 2021 Warrants to purchase 14,240,508 shares of common stock, which 2021 Warrants currently have an exercise price of $1.97 per share (the “Floor Price”), and expenses,(ii) warrants to purchase 190,400 shares of common stock that we issued to certain institutional investors on October 2, 2018 (the “2018 Warrants”), which 2018 Warrants currently have an exercise price of $2.00 per share. Unless and until we cannot estimate accurately at this time. Among other things,received shareholder approval to reduce the exercise price of the 2021 Warrants below the Floor Price, no such adjustment to the exercise price of the 2021 Warrants may be made. Although we must:

establish and maintain a system of internal control over financial reporting in compliance with the requirements of Section 404 of the Sarbanes-Oxley Act and the related rules and regulations of the SEC and the Public Company Accounting Oversight Board;
prepare and distribute periodic public reports in compliance with our obligations under the federal securities laws;
maintain various internal compliance and disclosures policies, such as those relating to disclosure controls and procedures and insider trading in our common stock;
involve and retain to a greater degree outside counsel and accountants in the above activities;
maintain a comprehensive internal audit function; and
maintain an investor relations function.

In addition, being a public companyhave not received stockholder approval to remove the Floor Price of the 2021 Warrants to date, we have agreed to hold special meetings of our stockholders every three months, for so long as the 2021 Warrants remain outstanding, to obtain such stockholder approval. Pursuant to the terms of the 2018 Warrants, the exercise price thereof may not be reduced below $0.57 per share. Adjustments to the exercise price of the 2018 Warrants are not subject to these rulesapproval by our stockholders.

In the event that shareholder approval of removal of the Floor Price is obtained during the term of the 2021 Warrants, the subsequent sale of any shares in this offering at a price below $1.97 per share will result in an automatic reduction of the exercise price of the 2021 Warrants to a price equal to the lowest price at which such shares are sold. In the event that any such sale occurs prior to shareholder approval of removal of the Floor Price, the exercise price of the 2021 Warrants will be reduced to the lowest price of any such prior sales effective immediately upon receipt of shareholder approval. Additionally, the sale of any shares in this offering at a price below $2.00 per share will result in an automatic reduction of the exercise price of the 2018 Warrants to a price equal to the lowest price at which such shares are sold, subject to a floor of $0.57 per share.

You will experience further dilution if we issue additional equity securities in the future.

In order to raise additional capital, we may in the future offer additional shares of our common stock or other securities convertible into or exercisable or exchangeable for our common stock. We cannot assure you that we will be able to sell shares or other securities in any other offering at a price per share that is equal to or greater than the price per share paid by investors in this offering, and regulations may require usinvestors purchasing shares or other securities in the future could have rights superior to accept less directorexisting stockholders. To the extent that outstanding warrants are exercised, investors purchasing our common stock in this offering will experience further dilution.

Sales of a substantial number of shares of our common stock in the public market could cause our stock price to fall.

Future sales of substantial amounts of our common stock (including in this offering), or securities convertible or exchangeable into shares of our common stock, into the public market, including shares of our common stock issued upon exercise of options and officer liability insurance coverage than we desirewarrants, or the perception that those sales could occur, could adversely affect the prevailing market price of our common stock and our ability to incur substantial costs to obtain coverage.raise capital in the future. Additionally, the market price of our common stock could decline as a result of sales by, or the perceived possibility of sales by, our existing stockholders of shares of our common stock in the market after this offering. These factors couldsales might also make it more difficult for us to attractsell equity securities at a time and retain qualified membersprice that we deem appropriate.


We do not intend to pay dividends on our common stock for the foreseeable future.

We have never paid cash dividends on our common stock and do not anticipate paying any cash dividends on our common stock for the foreseeable future. Investors should not rely on an investment in us if they require income generated from dividends paid on our capital stock. Because we do not intend to pay dividends on our common stock, any income derived from our common stock would only come from a rise in the market price of our board of directors.

common stock, which is uncertain and unpredictable.


Item 1B. Unresolved Staff Comments

Not applicable.None.

Item 2. Properties

The Company leases its office space and certain office equipment under non-cancellable operating leases.

The Company leased 2,500 square feet of office space at 2893 Executive Park Drive Suite 201, Weston, Florida 33331, from April 15, 2018, through February 28, 2021, which it usedleases are located as its headquarters. Monthly rental costs for the periods ending April 14, 2019, 2020 and 2021, were $6,243, $6,492 and $6,781, respectively.follows.

Location Commencement date Expiration date Lease term (Year)  Total payment for FYE2022
(in million $)
  Right-of-use assets value as of Feb 28, 2022
(in million $)
 
Sawgrass, Florida March 2021 July 2028  7  0.14  1.0 
San Juan, Puerto Rico September 2021 September 2026  5  0.04  0.3 
Thailand September 2021 October 2024  3  0.06  0.4 
Switzerland April 2021 March 2026  5  0.07  0.3 
Belgium May 2022 April 2029  9  0.18  1.2 

On March 1, 2021 the Company moved into a new 5,962 square feet facility located at 1560 Sawgrass Corporate Parkway Suite 130 Sunrise, FL 33323. On January 4, 2021, the Company made a payment of $188,061 to Sunrise Sawgrass LLC for a security and rent deposit relating to the new office space. The term of the lease, which commenced on March 1, 2021, will expire on the last day of the 89th month following the commencement date (i.e., August 31, 2028). Monthly rent under the lease increases each year during the term of the lease, from between $11,160 per month (for the first year of the lease), to $13,734 during the last year of the lease term. Annual rental costs for the periods ending February 28, 2022, 2023, and February 29, 2024 are $75,094, $209,989 and $226,342, respectively. The Company has received 12 months of rent abatement for FYE 2022 in the amount of $133,920 and 1 month for FYE 2023, in the amount of $11,160.

On October 1, 2019, the Company entered a new contract for a new call/support center, totaling approximately 4,048 square feet, at 6345 South Pecos Road, Suites 206, 207, and 208, Las Vegas, Nevada 89120. The lease had a term of one year from October 1, 2019 through September 30, 2020. Monthly base rental costs were (i) $ 3,643 from October 1, 2019 through November 30, 2019; and (ii) $3,789 from December 1, 2019 through September 30, 2020. The rent also included the monthly payment of the operating expenses (Tenant’s Proportionate Share of the Building and/or Project) which was approximately $1,100 per month. We did not renew this lease. As of February 28, 2021, the Call Center previously in Las Vegas was moved to the Company’s new facility in Sunrise, Florida.

Item 3. Legal Proceedings

From time to time, we may become party to litigation or other legal proceedings that we consider to be a part of the ordinary course of our business.

Such current litigation or other legal proceedings, if any, are described in, and incorporated by reference in, this “Item 3. Legal Proceedings” of this Annual Report on Form 10-K from, Part“Part II—Item 8. Financial Statements and Supplementary DataData” in the Notes to Consolidated Financial Statements in Note“Note 12 – Commitments and ContingenciesContingencies”, under the heading Legal Matters“Legal Matters”. The Company believes that the resolution of any currently pending matters will not individually or in the aggregate have a material adverse effect on our financial condition or results of operations. However, assessment of the current litigation, if any, or other legal claims could change in light of the discovery of facts not presently known to the Company or by judges, juries or other finders of fact, which are not in accord with management’s evaluation of the possible liability or outcome of such litigation or claims.

Additionally, the outcome of litigation is inherently uncertain. If one or more legal matters were resolved against the Company in a reporting period for amounts in excess of management’s expectations, the Company’s financial condition and operating results for that reporting period could be materially adversely affected. The Company settled certain matters subsequent to the year ended February 28, 2021,2022, that did not individually or in the aggregate have a material impact on the Company’s financial condition or operating results.results except as disclosed in this Report.

Item 4. Mine Safety Disclosures

Not applicable.

 65


 

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Information

Our common stock trades on the NASDAQNasdaq Capital Market under the ticker symbol MKGI“NXTP”.

Holders

Holders

As of June 7, 2021,May 31, 2022, there were approximately 438510 holders of record of our common stock. Because many of our shares of common stock are held by brokers and other institutions on behalf of stockholders, this number of record stockholders is not indicative of the total number of stockholders of the Company when including securities beneficially owned.

Dividends

To date, we have not declared or paid any dividends on our outstanding shares.shares of common stock. We currently do not anticipate paying any cash dividends in the foreseeable future on our common stock. Although we intend to retain our earnings to finance our operations and future growth, our board of directors will have discretion to declare and pay dividends in the future. Payment of dividends in the future will depend upon our earnings, capital requirements and other factors, which our board of directors may deem relevant.

There are no restrictions in our Articles of Incorporation or Bylaws that prevent us from declaring dividends. The Nevada Revised Statutes, however, do prohibit us from declaring dividends where after giving effect to the distribution of the dividend:

1.We would not be able to pay our debts as they become due in the usual course of business, or;

1.       We would not be able to pay our debts as they become due in the usual course of business, or;

2.Our total assets would be less than the sum of our total liabilities plus the amount that would be needed to satisfy the rights of stockholders who have preferential rights superior to those receiving the distribution.

2.      Our total assets would be less than the sum of our total liabilities plus the amount that would be needed to satisfy the rights of stockholders who have preferential rights superior to those receiving the distribution.

Transfer Agent

Our stock transfer agent is Colonial Stock Transfer Co, Inc. (“Colonial”), 66 Exchange Place, 1st floor, Salt Lake City, UT 84111. Colonial’s telephone number in the U.S. is (801) 355-5740 and their internet address is www.colonialstock.com.

Recent Issuances of Unregistered Securities

There have been no sales of unregistered securities during and from the period from DecemberMarch 1, 20202021 to the filing date of this report,Report, which have not previously been disclosed in a Quarterly Report on Form 10-Q or in a Current Report on Form 8-K, except as set forth below:8-K.

On September 1, 2020,Issuer Purchases of Equity Securities

Pursuant to the IP Purchase Amendment, on May 19, 2021, the Company entered into a consulting agreement with Beachfront Travel Consulting LLC for their services and expertise in Call Center and Sales Operations. The consultant agreed to assistmade initial payment of $500,000. Thereafter, the Company in the development and design of a Call Center Operation to support the Company’s brand. The Company agreed to pay the consultant compensation of 1,500 restrictedfirst 344,400 shares of common stock per month, with a price equal to the closing price on the last day of the month and the consultant agreed to adviserepurchased by the Company on policiesamounted to $771,456, which shares were returned to treasury and procedures, performance metrics and reporting, operational standards and training of call center staff. The Company issued the consultant 1,500 shares of restricted common stock for the month of December 2020. The agreement was terminated on December 7, 2020, and the parties entered into as a new consulting agreement, with an annual fee of $110,000 instead of the 1,500 per month stock compensation.

cancelled.


On or around January 15, 2021, a warrant holder exercised warrants to purchase 15,000 shares of the Company’s common stock and paid the aggregate exercise price of $30,000 ($2.00) per share. The shares underlying the warrants were registered on a Form S-3 registration statement.

On January 22, 2021, the Company issued an aggregate of 185,000 shares of restricted common stock to various consultants in consideration for investor relations related services.

On February 4, 2021, the Company issued an aggregate of 50,000 shares of restricted common stock to a consultant in consideration for investor relations related services.

On March 31, 2021, the Company issued 17,500 shares of common stock to an employee for services rendered.

We claim an exemption from registration for the issuances described above pursuant to Section 4(a)(2) and/or Rule 506(b) of Regulation D of the Securities Act, since the foregoing issuances did not involve a public offering, the recipients were (a) “accredited investors”; and/or (b) had access to similar documentation and information as would be required in a Registration Statement under the Securities Act. The securities were offered without any general solicitation by us or our representatives. No underwriters or agents were involved in the foregoing issuances and we paid no underwriting discounts or commissions. The securities are subject to transfer restrictions, and the certificates evidencing the securities will contain an appropriate legend stating that such securities have not been registered under the Securities Act and may not be offered or sold absent registration or pursuant to an exemption there-from. The securities were not registered under the Securities Act and such securities may not be offered or sold in the United States absent registration or an exemption from registration under the Securities Act and any applicable state securities laws.

Issuer Purchases of Equity Securities

During the yearsyear ended February 28, 20212022, the Company purchased 5,070,000 shares for investment in subsidiaries valued at $10,140,000 pursuant to the Preferred Exchange Agreement (see Note 4 – Acquisitions and February 29, 2020, there were no repurchasesDispositions), which was considered as subsidiary’s ownership interest in Parent (Reciprocal Interest) in accordance with ASC 810, the Company reflected such transaction as a repurchase of shares and have been eliminated in the Company’s common stock by the Company.consolidated financial reporting.


 

Description of Common Stock

We have authorized capital stock consisting of 500,000,000 shares of common stock, $0.00001 par value per share and 100,000,000 shares of preferred stock, $0.00001 par value per share.

The following summary of certain provisions of our common stock does not purport to be complete. You should refer to our Articles of Incorporation (as amended) and our Bylaws (as amended), both of which have been filed with the SEC, and have been incorporated by reference as exhibits to this Report. The summary below is also qualified by provisions of applicable law.

Each share of our common stock is entitled to equal dividends and distributions per share with respect to the common stock when, as and if declared by our board of directors. No holder of any shares of our common stock has a pre-emptive right to subscribe for any of our securities, nor are any shares of our common stock subject to redemption or convertible into other securities. Upon liquidation, dissolution or winding-up of the Company, and after payment to our creditors and preferred stockholders, if any, our assets will be divided pro rata on a share-for-share basis among the holders of our common stock. Each share of our common stock is entitled to one vote on all stockholder matters. Shares of our common stock do not possess any cumulative voting rights.

The presence of the persons entitled to vote of 33 1/3% of the outstanding voting shares on a matter before the stockholders constitutes the quorum necessary for the consideration of the matter at a stockholders’ meeting.

Except as otherwise required by law, the Articles of Incorporation, or any certificate of designations, (i) at all meetings of stockholders for the election of directors, a plurality of votes cast are sufficient to elect such directors; (ii) any other action taken by stockholders are be valid and binding upon the Company if the number of votes cast in favor of the action exceeds the number of votes cast in opposition to the action, at a meeting at which a quorum is present, except that adoption, amendment or repeal of the Bylaws by stockholders requires the vote of a majority of the shares entitled to vote; and (iii) broker non-votes and abstentions are considered for purposes of establishing a quorum but not considered as votes cast for or against a proposal or director nominee. Each stockholder has one vote for every share of stock having voting rights registered in his or her name, except as otherwise provided in any preferred stock designation setting forth the right of preferred stock stockholders.


The common stock does not have cumulative voting rights, which means that the holders of 51% of the common stock voting for election of directors can elect 100% of our directors if they choose to do so.

Description of Preferred Stock

Shares of preferred stock may be issued from time to time in one or more series, each of which shall have such distinctive designation or title as shall be determined by our board of directors prior to the issuance of any shares thereof. Preferred stock shall have such voting powers, full or limited, or no voting powers, and such preferences and relative, participating, optional or other special rights and such qualifications, limitations or restrictions thereof, as shall be stated in such resolution or resolutions providing for the issue of such class or series of preferred stock as may be adopted from time to time by the board of directors prior to the issuance of any shares thereof.

The powers, preferences and relative, participating, optional and other special rights of each class or series of preferred stock, and the qualifications, limitations or restrictions thereof, if any, may differ from those of any and all other series at any time outstanding. 

Series A Convertible Preferred Stock

The holders of record of shares of Series A Preferred Stock are entitled to vote on all matters submitted to a vote of the stockholders of the Company and are entitled to one hundred (100) votes for each share of Series A Preferred Stock. Each share of Series A Preferred Stock is redeemable at $1.00 per share. The Series A Preferred Stock is entitled to a 10% annual dividend, payable as, when and if, declared by the board of directors, payable on the first day of April, July, October and January.

Per the terms of the Amended and Restated Certificate of Designations relating to the Series A Preferred Stock, subject to the availability of authorized and unissued shares of Series A Preferred Stock, the holders of Series A Preferred Stock may, by written notice to the Company:

● 

elect to convert all or any part of such holder’s shares of Series A Preferred Stock into common stock at a conversion rate of the lower of:

(a) $62.50 per share; or
(b) at the lowest price the Company has issued stock as part of a financing.
convert all or part of such holder’s shares (excluding any shares issued pursuant to conversion of unpaid dividends) into debt obligations of the Company, secured by a security interest in all of the assets of the Company and its subsidiaries, at a rate of $62.50 of debt for each share of Series A Preferred Stock.

In the event of any liquidation, dissolution or winding up of this Company, either voluntary or involuntary (any of the foregoing, a “liquidation”), holders of Series A Preferred Stock shall be entitled to receive, prior and in preference to any distribution of any of the assets of this Company to the holders of the common Stock or any other series of preferred stock by reason of their ownership thereof an amount per share equal to $1.00 for each share (as adjusted for any stock dividends, combinations or splits with respect to such shares) of Series A Preferred Stock held by each such holder, plus the amount of accrued and unpaid dividends thereon (whether or not declared) from the beginning of the dividend period in which the liquidation occurred to the date of liquidation. Additionally, each holder of Series A Preferred Stock holds a security interest in substantially all of our assets in order to secure our obligations in connection with such Series A Preferred Stock.


On July 9, 2013, the Company amended the Certificate of Designations for the Company’s Series A Preferred Stock to allow for conversion into Series C Preferred stock to grant to a holder of the Series A Preferred Stock the option to:

●           elect to convert all or any part of such holder’s shares of Series A Preferred Stock into shares of the Company’s Series C Convertible Preferred Stock, par value $0.00001 per share (which has since been withdrawn and is no longer designated), at a conversion rate of five (5) shares of Series A Preferred Stock for every one (1) share of Series C Preferred Stock; or to allow conversion into common stock at the lowest price the Company has issued stock as part of a financing to include all financings such as new debt and equity financing and stock issuances as well as existing debt conversions into stock.

On February 28, 2014, the Company’s Series A Preferred Stock stockholders agreed to authorize a change to the Certificate of Designations of the Series A Preferred Stock to lock the conversion price to the lower of (a) a fixed price of $2.50 per share; and (b) the lowest price the Company has issued stock as part of a financing after January 1, 2006.

Except for transfers to family members, or trusts for the benefit of Series A Preferred Stock holders, no holder of Series A Preferred Stock is able to transfer his/her/its shares of Series A Preferred Stock.

There are currently no shares of Series A Preferred Stock issued or outstanding. 

Series B Convertible Preferred Stock

In connection with the Axion Exchange Agreement, Monaker filed a certificate of designation of its Series B Convertible Preferred Stock with the Secretary of State of Nevada on November 13, 2020, which was amended and restated by an amended and restated certificate of designation of its Series B Convertible Preferred Stock, filed with the Secretary of State of Nevada on January 8, 2021 (as amended and restated, the “Series B Designation”). The Series B Designation designated 10,000,000 shares of Series B Preferred Stock, $0.00001 par value per share (“Series B Preferred Stock”). The Series B Preferred Stock has the following rights:

Dividend Rights. The Series B Preferred Stock does not accrue dividends.

Liquidation Preference. The Series B Designation provides that the Series B Preferred Stock has a liquidation preference which is (a) pari passu with respect to the Company’s common stock and Series C Preferred Stock; and (b) junior to all current and future senior indebtedness of the Company. If the Company determines to liquidate, dissolve or wind-up its business and affairs, the Company will prior to or concurrently with the closing, effectuation or occurrence of any such action, pay the holders of the Series B Preferred Stock, pari passu with the holders of the Series C Preferred Stock and common stock, an amount equal to $0.9272121 per share, or $9,272,121 in aggregate.

Conversion Rights. Each share of Series B Preferred Stock is automatically convertible on the Approval Date (defined below), into 0.74177 shares of common stock. For the purposes of the following sentence:

Approval Date” means the later of (a) the fifth business day after the approval by Monaker’s stockholders of the Axion Preferred Conversion; (b) the business day that the Company has affected a reverse stock split of its outstanding common stock subsequent to the approval by Monaker’s stockholders of the Axion Preferred Conversion, to the extent such reverse stock split is deemed necessary by a Majority In Interest (defined below); (c) the date that NASDAQ has approved the continued listing of the Company’s common stock on NASDAQ following the closing of the HotPlay Share Exchange; and (d) the closing of the HotPlay Share Exchange.

Majority In Interest” means holders holding a majority of the then aggregate shares of Series B Preferred Stock issued and outstanding or the majority of the then aggregate shares of Series C Preferred Stock issued and outstanding, depending on which class of preferred stock holders are approving such matter.

Additionally, the maximum number of shares of common stock to be issued in connection with the conversion of all of the outstanding shares of Series B Preferred Stock and Series C Preferred Stock shares (and upon conversion or exercise of any other securities required to be aggregated with the Series B Preferred Stock and Series C Preferred Stock shares pursuant to the applicable rules and requirements of NASDAQ), cannot exceed such number of shares of common stock that would violate applicable listing rules of NASDAQ in the event the Company’s stockholders do not approve the issuance of the common stock issuable in connection with such conversion.


Voting Rights. The Series B Preferred Stock have no voting rights on general matters to come before the stockholders of the Company; however, the Company is prohibited from undertaking any of the following actions without the approval of a Majority In Interest:

(a)       Increasing or decreasing (other than by redemption or conversion) the total number of authorized shares of Series B Preferred Stock;

(b)       Re-issuing any shares of Series B Preferred Stock converted pursuant to the terms of the Series B Designation;

(c)       Effecting an exchange, reclassification, or cancellation of all or a part of the Series B Preferred Stock;

(d)       Effecting an exchange, or creating a right of exchange, of all or part of the shares of another class of shares into shares of Series B Preferred Stock;

(e)       Issuing any shares of Series B Preferred Stock other than pursuant to the Axion exchange agreement;

(f)       Altering or changing the rights, preferences or privileges of the shares of Series B Preferred Stock so as to affect adversely the shares of such series; or

(g)      Amending or waiving any provision of the Company’s articles of incorporation or bylaws relative to the Series B Preferred Stock so as to affect adversely the shares of Series B Preferred Stock in any material respect as compared to holders of other series of shares.

Redemption Rights. The Series B Preferred Stock does not have any redemption rights.

Series C Convertible Preferred Stock

In connection with the Axion exchange agreement, Monaker filed a certificate of designation of its Series C Convertible Preferred Stock with the Secretary of State of Nevada on November 13, 2020 (the “Series C Designation”). The Series C Designation, which was approved by the board of directors of the Company on November 12, 2020, designates 3,828,500 shares of Series C Preferred Stock, $0.00001 par value per share of the Company (“Series C Preferred Stock”). The Series C Preferred Stock has the following rights:

Dividend Rights. The Series C Preferred Stock does not accrue dividends.

Liquidation Preference. The Series C Designation provides that the Series C Preferred Stock has a liquidation preference which is (a) pari passu with respect to the Company’s common stock and Series B Preferred Stock; and (b) junior to all current and future senior indebtedness of the Company. If the Company determines to liquidate, dissolve or wind-up its business and affairs, the Company will prior to or concurrently with the closing, effectuation or occurrence any such action, pay the holders of the Series C Preferred Stock, pari passu with the holders of the Series B Preferred Stock and common stock, an amount equal to $2.00 per share, or $7,657,000 in aggregate.

Conversion Rights. Each share of Series C Preferred Stock is automatically convertible on the Approval Date (defined and described above under “Series B Convertible Preferred Stock”), into one share of common stock (adjustable for stock splits and similar recapitalizations).

Additionally, the maximum number of shares of common stock to be issued in connection with the conversion of all of the outstanding shares of Series C Preferred Stock and Series B Preferred Stock shares (and upon conversion or exercise of any other securities required to be aggregated with the Series C Preferred Stock and Series B Preferred Stock shares pursuant to the applicable rules and requirements of NASDAQ), cannot exceed such number of shares of common stock that would violate applicable listing rules of NASDAQ in the event the Company’s stockholders do not approve the issuance of the common stock issuable in connection with such conversion.


Voting Rights. The Series C Preferred Stock have no voting rights on general matters to come before the stockholders of the Company; however, the Company is prohibited from undertaking any of the following actions without the approval of a Majority In Interest:

(a)       Increasing or decreasing (other than by redemption or conversion) the total number of authorized shares of Series C Preferred Stock;

(b)       Re-issuing any shares of Series C Preferred Stock converted pursuant to the terms of the Series C Designation;

(c)       Effecting an exchange, reclassification, or cancellation of all or a part of the Series C Preferred Stock;

(d)       Effecting an exchange, or creating a right of exchange, of all or part of the shares of another class of shares into shares of Series C Preferred Stock;

(e)       Issuing any shares of Series C Preferred Stock other than pursuant to the A&R Axion Exchange Agreement;

(f)       Altering or changing the rights, preferences or privileges of the shares of Series C Preferred Stock so as to affect adversely the shares of such series; or

(g)      Amending or waiving any provision of the Company’s articles of incorporation or bylaws relative to the Series C Preferred Stock so as to affect adversely the shares of Series C Preferred Stock in any material respect as compared to holders of other series of shares.

Redemption Rights. The Series C Preferred Stock does not have any redemption rights.

Anti-Takeover Provisions Under the Nevada Revised Statutes

Certain provisions of Nevada law, and our Articles of Incorporation and our Bylaws, each as amended and subject, where applicable as described below, our opting out of certain provisions of Nevada law, contain provisions that could make the following transactions more difficult: acquisition of us by means of a tender offer; acquisition of us by means of a proxy contest or otherwise; or removal of our incumbent officers and directors. It is possible that these provisions could make it more difficult to accomplish or could deter transactions that stockholders may otherwise consider to be in their best interest or in our best interests, including transactions that might result in a premium over the market price for our shares.

These provisions, summarized below, are expected to discourage coercive takeover practices and inadequate takeover bids. These provisions are also designed to encourage persons seeking to acquire control of us to first negotiate with our board of directors. We believe that the benefits of increased protection of our potential ability to negotiate with the proponent of an unfriendly or unsolicited proposal to acquire or restructure us outweigh the disadvantages of discouraging these proposals because negotiation of these proposals could result in an improvement of their terms.

Business Combinations

Sections 78.411 to 78.444 of the Nevada revised statues (the “NRS”) prohibit a Nevada corporation from engaging in a “combination” with an “interested stockholder” for three years following the date that such person becomes an interested stockholder and place certain restrictions on such combinations even after the expiration of the three-year period. With certain exceptions, an interested stockholder is a person or group that owns 10% or more of the corporation’s outstanding voting power (including stock with respect to which the person has voting rights and any rights to acquire stock pursuant to an option, warrant, agreement, arrangement, or understanding or upon the exercise of conversion or exchange rights) or is an affiliate or associate of the corporation and was the owner of 10% or more of such voting stock at any time within the previous three years.


A Nevada corporation may elect not to be governed by Sections 78.411 to 78.444 by a provision in its Articles of Incorporation. We have such a provision in our Articles of Incorporation, as amended, pursuant to which we have elected to opt out of Sections 78.411 to 78.444; therefore, these sections do not apply to us.

Control Shares

Nevada law also seeks to impede “unfriendly” corporate takeovers by providing in Sections 78.378 to 78.3793 of the NRS that an “acquiring person” shall only obtain voting rights in the “control shares” purchased by such person to the extent approved by the other stockholders at a meeting. With certain exceptions, an acquiring person is one who acquires or offers to acquire a “controlling interest” in the corporation, defined as one-fifth or more of the voting power. Control shares include not only shares acquired or offered to be acquired in connection with the acquisition of a controlling interest, but also all shares acquired by the acquiring person within the preceding 90 days. The statute covers not only the acquiring person but also any persons acting in association with the acquiring person.

A Nevada corporation may elect to opt out of the provisions of Sections 78.378 to 78.3793 of the NRS. We have no provision in our Articles of Incorporation pursuant to which we have elected to opt out of Sections 78.378 to 78.3793; therefore, these sections do not apply to us.

Removal of Directors

Section 78.335 of the NRS provides that 2/3rds of the voting power of the issued and outstanding shares of the Company are required to remove a director from office. As such, it may be more difficult for stockholders to remove directors due to the fact the NRS requires greater than majority approval of the stockholders for such removal.

Undesignated Preferred Stock

The ability to authorize undesignated preferred stock pursuant to our Articles of Incorporation, as amended, will make it possible for our board of directors to issue preferred stock with voting or other rights or preferences that could impede the success of any attempt to change control of us. These and other provisions may have the effect of deterring hostile takeovers or delaying changes in control or management of the Company.

Item 6. Selected Financial Data[Reserved]


 

A registrant such as the Company, that qualifies as a smaller reporting company, as defined by §229.10(f)(1), is not required to provide the information required by this Item.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of the financial condition and results of our operations should be read in conjunction with the consolidated financial statements and related notes included elsewhere in this filing. In addition to historical consolidated financial information, the following discussion contains forward-lookingforward- looking statements that reflect our plans, estimates and beliefs. These statements involve risks and uncertainties and our actual results could differ materially from those discussed below. See Cautionary“Cautionary Note Regarding Forward-Looking StatementsStatements” above for a discussion of the uncertainties, risks and assumptions associated with these statements. See also the disclosures under Item“Item 1A. Risk FactorsFactors”, above for additional discussion of such risks.

Growth Opportunities and Trends

Our ability to further grow our travel revenue will depend largely on increasing the number of distributors and suppliers, number of units, and revenue per listing for our Booking Engine; increasing the number of subscriptions on our NextTrip Business platform, and increasing the number and dollar value of our bookings in our leisure product.


Our achievement of these objectives will further depend on our ability to successfully enable more online bookable listings. Achieving growth in the number of distributors and the number of listings involves our ability to (i) increase our listing renewal rates, (ii) reach new distributors, property managers and owners through marketing activities, and/or (iii) obtain new listings through geographic expansion, strategic acquisitions, or investments. Increasing revenue per listing and revenue from other products and services will involve our ability to successfully drive more bookings and to successfully introduce new products to our marketplace.

In the future, we believe it will become more important to increase marketing investments to grow and further advertise our brand and products to distributors and travelers. We have seen other companies launch online businesses offering ALRs or other alternatives to hotels and we believe this growing favorable awareness of alternatives to hotels will support growth in our business. However, we have also seen a trend of increased government regulation and taxation of the industry. We continue to monitor the effects of these trends and will take actions as necessary to mitigate their effects.

Novel Coronavirus (COVID-19)

The COVID-19 pandemic, and governmental responses thereto, including travel restrictions, ‘stay-at-home’ orders and required social distancing orders, have severely restricted the level of economic activity around the world, and is having an unprecedented effect on the global travel industry. Additionally, the ability to travel has been curtailed through border closures, mandated travel restrictions and limited operations of hotels, airlines, and may be further limited through additional voluntary or mandated closures of travel-related businesses.

The measures implemented to contain the COVID-19 pandemic have had, and are expected to continue to have, a significant negative effect on our business, financial condition, results of operations, cash flows and liquidity position. In particular, such measures have led to unprecedented levels of cancellations and limited new travel bookings. Moreover, any additional measures or changes in laws or regulations, whether in the United States or other countries, that further impair the ability or desire of individuals to travel, including laws or regulations banning travel, requiring the closure of hotels or other travel-related businesses (such as restaurants) or otherwise restricting travel due to the risk of the spreading of COVID-19, may exacerbate the negative impact of the COVID-19 pandemic on our business, financial condition, results of operations, cash flows and liquidity position.

The duration and severity of the COVID-19 pandemic are uncertain and difficult to predict at this time. The pandemic could continue to impede global economic activity for an extended period of time, even as restrictions are being lifted in many jurisdictions (including the United States) and vaccines are being made available, leading to decreased per capita income and disposable income, increased and sustained unemployment or a decline in consumer confidence, all of which could significantly reduce discretionary spending by individuals and businesses on travel and may create a recession in the United States or globally. In turn, that could have a negative impact on demand for our services. We also cannot predict the long-term effects of the COVID-19 pandemic on our partners and their business and operations or the ways that the pandemic may fundamentally alter the travel industry. The aforementioned circumstances could result in a material adverse impact on our business, financial condition, results of operations and cash flows, potentially for a prolonged period.

Although we currently cannot predict the full impact of the COVID-19 pandemic on our fiscal 2022 financial results relating to our operations, we anticipate an increase in year-over-year revenue as compared to fiscal year 2021 ended February 28, 2021. However, the ultimate extent of the COVID-19 pandemic and its impact on global travel and overall economic activity is constantly changing and impossible to predict currently. Separately, our capital requirements may increase in the near term and long-term due to the impact of the COVID 19 pandemic, the resulting reduced demand for travel services, the increases in cancellations and re-bookings, and the extent to which such pandemic may further impact the ability of our customers to fulfill their payment obligations.

As a result of the above, in the event the HotPlay Share Exchange described above does not close timely, if at all, and/or if the HotPlay Share Exchange is terminated, we may be forced to scale back our operations, adjust our plan of operations, borrow or raise additional funding, which may not be available on favorable terms if at all. In the event we require and are unable to raise additional funding in the future, we may be forced to seek bankruptcy protection.


Recent Significant Funding Transactions

During the 2022 fiscal year, the Company received funding from;

On November 23, 2020,Cash injection from HotPlay through the Company borrowed $3.5reverse acquisition amounted to $12 million (2021 fiscal year: amounted to $3 million).

Public Offering of $36.4 million net of placement agent fees and related offering expenses.

Loans from Streeterville amounted to $9.3 million net of finance cost and in March 2021, the Company borrowed an additional $8.4 million from Streeterville. On May 26, 2021, Streeterville funded an additional $1.4 million to the Company.

On September 1, 2020, September 18, 2020, September 30, 2020, on or around November 2, 2020, and on November 24, 2020, and on around December 28, 2020 and on and around January 6, 2021 HotPlay advanced Monaker $300,000, $700,000, $1,000,000, $400,000, $100,000, $450,000, $50,000 respectively, under the terms of the HotPlay Exchange Agreement. On March 16, 2021, March 19, 2021, and April 15, 2021, HotPlay loaned the Company $9 million, $1 million and $2 million, respectively. The loans were made pursuant to the terms of the HotPlay Exchange Agreement and were evidenced by Convertible Promissory Notes dated effective March 16, 2021, March 19, 2021, and April 15, 2021, in the amount of $9,000,000, $1,000,000, and $2,000,000 respectively. The advances were evidenced by HotPlay Convertible Notes in the amount of each advance, and an effective date as of the date of each advance. The HotPlay Convertible Notes totaled $3.0 million as of February 28, 2021 and $15 million as of the date of this Report.

On December 29, 2020, the Company engaged Kingswood Capital and Aegis Capital Corp. as underwriters for a public offering of 3,080,000 shares of common stock with an offering price of $2.50. The offering was fully subscribed, and the Company received $7,700,000. On January 13, 2021, the underwriters exercised their option and sold the additional 462,000 shares at $2.50 per share. The Company received $1,155,000 in connection with the over-allotment exercise.
On May 13, 2021, the Company sold an aggregate of 3,714,500 shares of common stock in a public offering with an offering price of $2.50. The offering was fully subscribed, and the representative of the underwriters, Kingswood, exercised its over-allotment option in full. The Company received approximately $8.5 million as a result of the offering.bank fees.

Additionally, we were significantly dependent during the year ended February 28, 2021, on funds provided by our Chairman, as described in greater detail under “Item 8. Financial Statements and Supplementary Data” – “Note 10 – Related Party Promissory Notes and Transactions”.

Key Financial Highlights

Key financial highlights for the fiscal year ended (FYE)(“FYE”) February 28, 20212022 include the following:

Travel and commission revenues were $48,338, compared to $441,769 for the FYE February 29, 2020, a decrease of 89.1%;

Net loss attributable to the consolidated group was approximately $16.5 million, or $(1.12) per basic and diluted share for the FYE February 28, 2021, compared to a net loss of approximately $9.5 million or $(0.80) per basic and diluted share for the FYE February 29, 2020;

Cash used in operating activities was approximately $7.4 million for the FYE February 28, 2021, compared to cash used in operating activities of approximately $4.9 million for the FYE February 29, 2020;

Cash used in investing activities was approximately $2.2 million for the FYE February 28, 2021 compared to cash provided in investing activities of approximately $1.8 million for the FYE February 29, 2020;
Cash provided by financing investing activities was approximately $12.3 million for the FYE February 28, 2021 compared to cash provided by financing activities of approximately $3.3 million for the FYE February 29, 2020;


 There was a net increase

Achieved record annually revenue of $8.2 million, compares very favorably to $0 revenue in cashthe last year.

Consolidated gross profit totaled $5.9 million or 71% of approximately $2,478,482 for the FYE February 28, 2021,total revenue compared to an increasenone in cash of approximately $129,527 for the FYE February 29, 2020; andlast year.

 

As of February 28, 2022 and 2021, we have total assets of $99.8 million and $11.5 million, respectively, according to the reverse merger and additional acquisitions in Reinhart Interactive TV AG and Zappware N.V. and NextBank International.

Cash and cash equivalents as of 28 February 28,2022 and 2021, was approximately $2,640,988.$6.6 million and $0.4 million, respectively, increased mainly for ongoing operating expenses and roll out new Fintech and Media activities.

RESULTS OF OPERATIONS

ResultsThe balance as of Operations for the Fiscal Year Ended February 28, 2021, Compared torepresents Hotplay Enterprise Limited as it was before the Fiscal Year Ended February 29, 2020reverse acquisition transaction.

Revenues

Total travelKey Operational Highlights and commission revenues decreased 89.1% to $48,338 for the fiscal year ended (FYE) February 28, 2021, compared to $441,769 for the FYE February 29, 2020, a decrease of $393,431. The decrease is mainly attributable to COVID-19 and its impact on the travel industry which was felt due to many international locations not being open for travel and tourism, cruise lines not operating, general travel restrictions as well as stay-at-home orders for most of the world.subsequent period

Cost of Revenues

We had cost of revenues of $43,204 for the year ended February 28, 2021, compared to $352,963 for the year ended February 29, 2020, which decreased similarly to the decrease in revenues over the same period driven mainly by the impacts of COVID-19.

Operating Expenses

Our operating expenses, including technology and development, salaries and benefits, selling and promotion, amortization of intangibles and general and administrative expenses, increased 32.3% to $7,974,383Key operational highlights for the FYE February 28, 2021, compared to $6,056,421 for2022 include the fiscal year ended February 29, 2020, an increasefollowing:

Completed merger with HotPlay Enterprises and rebranded the company as NextPlay Technologies.

Reinhart Interactive TV, a NextPlay-funded strategic partnership, acquired award-winning Interactive TV provider, Zappware, founded in 2001 by former employees of Philips Media.

Acquired controlling interest in International Financial Enterprise Bank (IFEB), a global financial institution.

Company’s licensed Longroot digital token offering platform engaged to serve as the financial advisor and underwriter for Ample’s proposed security token offering (STO).

Entered into an agreement to acquire from Fighter Base Publishing the assets and AI-powered video game development platform of its wholly owned division, Make It Games™, which was closed subsequent to the fiscal yearend.

Entered into an agreement with Token IQ to acquire 100% of its assets,  including intellectual property designed to reconcile legal and regulatory requirements around digital assets, including Know Your Customer, Anti-money laundering and shareholder rights enforcement, all common pain points within the crypto markets today, which was closed subsequent to the fiscal year end.

In November 2021, the Company received conditional approvals for insurance and reinsurance licenses. The licensing enables NextPlay’s NextShield LTD business unit to establish digital primary insurance and reinsurance operations and to offer blockchain-delivered products like parametric comprehensive travel insurance and bank deposit insurance.


Announced the signing of a Memorandum of Understanding with Alphabit Consulting Pte Ltd to provide deposit accounts and payment cards for their cryptocurrency exchange users.

Announced the signing of a Memorandum of Understanding with TruCash Group of Companies Inc, a leading global payments provider. Through the proposed partnership, NextBank plans to offer payment services including Payment Cards, such as Debit and Credit cards, Mobile Wallets, and Mobile Payments.

Announced the signing of a preliminary agreement with Decentralised Investment Group (“DIG”), a leading global blockchain technology company, to develop and operate an exclusive fiat payment platform for DIG customers, enabling them to purchase and monetize DIG assets.

Acquired goPlay assets including a new-gen game publishing platform featuring a tournament system, chat, payment, and 37 casual games ranging from arcade to strategy. NextPlay plans to complete the integration of its HotPlay in-game advertising (IGA) technology into the 37 goPlay games by year-end. The Asset purchase also included a perpetual license to goPay, a payment aggregator that offers game developers multiple ways to more easily collect and process user payments through carrier billing, over the counter, e-voucher, bank transfer and e-wallet transfers.

Launched NextPlay X Soma Labs, an innovation and design platform bringing together non-fungible tokens (NFTs), social games, and Metaverse virtual worlds for major brands, creators, and agencies.

Announced the MedTrek Fund, a blockchain securitized closed-end fund focused on building medical facilities designed to lower the likelihood of infection for four medical asset classes including primary care, tertiary care, long term care and resort convalescent facilities.

Appointed Mark Vange, an industry leader in video game development and in-game advertising and former chief technology officer of Electronic Arts Interactive,  as chief technology officer of the Company.

Appointed Andrew Greaves, a senior level executive with experience leading gaming eSports and digital media companies, as Chief Operating Officer of the Company.

Results of $1,917,962. The increase in operating expenses were driven by a $924,901 increase in general and administrative expenses, primarily due to an increase in Professional Legal feesOperations

Result of approximately $1,070,216 related to the IDS and Axion matters; an increase in salaries and benefits of $990,886; an increase in selling and promotion expense of $326,303; and an increase in stock-based compensation of $256,332 and an increase of $211,510 in depreciation and amortization which were partially offset by a $791,970 decrease in technology and development expenses.

Other Income (Expenses)

Other income/(expense) includes gain on sale of assets, valuation gain/(loss), interest expense, loss on legal settlement, contract settlement expenses, realized gain/(loss) on sale of unconsolidated affiliates and non-controlling interest in consolidated affiliates. Total other expenses increased to $8,539,405 for FYE February 28, 2021, as compared to $3,487,071 for FYE February 29, 2020 or a change of $5,052,334. The increased expenses were mainly due to $551,763 of realized losses on the sale of unconsolidated affiliates for the FYE of February 28, 2021 as compared to realized gains on the sale of unconsolidated affiliates of $1,984,870operations for the FYE February 28, 2020, or a decrease2022 compared to 2021 (of HotPlay) are as follows:

Revenue

Total revenue amounted to $8.2 million, compares very favorably to $0 revenue in the last year of HotPlay. Zappware N.V. achieved $4.5 million revenue from subscription services and $2.0 million revenue from product development as a result from high demand in digital media content, NextBank International generated $1.6 million revenue from interest and bank services as a result from increase in real estate and other commercial loans and NextTrip generated $0.16 million as a result of global pandemic recovery and travel restriction relief.

Cost of $2,536,633, which was mainlyrevenue

Cost of revenue amounted to $2.3 million in line with the revenue, compared to $0 cost in the last year of HotPlay. Cost of media subscription and services amounted to $1.3 million, product development cost amounted to $0.4 million, interest and bank service cost amounted to $0.5 million and cost related to travel service amounted to $0.1 million.

Gross profit margin

Gross profit totaled $5.9 million (71%) compared to $0 of HotPlay in the last year. For the year ended 28 February 2022, NextMedia segment generated gross profits of $4.8 million and NextFinTech segment generated gross profits of $1.1 million.

Net operating loss

Net operating loss totaled $20.7 million compared to $1.6 million last year of HotPlay as some businesses were in pre-operating stage last year, which amount consisted mainly of employee expenses $5.2 million, depreciation and amortization $5.7 million, legal, consulting and professional fee $6 million.

Net loss

Net loss totaled $40.4 million compared to $1.6 million last year of HotPlay, which consistent mainly of certain non-recurring and non-cash such as impairment loss of asset $11.6 million, allowance for note receivables $3.1 million and loss from valuation $2.4 million.

In FYE2022 and the sale of Verus and Recruiter holdings securities. Additionally,subsequent period, the Company recorded an impairmentcompleted the reverse acquisition of Monaker Group in June 2021 and four major acquisitions as of the intangible asset relatedfiling date of this Report. Management believes that the acquisition of GoPlay game portfolio and tournament platform, and subsequent integration with HotPlay will accelerate the launch of a comprehensive gaming solution that could help operators and platforms meaningfully increase user engagement while realizing an alternative revenue stream. In the FinTech division, NextBank has been steadily growing deposits and access to IDScredit lines, generating revenue via the origination and selling of $2,070,000 for the FYE February 28, 2021, dueloans. As we transition NextBank to the settlement of the prior pending legal matter with IDS.a digital bank, management is determined to develop an integrated FinTech platform that offers digital banking, investments into alternative assets, and insurance products.

 

Net Income/Loss


 

We had net loss of $16,508,665 for the FYE February 28, 2021, compared to net loss of $9,454,686 for the FYE February 29, 2020, an increase in net loss of $7,053,969 from the prior period. The increased loss is primarily attributed to an increase of $2,001,634 in operating (loss) and an increase in other (expense) of $5,052,334 for the reasons described above.


Contractual Obligations 

The following schedule represents obligations and commitments on the part of the Company that are not included in liabilities:

  Current  Long Term    
  FYE 2022  FYE 2023  Totals 
Office Leases $75,094  $209,629  $284,723 
Insurance and Other  55,916   55,916   111,832 
Totals $131,010  $265,545  $396,555 

Liquidity and Capital Resources

On February 28, 2021,2022, we had $2,640,988$6.6 million of cash on-handand cash equivalent, which was an increase of $2,478,482$6.2 million from $162,506$0.4 million at February 29, 2020.28, 2021. The increase in cash on handand cash equivalent was mainly attributed to net proceeds received from financing activities of $11,991,438, which was partially$20.4 million, and cash providing by investing activities of $7.9 million, offset by cash used forin operating expenses of $7,356,215 and cash used by investing activities of $2,156,740. $22.0 million.

As of February 28, 2021,2022, the Company had total current liabilities of $6,835,072,$27.5 million, consisting mainly of notesaccounts payable in the formand accrued expense of a Note Purchase Agreement with Streeterville Capital LLC of $2,260,000 and convertible notes payable to HotPlay of $3,000,000,$8.6 million as well as Accounts Payable and Accrued Expensesother liabilities - customer deposits of $1,793,239.$7.6 million. We anticipate that we will satisfy these amounts from proceeds derived from equity sales, sales of marketable securities, financing, cash on handand cash equivalent and revenue generated from sales.

As of February 28, 2021,2022, we had $26.0$99.8 million in total assets, $6.8$31.9 million in total liabilities, working capital of $6.1$6.3 million and a total accumulated deficit of $132.3$39.2 million.

Net cash used in operating activities increased to $7,356,216$22.0 million for the FYE February 28, 2021,2022, compared to $4,937,697$1.0 million of cash used in operating activities during the FYE February 29, 2020.28, 2021. The increase was mainly the result of the Company’s net loss from operations, payments relating to prepaid expenses for software, licenses and games along with increases in other current assets.

Net cash used inprovided by investing activities decreasedincreased to $2,156,740$7.9 million for the FYE February 28, 20212022, as compared to net cash provided byused for investing activities of $1,781,491$5.6 million for FYE February 29, 2020.28, 2021. The decrease can be attributedincrease was mainly to cash used for the purchase of intangible assets related to the business acquisition of Longroot, Inc., a decrease in proceeds from the saleeffects of unconsolidated affiliates related to the Verusbusiness combinations of NextPlay and Recruiter holdings, and payments related to website development costs.NextBank during FY22.

Net cash provided by financing activities increased to $11,991,438$20.4 million for the FYE February 28, 2021,2022, compared to $3,285,733$7.0 million for the FYE February 29, 2020.28, 2021. The increase was primarily due to (i) funds received from the sale of common stock, amounting to $27.9 million; (ii) loans from Streeterville amounted to $2.1 million; and net cash provided by promissory(iii) the repayment of notes activity.

On June 15, 2016, we entered into a revolving line of credit agreement with Republic Bank, Inc. of Duluth, Minnesota, which merged with National Bank of Commerce, which continued as the surviving entity, on July 8, 2019 (“National Bank”). The revolving line of credit has been amended various times to date, and on May 7, 2020, we entered a new Promissory Note with National Bank (“New Note”) in connection with the line of credit. The New Note replaced a prior promissory Note we had in place with National Bank in connection with our $1,200,000 revolving line of credit and extended the due date of the prior Note from June 30, 2020Streeterville, amounting to December 31, 2020. The New Note also amended the interest rate of the prior Note to provide that amounts due under the New Note accrue interest at the rate of prime plus 3% (which rate is currently 6.25%)(the interest rate of the prior Note was prime plus 1%), subject to a floor of 4.5%, which interest is payable monthly in arrears. The New Note may be prepaid at any time without penalty. The New Note contains standard and customary events of default. On December 1, 2020 the company paid off the full balance of the New Note of $1,192,746.

$9.7 million.


Additional information regarding our notes payable, notes receivable, investments in equity instruments, acquisitions and dispositions and line of credit can be found under Item“Item 8. Financial Statements and Supplementary DataData”Note“Note 4 – Notes Receivable”; “Note 10Acquisitions and Dispositions”, “Note 5 – Related Party PromissoryTransactions”, “Note 7 – Notes Receivable” and Transactions”, “Note 5 – Investment in Equity Instruments”, “Note 6 – Acquisitions and Dispositions”, “Note 8 – Line of Credit”; and “Note 17“Note 16 – Subsequent EventsEvents”.

We have very limited financial resources. We currentlyAs of February 28, 2022, we have aworking capital of $6.3 million. Our monthly cash requirement ofis approximately $600,000, exclusive of capital expenditures. $1.5 million for over twelve months.

We anticipate funds raised through the May 2021 underwritten offering and funds borrowed from Streeterville, will be sufficient to provide us working capital through the closing of the HotPlay Share Exchange. In the event the HotPlay Share Exchange does not close on a timely basis or the HotPlay Share Exchange is terminated, we anticipate requiring additional funding, because our projected cash generated from operations is not sufficient to meet our cash needs for working capital and capital expenditures, and if such additional funds are required, management intends to seek additional equity or obtain additional credit facilities or loans. However, we may be unableneed to raise additional capital upon terms acceptable to us. The sale of additional equity will result in additional dilution to our shareholders. A portion of our cash may be used to acquire or invest in complementary businesses, or to increase our ownership of Axion or products or to obtain the right to use complementary technologies. From time to time, in the ordinary course of business, we evaluate potential acquisitions of such businesses, products or technologies.

We will need substantial additional capitalborrow loans to support theour on-going operation and increasedoperations, increase market penetration of our products, including the development of national advertising relationships, increases in operating costs resulting from additional staff and office space until such time as we generate revenues sufficient to support ourselves. We believe that in the aggregate, we could require several millions of dollars to support and expand the marketing and development of our travel and technology driven products, repay debt obligations, provide capital expenditures for additional equipment and development costs, satisfy payment obligations, office space and to implement systems for managing the business, and coverincluding covering other operating costs until our planned revenue streams from all businesses and products are fully implemented and begin to offset our operating costs. Our failure to obtain additional capital to finance our working capital needs on acceptable terms, or at all, willwould negatively impact our business, financial condition, and liquidity. As of February 28, 2021, we had approximately $6.8 million of current liabilities. We currently do not have thelimited resources to satisfy these obligations, and our inability to do so could have a material adverse effect on our business and ability to continue as a going concern. As indicated by the increase of the Company’s deferred revenue balance as of February 28, 2022, $2.1 million, we expect to see an increase in revenue in next year.

 

ToManagement’s plans with regard to this going concern are as follows:

(i)the Company plans to continue to raise funds by way of public or private offerings;

(ii)the Company is working aggressively to increase the viewership of its FinTech and gaming products by promoting it across other mediums;

(iii)the Company expects growth in revenue from interest and non-interest income through organic growth and new business initiatives in the FinTech division;

(iv)the Company plans to issue tokens under its Longroot entity during the year 2023, which is expected to result in generating revenues;

(v)

the Company is tightening its spending on expenses, which is expected to help in the cost reduction of the operations; and

(vi)In March 2022, the Company created an at-the-market equity program under which the Company may, from time to time, and so long as there is an effective registration statement covering the shares issuable thereunder in place, offer and sell shares of its common stock in an aggregate gross offering price of up to $20 million to or through the agent pursuant to the ATM Offering.

The Company’s registration statement on Form S-3 (SEC File No. 333-257457), including the accompanying prospectus and any related prospectus supplement, is subject to the provisions of General Instruction I.B.6 of Form S-3, which provides that the Company may not sell securities in a public primary offering with a value exceeding one-third of its public float in any twelve-month period unless its public float is at least $75 million. As of August 31, 2021, the Company’s public float (i.e., the aggregate market value of its outstanding equity securities held by non-affiliates) was approximately $55 million, based on the closing price per share of the Company’s common stock, as reported on the Nasdaq Capital Market on August 31, 2021, as calculated in accordance with General Instruction I.B.6 of Form S-3. If the Company’s public float meets or exceeds $75 million at any time, the Company will no longer be subject to the restrictions set forth in General Instruction I.B.6 of Form S-3, at least until the filing of its next Section 10(a)(3) update as required under the Securities Act.

The ability of the Company to continue as a going concern is dependent on the Company’s ability to further implement its business plan and generate greater revenues. Management believes that the actions presently being taken to further implement its business plan and generate additional revenues provide the opportunity for the Company to continue as a going concern.


Known Trends or Uncertainties

Although we have not seen any significant reduction in revenues to date, we have fundedseen some consolidation in our operations withindustry during economic downturns. These consolidations have not had a negative effect on our total sales; however, should consolidations and downsizing in the proceeds from equityindustry continue to occur, those events could adversely impact our revenues and debt financingsearnings going forward.

As discussed in the Risk Factors section of this Report, the world has been affected due to the COVID-19 pandemic. Until the pandemic has passed, there remains uncertainty as to the effect of COVID-19 on our business in both the short and long-term.

The potential for growth in new markets is uncertain. We will continue to explore these opportunities until such time as we anticipate we will needeither generate sales or determine that resources would be more efficiently used elsewhere.

Inflation

Inflation has increased during the periods covered by this Report, and is expected to meet our funding requirements through the sale of equity or debt financing, which funds may not be available on favorable terms, if at all. We anticipate that we would need several millions of dollarscontinue to properly market our services and fund the operationsincrease for the next 12 months.

Separately,near future. Inflationary factors, such as increases in interest rates, overhead costs and transportation costs may adversely affect our capital requirementsoperating results. Although we do not believe that inflation has had a material impact on our financial position or results of operations to date, we may increaseexperience some effect in the near term and long-termfuture (especially if inflation rates continue to rise) due to supply chain constraints, consequences associated with COVID-19 and the impactongoing conflict between Russia and Ukraine, employee availability and wage increases.

Off-Balance Sheet Arrangements

We have not entered into any off-balance sheet arrangements.

Contractual Obligations and Commitments

Note Purchase Agreements: Streeterville Capital, LLC

November 2020 Note Purchase Agreement

On November 23, 2020, the Company entered into the November 2020 Note Purchase Agreement with Streeterville, pursuant to which the Company sold Streeterville the November 2020 Streeterville Note in the original principal amount of $5,520,000. Streeterville paid consideration of an initial cash purchase price of $3,500,000 for the note and issued the Company the November 2020 Investor Note in the amount of $1,500,000. The associated debt issuance costs of the COVID-19 pandemic,note were $370,000 for total amount due $3,870,000. In addition to the $370,000 of debt issuance costs, the Company paid $245,000 for advisory fees, resulting reduced demandin net proceeds to the Company of $3,255,000.

The November 2020 Investor Note, in the principal amount of $1,500,000, evidenced the amount payable by Streeterville to the Company as partial consideration for travel services, the increasesacquisition by the Company of the November 2020 Streeterville Note. The November 2020 Investor Note accrued interest at the rate of 10% per annum, payable in cancellationsfull on November 23, 2021, subject to a 30-day extension exercisable at the option of Streeterville and re-bookings,could be prepaid at any time. The amount of the Investor Note has been offset against the amount of the November 2020 Streeterville Note in the balance sheet as of February 28, 2021, as both notes have substantially similar terms, and the extentInvestor Note was provided in consideration for the acquisition of a portion of the November 2020 Streeterville Note. The November 2020 Investor Note was subsequently funded in full in January 2021.

On November 4, 2021, the Company completely paid off the November 2020 Streeterville Note in the amount of $3,100,807.

March 2021 Note Purchase Agreement

On March 22, 2021, we entered into the March 2021 Note Purchase Agreement dated March 23, 2021 with Streeterville, pursuant to which the Company sold Streeterville the March 2021 Streeterville Note in the original principal amount of $9,370,000. Streeterville paid consideration of (a) $7,000,000 in cash; and (b) issued the Company the March 2021 Investor Note in the amount of $1,500,000, in consideration for the March 2021 Streeterville Note, which included an OID of $850,000 and reimbursement of Streeterville’s transaction expenses of $20,000. A total of $700,000 of the OID was fully earned upon issuance and the remaining $150,000 was not fully earned until the March 2021 Investor Note was fully-funded by Streeterville, which occurred on May 26, 2021. Also on May 26, 2021, Streeterville funded the March 2021 Investor Note (in the amount of $1.5 million) in full.

We made a required equity payment of $1,857,250 to Streeterville under the March 2021 Streeterville Note on May 26, 2021, with funds raised through a May 2021 underwritten offering, which represented approximately 20% of the funds raised in such pandemic may further impactoffering. On November 4, 2021, the abilityCompany paid down the outstanding balance of our customersthe March 2021 Streeterville Note in the amount of $6,000,000 with funds raised through the November 2021 registered direct offering.

October 2021 Note Purchase Agreement

On October 22, 2021, the Company entered into the October 2021 Note Purchase Agreement with Streeterville, pursuant to fulfill their payment obligations.which the Company sold Streeterville the October 2021 Streeterville Note in the original principal amount of $1,665,000. Streeterville paid consideration of $1,500,000, which represents the original principal amount less a $150,000 OID, which was fully earned upon issuance, and a total of $15,000 to cover Streeterville’s professional fees and transaction expenses.

 


The October 2021 Note Purchase Agreement and the October 2021 Streeterville Note contain customary events of default, including if the Company undertakes a fundamental transaction (including consolidations, mergers, and certain changes in control of the Company), without Streeterville’s prior written consent. As described in the October 2021 Streeterville Note, upon the occurrence of certain events of default (mainly our entry into bankruptcy), the outstanding balance of the October 2021 Streeterville Note will become automatically due and payable. Upon the occurrence of other events of default, Streeterville may declare the outstanding balance of the October 2021 Streeterville Note immediately due and payable at such time or at any time thereafter. After the occurrence of an event of default (and upon written notice from Streeterville), interest on the October 2021 Streeterville Note will accrue at a rate of 22% per annum, or if lesser, the maximum rate permitted under applicable law. The October 2021 Note Purchase Agreement prohibits Streeterville from shorting our stock through the period that Streeterville holds the October 2021 Streeterville Note.

As of February 28, 2022, the remaining aggregate principal balance of the March 2021 and October 2021 Streeterville Notes was $4,053,737, plus accrued interest of $653,587.

May 2022 Note Purchase Agreement

On May 5, 2022, the Company entered into the May 2022 Note Purchase Agreement with Streeterville, pursuant to which the Company sold Streeterville the May 2022 Streeterville Note in the original principal amount of $2,765,000. Streeterville paid consideration of $2,500,000, which represents the original principal amount less a $250,000 OID, which was fully earned upon issuance, and a total of $15,000 to cover Streeterville’s professional fees and transaction expenses.

The May 2022 Note Purchase Agreement and the May 2022 Streeterville Note contain customary events of default, including if the Company undertakes a fundamental transaction (including consolidations, mergers, and certain changes in control of the Company), without Streeterville’s prior written consent. As described in the May 2022 Streeterville Note, upon the occurrence of certain events of default (mainly our entry into bankruptcy), the outstanding balance of the May 2022 Streeterville Note will become automatically due and payable. Upon the occurrence of other events of default, Streeterville may declare the outstanding balance of the May 2022 Streeterville Note immediately due and payable at such time or at any time thereafter. After the occurrence of an event of default (and upon written notice from Streeterville), interest on the May 2022 Streeterville Note will accrue at a rate of 22% per annum, or if lesser, the maximum rate permitted under applicable law. The May 2022 Note Purchase Agreement prohibits Streeterville from shorting our stock through the period that Streeterville holds the May 2022 Streeterville Note.

Operating Leases Obligation

The Company entered into an office lease in Sunrise, Florida where we leased approximately 5,279 square feet of office space at 1560 Sawgrass Corporate Parkway, Suite 130, Sunrise, Florida 33323. In accordance with the terms of the office space lease agreement, the Company will be renting the commercial office space, for a term of almost eight years from March 1, 2021, through July 31, 2028, with rental costs amounting to approximately $17,380 per month for the duration of the lease. Additionally, the Company (in some cases indirectly through its subsidiaries) rents office space located in Puerto Rico, Thailand, Belgium, and Switzerland with lease terms ranging from five to nine years, with rental costs for all such properties amounting to an aggregate of approximately $21,228 per month.

A subsidiary of the Company entered into several car operating leases for employees with a term of 24 to 62 months from April, 2022, through July, 2025. The Company recorded operating lease Right-to-Use asset amount of $3,962,596 along with operating lease liability amounting to $4,009,242 as of February 28, 2022.

June 2022 Promissory Notes

On June 13, 2022, the Company entered into two promissory notes, each in the principal amount of approximately CAD $231,121 (USD $178,234), with its former legal counsel, which notes were issued, along with a CAD $10,000 (USD $7,712) in lieu of immediate payment of outstanding amounts payable to such counsel for legal services previously rendered to the Company. The first note will mature on July 31, 2022, and the second note will mature on September 1, 2022; provided, however, that if the Company fails to repay the first note in full on or before its maturity date, then the second note will automatically become immediately due and payable. Both notes are unsecured and accrue interest at a rate of 18% per annum.

Critical Accounting Policies and Estimates

Our consolidated financial statements are prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP)(“GAAP”). The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, costs and expenses, and related disclosures. On an ongoing basis, we evaluate our estimates and assumptions. To the extent there are material differences between these estimates and our actual results, our consolidated financial statements will be affected.

Our significant accounting policies, are described in “Item 8. Financial Statements and Supplementary Data” – “Note 1 – Description of Business and Summary of Significant Accounting Policies” to the accompanying consolidated financial statements. 

The methods, estimates and judgments we use in applying our accounting policies have a significant impact on our results of operations. We believe that the policies listed below involve the greatest degree of complexity and judgment by our management and are critical for understanding and evaluating our financial condition and results of operations. If actual results significantly differ from the Company’s estimates, the Company’s financial condition and results of operations could be materially impacted.


Revenue Recognition

We recognize revenue when the customer has purchased the product, the occurrence of the earlier of date of travel or the date of cancellation has expired, the sales price is fixed or determinable and collectability is reasonably assured.

Revenues for customer travel packages purchased directly from the Company are recorded in gross amounts (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).

We generate our travel revenues from sales directly to customers as well as through other distribution channels of tours and activities at destinations throughout the world. We also generate revenue from commissions on bookings and sales of ancillary products and services. We generate revenue in the form of commissions from the sale of cryptocurrency offerings which are recognized at the time funds are raised.

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

Business Combinations

The purchase prices of acquired businesses or acquired assets have been allocated to the tangible and intangible assets acquired and liabilities assumed, based upon their estimated fair value at the date control is obtained. The difference between the purchase price and the fair value of the net assets acquired is recorded as goodwill.

Most of the businesses we have acquired did not have a significant amount of tangible assets. We typically identified the following identifiable intangible assets in each acquisition: trade name, licenses, customer relationships and internal software. In making certain assumptions on valuation and useful lives, we considered the unique nature of each acquired asset.

Determining the estimated fair value of assets involves the use of significant estimates, judgment and assumptions, such as future cash flows and selection of comparable companies. Future changes in our assumptions or the interrelationship of those assumptions may negatively impact future valuations and could result in an impairment of goodwill or intangible assets that may have a material effect on our financial condition and operating results.

Definite-lived intangible assets are recorded at cost and amortized using a method that reflects our best estimate of the pattern in which the economic benefit of the related intangible asset is utilized.

Goodwill and indefinite-lived intangible assets, such as certain trade names and licenses, are not amortized and are subject to annual impairment tests during the fourth quarter, or whenever events or circumstances indicate impairment may have occurred. For goodwill and indefinite lived intangible assets, we complete a quantitative analysis that compares the fair value of our reporting unit or indefinite-lived intangible assets to the carrying amounts, and an impairment loss is recognized equivalent to the excess of the carrying amount over the fair value.

Accounts Receivable

We extend credit to our customers in the normal course of business. Further, we regularly review outstanding receivables, and provide for estimated losses through an allowance for doubtful accounts. In evaluating the level of established loss reserves, we make judgments regarding our customers’ ability to make required payments, economic events, and other factors. As the financial condition of these parties’ change, circumstances develop or additional information becomes available, and adjustments to the allowance for doubtful accounts may be required. We maintain reserves for potential credit losses, and such losses traditionally have been within our expectations. As of February 28, 2021, and February 29, 2020, we had $0 and $0 of accounts receivable, respectively. Our allowance for doubtful accounts was $0 as of February 28, 2021.


Impairment of Long-Lived Assets

In accordance with Accounting Standards Codification 360-10, “Property, Plant and Equipment”, we periodically review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. We recognize an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The amount of impairment is measured as the difference between the asset’s estimated fair value and its book value. As of February 28, 2021, we had not impaired any long-lived assets.

Website Development Costs

We account for website development costs in accordance with Accounting Standards Codification 350-50 “Website Development Costs”. Accordingly, all costs incurred in the planning stage are expensed as incurred, costs incurred in the website application and infrastructure development stage that meet specific criteria are capitalized subject to straight-line amortization over a three-year period and costs incurred in the day-to-day operation of the website are expensed as incurred.

Goodwill and Other Intangible Assets

In accordance with ASC 350-30-65 “Goodwill and Other Intangible Assets”, we assess the impairment of identifiable intangible assets whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Factors we consider important, which could trigger an impairment review include the following:

1. Significant underperformance to historical or projected future operating results;

2. 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 we determine 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 flow, we record an impairment charge. We measure 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. We evaluated the remaining useful life of the intangibles and wrote-down the intellectual property assets related to IDS in the amount of $2,070,000, during the year ended February 28, 2021, but had no write-downs or impairments for the fiscal year ended February 29, 2020.

Intellectual properties that have finite useful lives are amortized over their useful lives. We incurred amortization expense of $210,507 and $293,804 for the years ended February 28, 2021 and February 29, 2020, respectively, which is included in operating expenses.

Convertible promissory notes

Upon issuance of convertible promissory senior notes, we separated the notes into liability and equity components. We record debt net of debt discount for beneficial conversion features and warrants, on a relative fair value basis. Beneficial conversion features are recorded pursuant to the Beneficial Conversion and Debt Topics of the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC). The carrying amount of the liability component was calculated by measuring the fair value of a similar liability that does not have an associated convertible feature. The carrying amount of the equity component representing the conversion option was determined by deducting the fair value of the liability component from the par value of the notes. The excess of the principal amount of the liability component over its carrying amount (“debt discount”) is amortized to interest expense over the term of the notes using the effective interest rate method. The equity component is not re-measured if it continues to qualify for equity classification. The balance of convertible promissory senior notes, as of February 28, 2021 and February 29, 2020, was $3,000,000 and $0, respectively.


In accounting for the transaction costs related to the Note issuance, we allocated the total amount incurred to the liability and equity components based on their relative values. Transaction costs attributable to the liability component are being amortized to expense over the term of the notes using the effective interest rate method, and transaction costs attributable to the equity component were netted with the equity component in stockholders’ equity.

Derivative Instruments

We enter into financing arrangements that consist of freestanding derivative instruments or are hybrid instruments that contain embedded derivative features. We account for these arrangements in accordance with Accounting Standards Codification topic 815, Accounting for Derivative Instruments and Hedging Activities (“ASC 815”) as well as related interpretation of this standard. In accordance with this standard, derivative instruments are recognized as either assets or liabilities in the balance sheet and are measured at fair values with gains or losses recognized in earnings. Embedded derivatives that are not clearly and closely related to the host contract are bifurcated and are recognized at fair value with changes in fair value recognized as either a gain or loss in earnings. We determine the fair value of derivative instruments and hybrid instruments based on available market data using appropriate valuation models, considering all of the rights and obligations of each instrument.

We estimate fair values of derivative financial instruments using various techniques (and combinations thereof) that are considered consistent with the objective measuring fair values. In selecting the appropriate technique, we consider, among other factors, the nature of the instrument, the market risks that it embodies and the expected means of settlement. For less complex derivative instruments, such as freestanding warrants, we generally use the Black-Scholes model, adjusted for the effect of dilution, because it embodies all of the requisite assumptions (including trading volatility, estimated terms, dilution and risk-free rates) necessary to fair value these instruments. Estimating fair values of derivative financial instruments requires the development of significant and subjective estimates that may, and are likely to, change over the duration of the instrument with related changes in internal and external market factors. In addition, option-based techniques (such as Black-Scholes model) are highly volatile and sensitive to changes in the trading market price of our common stock. Since derivative financial instruments are initially and subsequently carried at fair values, our income (expense) going forward will reflect the volatility in these estimates and assumption changes. Under the terms of the new accounting standard, increases in the trading price of our common stock and increases in fair value during a given financial quarter result in the application of non-cash derivative expense. Conversely, decreases in the trading price of our common stock and decreases in trading fair value during a given financial quarter result in the application of non-cash derivative income.

Based upon ASC 815-25 the Company has adopted a sequencing approach regarding the application of ASC 815-40 to its outstanding convertible debentures. Pursuant to the sequencing approach, the Company evaluates its contracts based upon earliest issuance date.

In July 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017-11, Earnings Per Share (Topic 260) Distinguishing Liabilities from Equity (Topic 480) Derivatives and Hedging (Topic 815): I. Accounting for Certain Financial Instruments with Down Round Features, and II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception. ASU 2017-11 intends to reduce the complexity associated with the issuer’s accounting for certain financial instruments with characteristics of liabilities and equity. Specifically, the FASB determined that a down round feature (as defined) would no longer cause a freestanding equity-linked financial instrument (or an embedded conversion option) to be accounted for as a derivative liability at fair value with changes in fair value recognized in current earnings and is effective in fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. The Company adopted the new standard during 2017, preventing the need to account for several outstanding warrants that contain down round features as derivative instruments.


Stock-Based Compensation

We have stock-based compensation plans which allow for the issuance of stock-based awards, including stock options, restricted stock units and restricted stock awards. We compute share-based payments in accordance with Accounting Standards Codification 718-10 “Compensation” (ASC 718-10). ASC 718-10 establishes standards for the accounting for transactions in which an entity exchanges its equity instruments for goods and services at fair value, focusing primarily on accounting for transactions in which an entity obtains employees services in share-based payment transactions. It also addresses transactions in which an entity incurs liabilities in exchange for goods and services that are based on the fair value of an entity’s equity instruments or that may be settled by the issuance of those equity instruments.

SAB No. 107, Share-Based Payment (“SAB 107”) provides guidance regarding the interaction of ASC 718-10 and certain SEC rules and regulations. We have applied the provisions of SAB 107 in its adoption of ASC 718-10. We account for stock-based compensation expense by amortizing the fair value of each stock-based award expected to vest over the requisite service or performance period. The fair value of restricted stock awards is based on the number of shares granted and the closing price of our common stock on the date of grant. The fair value of each stock option award is calculated on the date of grant using the Black-Scholes option-pricing model.

The Black-Scholes model requires various assumptions including fair value of the underlying stock, volatility, expected term, risk-free interest rate and expected dividends. We use our historical experience to estimate the expected forfeiture rate of awards, and only recognize expense for those awards expected to vest. To the extent the actual forfeiture rate is different from the estimate, the stock-based compensation expense is adjusted accordingly. If any of the assumptions we use in estimating the fair value of awards change significantly or the actual forfeiture rate is different than the estimate, stock-based compensation expense may differ materially in the future.

We have implemented all new relevant accounting pronouncements that are in effect through the date of these financial statements. These pronouncements did not have a material impact on the financial statements and unless otherwise disclosed, we do not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on our financial position or results of operations.

Income Taxes

The Company accounts for income taxes pursuant to the provisions of ASC 740-10, “Accounting for Income Taxes” in accordance with the liability methodwhereby deferred tax asset and liability account balances are determined based on differences between financial reporting and the tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. These differences result in deferred tax assets and liabilities, which are included in our consolidated balance sheets. We then assess the likelihood that the deferred tax assets will be recovered from future taxable income and the reversal of temporary taxable differences. A valuation allowance is established against deferred tax assets to the extent we believe that recovery is not likely. Significant judgment is required in determining any valuation allowance to be recorded. In assessing the need for a valuation allowance, we consider all available evidence, including past operating results, estimates of future taxable income, reversals of taxable temporary differences and the feasibility of tax planning over the periods in which the temporary differences are deductible. In the event we change our determination as to the amount of deferred tax assets that can be realized, we will adjust our valuation allowance with a corresponding impact to the provision for income taxes in the period in which the determination is made.

The difference between our effective income tax rate and the federal statutory rate is primarily a function of the mix of uncertain tax positions and permanent differences including non-deductible charges. Our provision for income taxes is subject to volatility and could be adversely impacted if earnings or tax rates differ from our expectations or if new tax laws are enacted.

Significant judgment is required in evaluating any uncertain tax positions, including the timing and amount of deductions and allocations of income among various tax jurisdictions. We are required to identify, evaluate and measure all uncertain tax positions taken or to be taken on tax returns and to record liabilities for the amount of these positions that may not be sustained, or may only partially be sustained, upon examination by the relevant taxing authorities. Although we believe that ourpolicies, methods, estimates and judgments are reasonable, actual results may differ from these estimates. Some or alldescribed in “Item 8. Financial Statements and Supplementary Data” – “Note 1 – Description of these judgments are subjectBusiness and Summary of Significant Accounting Policies” to review by the taxing authorities. We adjust these reserves in light of changing facts and circumstances, such as the closing of an audit or the refinement of an estimate. To the extent that the final outcome of a matter is different than the amount recorded, such differences will impact the provision for income taxes in the period in which the determination is made. The provision for income taxes includes the impact of reserve provisions and changes to reserves that are considered appropriate, as well as any related net interest and penalties.


We have adopted ASC 740-10-25 Definition of Settlement, which provides guidance on how an entity should determine whether a tax position is effectively settled for the purpose of recognizing previously unrecognized tax benefits and provides that a tax position can be effectively settled upon the completion of an examination by a taxing authority without being legally extinguished. For tax positions considered effectively settled, an entity would recognize the full amount of tax benefit, even if the tax position is not considered more likely than not to be sustained based solely on the basis of its technical merits and the statute of limitations remains open. As of February 28, 2021, the Company’s income tax returns for tax years ending February 29, 2020, February 28, 2019, 2018, 2017, February 29, 2016, February 28, 2015, and 2014 remain potentially subject to audit by the taxing authorities.

We follow the guidance of ASC 740, “Income Taxes.” Deferred income taxes reflect the net effect of (a) temporary difference between carrying amounts of assets and liabilities for financial purposes and the amounts used for income tax reporting purposes, and (b) net operating loss carry- forwards. No current tax provision has been made in the accompanying statement of income (loss) because no taxes are due currently or were paid previously. Similarly, no deferred tax asset attributable to the net operating loss carry- forward has been recognized, as it is not deemed likely to be realized.consolidated financial statements.

Earnings per Share

Basic earnings per share are computed by dividing net income by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is computed by dividing net income by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during each period. Diluted loss per common share is not presented because it is anti-dilutive.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk

Pursuant to Item 305(e) of Regulation S-K (§ 229.305(e)), the Company is not required to provide the information required by this Item as it is a smaller“smaller reporting company,” as defined by Rule 229.10(f)(1).

 82


 

Item 8. Financial Statements and Supplementary Data.

 

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

 

Description Page
Report of Independent Registered Public Accounting Firm (PCAOB ID No. is 6706.) 86F-2
Consolidated Balance Sheets 87F-5
Consolidated Statements of Operations and Comprehensive Loss 88F-6
Consolidated Statement of Cash Flows 89F-7
Consolidated Statements of Stockholders’ Equity 90F-8
Notes to Consolidated Financial Statements 91F-9


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the Stockholders and Board of Directors

Monaker Group, IncNextPlay Technologies, Inc.

 

Opinion on the Financial Statements

 

We have audited the accompanying consolidated balance sheetsheets of Monaker Group, IncNextPlay Technologies, Inc. (“the Company”), as of February 28, 2022 and 2021, and the related consolidated statements of operations and comprehensive loss, stockholders’ equity and cash flows for the year then ended February 28, 2022 and for the period March 6, 2020 (inception) to February 28, 2021 and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the consolidated financial position of the Company as of February 28, 2022 and 2021, and the consolidated results of its operations and its cash flows for the year ended February 28, 2022 and for the period March 6, 2020 (inception) to February 28, 2021, in conformity with U.Saccounting principles generally accepted accounting principles.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatements of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentationUnited States of the financial statements. We believe that our audit provides a reasonable basis for our opinion.America.

 

Going Concern

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As described in Note 2 to the financial statements and going concern assessment of critical audit matter below, the Company has suffered recurring losses from operations and has stockholders’ deficit that raise substantial doubt about its ability to continue as a going concern. Management’s plans regarding these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgement. The communication of a critical audit matter does not alter in anyway our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.


Going Concern Assessment

As described in Note 2 to the financial statements, the Company prepared its financial statements on a going concern basis, and management has concluded that the Company has not generated sufficient income to sustain its operations. For the year ended February 28, 2021, the Company incurred net losses of USD 16.5 million and used the net cash in operating activities of USD 7.4 million. As of February 28, 2021, the accumulated deficit amounted to USD 132.3 million.

The principal consideration for our determination that performing procedures relating to the Company’s going concern assessment is a critical audit matter is the significant judgment by management related to the Company’s ability to raise funds and continue operations.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the financial statements. These procedures included testing the issuance of additional equity and debt securities by the Company subsequent to the year end.

/S/ TPS Thayer, LLC

TPS Thayer, LLC

We have served as the Company’s auditor since 2020

Sugar Land, Texas

June 7, 2021


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and Board of Directors

Monaker Group, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Monaker Group, Inc. (“the Company”), as of February 29, 2020 and February 28, 2019, and the related statements of operations, changes in stockholder’s equity and cash flows for the years then ended and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the consolidated financial position of the Company as of February 29, 2020 and February 28, 2019, and the consolidated results of its operations and its cash flows for the years ended February 29, 2020 and February 28, 2019, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

 

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the auditaudits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit,audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

 

Our audits included performing procedures to assess the risks of material misstatements of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit providesaudits provide a reasonable basis for our opinion.

  

Emphasis


Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgement. The communication of a Matter

The accompanyingcritical audit matter does not alter in anyway our opinion on the financial statements, have been prepared assuming the Company will continuetaken as a going concern. whole, and we are not, by communicating the critical audit matters below, providing a separate opinion on the critical audit matters or on the accounts or disclosures to which they relate.

Initial Purchase Price Allocated to Assets acquired and Liabilities assumed in connection with the Reverse acquisition (refer to Note 1 to the financial statements) and Business combinations (refer to Note 4 to the financial statements)

Critical Audit Matter Description

As discussed in Note #21 to the consolidated financial statements, the Company (then known as Monaker Group, Inc. (“Monaker”)) entered into a “Share Exchange Agreement” with HotPlay Enterprise Limited (“HotPlay”) in July 2020, which was completed in June 2021, for fair value of total estimated consideration transferred of $53.43 million. The transaction resulted in a reverse acquisition, pursuant to which, the Company recognized total assets acquired of $56.48 million, including cash, and total liabilities assumed of $37.90 million.

As discussed in Note 4 to the consolidated financial statements, the Company acquired Reinhart Interactive TV AG and Zappware N.V. in June 2021, for total consideration of $10.71 million. As a result of the acquisition, the Company recognized total assets of $20.39 million, including cash and total liabilities assumed of $12.8 million. 

Further, As discussed in Note 4 to the consolidated financial statements, the Company acquired NextBank International (formerly IFEB) in July 2021, for total consideration of $11.21 million. As a result of the acquisition, the Company recognized total assets of $14.77 million, including cash and total liabilities assumed of $11.48 million. 

We identified the purchase price allocation as a critical audit matter. There was a high degree of subjectivity involved in evaluating the estimated fair value of the assets acquired and liabilities assumed. Specifically, assessing the estimated fair value of non-current assets and liabilities was challenging as it involved subjective judgment based on nature of those assets and liabilities and current economic condition. Changes to those assumptions could have had a significant effect on the determination of the fair value measurements.

How the Critical Audit Matter Was Addressed in the Audit

The following are the primary procedures we performed, among others (for each of the acquisition) to address this critical audit matter:

We obtained understanding of business and business environment.
Performed inquiries with applicable individuals in the Company’s and Acquiree’s finance and operations department.
Tested accuracy and completeness of the provisional opening balances at the date of acquisition, obtained and reviewed copies of significant contracts.
Obtained provisional purchase price allocation worksheets, tested the mathematical accuracy of the worksheet, and tied the balances with applicable acquiree trial balance.
Evaluated the reasonableness of estimated provisional fair value of each asset acquired and liability assumed.
Considered the existence of contradictory evidence based on reading of internal communication to management, Board minutes, Company press releases, publicly available information as well as our observations and inquires as to the changes within the business.


Allowance for Credit Losses (“ACL”) with respect to Axion Ventures Inc’s Convertible notes (refer to Note 7 to the financial statements

Critical Audit Matter Description

As discussed in Note 7 of the consolidated financial statements, the Company as of the year ended February 28, 2022 has an outstanding convertible note receivable of $7.7 million and relevant accrued interest receivable of $0.2 million with Axion Ventures Inc. The Company initiated the process to recover the outstanding amount. Accordingly, the Company engaged external counsel, sent a demand letter to Axion Ventures Inc, filed a claim in the Supreme Court of British Columbia, and based the filed claim, noted the court was receptive to loans related evidence and determined that it will be further resolved together with other Axion Ventures Inc. issues in the next trial. As of the year ended February 28, 2022, the Company has recorded an ACL for the principal amount of $3.1 million and for the accrued interest receivable amount of $0.2 million.

We identified ACL specific to Axion Ventures Inc’s convertible note as a critical audit matter. There was a high degree of subjectivity involved in assessing the sufficiency of the ACL amount as the assumptions used in measuring the ACL amount are judgmental and subjective and based on the ongoing legal matter. Changes to those assumptions could have had a significant effect on the determination of the ACL amount.

How the Critical Audit Matter Was Addressed in the Audit

The following are the primary procedures, among others, we performed to address this critical audit matter:

We obtained an understanding of the convertible note receivable.
Performed inquiries with relevant individuals of the Company
Obtained and reviewed a response from the Company’s respective attorney, as well as reviewed applicable attorney’s communication regarding the matter.
Obtained and reviewed a copy of the filed lawsuit.
Reviewed the publicly available Axion Ventures Inc’s audited financial statements, noting the matter as one of the outstanding legal matters.
Assessed the reasonableness of key assumptions used in estimating the ACL.
Considered the existence of contradictory evidence based on reading of internal communication to management, Board minutes, Company press releases, publicly available information as well as our observations and inquires as to the changes within the business.

Going Concern Assessment (refer to Note 2 to the financial statements)

Critical Audit Matter Description

As described in Note 2 to the financial statements, the Company prepared its financial statements on a going concern basis, and management has anconcluded that the Company has not generated sufficient income to sustain the operations. For the year ended February 28, 2022 and for the period March 6, 2020 (inception) to February 28, 2021, the Company incurred net losses of $40.41 million and $1.63 million respectively, and used net cash in operating activities of $22.03 million and $1.0 million, respectively. As of February 28, 2022 and for the period March 6, 2020 (inception) to February 28, 2021, the accumulated deficit amounted to $39.17 million and limited financial resources. This raises substantial doubt about its$1.20 million, respectively.

The principal consideration for our determination that performing procedures relating to the Company’s going concern assessment is a critical audit matter is the significant judgment by management related to the Company’s ability to raise funds and generate revenue sufficient to continue as a going concern. Management’s plan with regard to these matters is also described in Note #2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.its operations.

 

How the Critical Audit Matter Was Addressed in the Audit

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the financial statements. These procedures included reviewing new note payable agreements, reviewing certain debt restructuring agreements and reviewing the at-the market equity program entered into by the Company subsequent to year end.

/S/ TPS Thayer, O’Neal Company, LLC

 

TPS Thayer, O’Neal Company, LLC

We have served as the Company’s auditor since 20192020

Sugar Land, Texas

May 29, 2020

June 17, 2022

 86


 

 

Monaker Group, Inc.

NextPlay Technologies, Inc.
Consolidated Balance Sheet
Sheets

  As of
  February 28, 2021 February 29, 2020
Assets    
Current Assets    
Cash $2,640,988  $162,506 
Prepaid expenses and other current assets  1,864,279   334,995 
Investment in unconsolidated affiliates - short-term  264,884   979,954 
Security Deposits  258,296   53,279 
Notes Receivable, related parties  7,657,024   —   
Other Receivable, related parties  216,647   —   
Note Receivable, net  —     37,500 
Total current assets  12,902,118   1,568,234 
         
Non-current Assets        
   Investment in unconsolidated affiliates – long term  4,912,111   1,849,077 
   Website development costs and intangible assets, net  8,081,718   6,712,547 
   Fixed Assets, net  101,573   19,664 
   Operating lease right-of-use asset  —     76,762 
Total assets $25,997,520  $10,226,284 
         
Liabilities and Stockholders’ Equity        
Current Liabilities        
Line of Credit & Notes Payable, net $1,807,462  $1,192,716 
Convertible Notes Payable, related parties  3,000,000   —   
Accounts payable and accrued expenses  1,793,239   833,679 
Other current liabilities  234,372   400,692 
Operating lease liability  —     76,762 
Revolving promissory notes, related party  —     1,575,000 
Total current liabilities  6,835,073   4,078,849 
         
Total liabilities  6,835,073   4,078,849 
         
Commitments and Contingencies        
         
Stockholders’ equity        
Series A Preferred Stock, $0.01 par value; 3,000,000 authorized; no shares issued and outstanding at February 28, 2021 and February 29, 2020  —     —   
Series B Preferred Stock, $0.00001 par value; 10,000,000 authorized; 10,000,000 and 0 shares issued and outstanding at February 28, 2021 and February 29, 2020, respectively  100   —   
Series C Preferred Stock, $0.00001 par value; 3,828,500 authorized; 3,828,500 and 0 shares issued and outstanding at February 28, 2021 and February 29, 2020, respectively  38   —   
Common stock, $0.00001 par value; 500,000,000 shares authorized; 18,765,839 and 13,069,339 shares issued and outstanding at February 28, 2021 and February 29, 2020, respectively  187   131 
Additional paid-in-capital  151,427,224   122,000,201 
         
   Currency Translation  53,712   —   
   Accumulated deficit  (132,340,979)  (115,852,897)
 Stockholders’ equity attributable to parent  19,140,282   6,147,435 
    Non-Controlling Interest  22,165   —   
Total stockholders’ equity $19,162,447  $6,147,435 
Total liabilities and total stockholders’ equity $25,997,520  $10,226,284 

The accompanying notes are an integral part of these consolidated financial statements.  

 

 87

  February 28,  February 28, 
   2022      2021 
Assets      
Current assets      
Cash and cash equivalent $6,618,951  $444,920 
Short term investment  304,509    
Accounts receivable, net  766,793    
Loans receivable, net  17,355,163    
Unbilled receivables  3,277,408    
Other receivable  343,681    
Other receivable, related parties  155,425    
Work in progress  691,863    
Prepaid expenses and other current assets  1,010,364   235,746 
Advance for investments  3,227,117    
Investment in unconsolidated affiliate: Short-term  8,722    
Convertible notes receivable, related party     3,000,000 
Total current assets $33,759,996  $3,680,666 
         
Non-current assets        
Investment in unconsolidated affiliates: Long-term $6,258  $ 
Convertible notes receivable, related party - net  4,594,214    
Intangible assets, net  17,661,676   7,759,603 
Goodwill  38,946,419    
Computers, furniture and equipment, net  557,961   25,793 
Operating lease right-of-use asset  3,962,596    
Security deposits  264,373    
Total non-current assets $65,993,497  $7,785,396 
         
Total assets $99,753,493  $11,466,062 
         
Liabilities and stockholders’ equity        
Current liabilities        
Line of credit and notes payable, net $7,341,745  $ 
Accounts payable and accrued expenses  8,595,064   343,941 
Other current liabilities  392,684   11,163 
Deferred revenue  2,087,763    
Current portion of operating lease liability  711,803    
Other current liabilities - customer demand deposits payable  7,608,279    
Other liabilities affiliate     38,260 
Notes payable - related party  765,040   1,053,082 
Total current liabilities $27,502,378  $1,446,446 
         
Non-current liabilities        
Line of credit and notes payable long-term, net $270,809  $ 
Note payable long term, related parties  966,314    
Operating lease liability, noncurrent portion  3,117,947    
Other long-term liability  34,847    
Total non-current liabilities $4,389,917  $ 
         
Total liabilities $31,892,295  $1,446,446 
         
Commitments and Contingencies        
         
Stockholders’ equity        
Series A Preferred stock, $0.01 par value; 3,000,000 authorized; 0 and 0 shares issued and outstanding at February 28, 2022 and 2021, respectively      
Series B Preferred stock, $0.00001 par value; 10,000,000 authorized; 0 and 10,000,000 shares issued and outstanding at February 28, 2022 and 2021, respectively      
Series C Preferred stock, $0.00001 par value; 3,828,500 authorized; 0 and 3,828,500 shares issued and outstanding at February 28, 2022 and 2021, respectively      
Series D Preferred stock, $0.00001 par value; 6,100,000 authorized; 0 and 0 shares issued and outstanding at February 28, 2022 and 2021, respectively      
Common stock, $0.00001 par value; 500,000,000 shares authorized; 108,360,020 and 62,400,000 shares outstanding at February 28, 2022 and 2021, respectively  1,084   624 
Treasury stock  (771,453)   
Additional paid-in-capital  104,393,361   11,599,357 
Accumulated other comprehensive (loss)/income  (218,703)  10,221 
Accumulated deficit  (39,173,079)  (1,200,309)
Stockholders’ equity attributable to parent $64,231,210  $10,409,893 
Non-controlling interest  3,629,988   (390,277)
         
Total stockholders’ equity  67,861,198   10,019,616 
Total liabilities and stockholders’ equity $99,753,493  $11,466,062 

 

Monaker Group, Inc.

Consolidated Statements of Operations and Comprehensive Loss

  For the years ended 
  February 28,  February 29, 
  2021  2020 
Revenues      
Travel revenues $48,338  $441,769 
Gross revenues  48,338   441,769 
         
Cost of revenues  (43,204)  (352,963)
Gross profit  5,134   88,806 
         
Operating expenses        
General and administrative  2,939,655   2,014,753 
Salaries and benefits  2,776,748   1,785,862 
Technology and development  655,667   1,447,637 
Stock-based compensation  633,713   377,381 
Selling and promotions expense  461,606   135,303 
Depreciation and Amortization  506,995   295,485 
Total operating expenses  7,974,384   6,056,421 
         
Operating loss  (7,969,250)  (5,967,615)
         
Other income (expense)        
Valuation (loss) gain, net  (5,851,149)  (5,267,208)
Interest expense  (392,749)  (164,177)
Contract and legal settlement expenses     (75,000)
Realized gain/(loss) on sale of unconsolidated affiliates  (551,763)  1,984,870 
Other income/(expense), net  326,256   34,444 
Impairment of Intangible Asset  (2,070,000)   
 Total other (expense)  (8,539,405)  (3,487,071)
         
Net (loss) $(16,508,655) $(9,454,686)
Share of non-controlling interest  4,616    
Net (loss) attributable to parent $(16,504,039) $(9,454,686)
         
Other comprehensive (loss) income:        
    Foreign currency translation gain $53,712  $ 
Total other comprehensive gain $53,712  $ 
Comprehensive loss $(16,450,327) $(9,454,686)
         
Weighted average number of common shares outstanding        
Basic  14,728,741   11,773,633 
Diluted  14,728,741   11,773,633 
         
Basic net (loss) per share $(1.12) $(0.80)
         
Diluted net (loss) per share $(1.12) $(0.80)

The accompanying notes are an integral part of these consolidated financial statements. 


Monaker Group, Inc.

Consolidated Statements of Cash Flows

  For the years ended 
  February 28,  February 29, 
  2021  2020 
Cash flows from operating activities:        
Net (loss) $(16,504,039) $(9,454,686)
         
Adjustments to reconcile net loss to net cash (used in) operating activities:        
Amortization and depreciation  193,534   295,485 
Amortization of debt issuance costs  313,462     
Stock based compensation  577,197   706,957 
Valuation loss on unconsolidated affiliates  5,851,149   - 
Realized (gain)/loss on sale of unconsolidated affiliates  551,763   (1,984,870)
Unrealized (gain)/loss on sales of unconsolidated affiliates     5,267,208
Allowance for bad debt  37,500    
Impairment of Intangible Asset  2,070,000   —  
Shares issued for services  1,176,421    
    (Gain)/Loss on Currency Translation         53,712    —  

Changes in operating assets and liabilities:

        
Decrease/(increase) in prepaid expenses and other current assets  (1,877,172)  (264,962)
Increase/(decrease) in accounts payable and accrued expenses  (76,762  141,296 
Increase/(Decrease) in other current liabilities  277,019   355,875 
         
Net cash used in operating activities $(7,356,216) $(4,937,697)
         
Cash flows from investing activities:        
Purchase of Furniture, Fixture and Equipment  (90,710)  (21,345)
Payment related to website development costs and intangible assets  (1,213,738)  (144,534)
Proceeds from sale of unconsolidated affiliates  521,245   1,984,870 
Payments for business acquisition  (1,373,537   
Payment for note receivable, related parties     (37,500)
         
Net cash (used in) / provided by investing activities $(2,156,740)  $1,781,491 
         
Cash flows from financing activities:        
Proceeds from issuance of common stock and warrants  10,015,154   1,785,930 
Proceeds from exercise of common stock warrants  250,000   275,087 
Proceeds from notes payable  3,870,000   (284)
Payments for line of credit and notes payable  (2,802,716)    
Payment of debt issuance costs  (766,000)    
Proceeds from promissory notes, related parties  3,000,000   1,225,000 
Payments for promissory notes, related parties                      (1,575,000)                        — 
Net cash provided by financing activities $11,991,438  $3,285,733 
         
Net increase in cash $2,478,482  $129,527 
         
Cash at beginning of year $162,506  $32,979 
         
Cash at end of year $2,640,988  $162,506 
         
Supplemental disclosure:        
Cash paid for interest $392,749  $164,177 
         
Supplemental disclosure of non-cash investing and financing activity:        
Shares issued for intellectual property purchase $  $4,920,000 
Shares issued for investments  16,929,145    

The accompanying notes are an integral part of these consolidated financial statements.


Monaker Group, Inc.
Consolidated Statements of Stockholders’ Equity
 For the years ended February 28, 2021 and February 29, 2020

 

  Preferred Stock B Preferred Stock C Common Stock Additional Paid-in Accumulated Accumulated Other Stockholders Non-controlling Total
  Shares Amount Shares Amount Shares Amount Capital Deficit Comprehensive Income Equity Interests Equity
                         
Balances, February 28, 2019              9,590,956  $96  $114,265,762  $(106,398,211)    $7,867,647  $  $7,867,647 
                                                 
Common stock issued for cash              1,000,500  $10   1,785,920         1,785,930      1,785,930 
Warrants Exercised              122,350  $1   275,086         275,087      275,087 
Stock issued for stock compensation              188,533  $1   302,305         302,307      302,307 
Shares issued for Investor Relations              174,000  $2   404,648         404,650      404,650 
Shares issued for Intangible Assets              1,968,000  $20   4,919,980         4,920,000      4,920,000 
Shares issued for marketing services              25,000  $   46,500         46,500      46,500 
Net income (loss)                $      (9,454,686)    $(9,454,686)     (9,454,686)
Balances, February 29, 2020              13,069,339  $131  $122,000,201  $(115,852,897)    $6,147,435  $  $6,147,435 
                                                 
Common stock issued for cash              4,542,000  $45  $10,015,109  $     $10,015,154  $  $10,015,154 
Warrants Exercised                  125,000  $1  $249,999  $     $250,000      $250,000 
Shares issued for stock compensation              255,000  $2  $577,195  $     $577,197  $  $577,197 
Shares issued for Investor Relations              460,000  $5  $978,391  $     $978,396  $  $978,396 
Shares issued for marketing services              114,500  $1  $249,324  $     $249,325  $  $249,325 
Shares issued for business acquistion              200,000  $2  $427,998  $     $428,000  $  $428,000 
Shares issued for Investment in Affiliate  10,000,000  $100   3,828,500  $38     $  $16,929,007  $     $16,929,145  $  $16,929,145 
Minority interest acquired for business combination and others                             $15,957      $15,957  $26,781  $42,738 
Currency translation                         $      $53,712  $53,712      $53,712 
Net (loss)    $     $     $  $  $(16,504,039)     $(16,504,039) $(4,616) $(16,508,655)
Balances, February 28, 2021  10,000,000  $100   3,828,500  $38  $18,765,839  $187  $151,427,224  $(132,340,979) $53,712  $19,140,282  $22,165  $19,162,447 

 

NextPlay Technologies, Inc.

Consolidated Statements of Operations and Comprehensive Loss

  

For the year ended

February 28,

  For the period
from
March 6,
2020 to
February 28,
 
  2022  2021 
       
Revenue      
Media subscription and services $4,463,051    
Product development revenue  2,003,447     
Interest and financial services  1,581,421    
Travel services  155,407    
         
Total revenue $8,203,326    
         
Cost of Revenue        
Media subscription and services  1,273,959    
Cost of product development  444,327     
Interest and financial services  490,911    
Travel services  137,170    
         
Total Cost of Revenue $2,346,367    
         
Gross Profit $5,856,959    
         
Operating Expenses        
General and administrative  12,463,578   784,945 
Salaries and benefits  5,722,609   325,473 
Technology and development  1,023,504   3,180 
Stock-based compensation  546,978    
Selling and promotions expense  1,126,231   4,702 
Depreciation and amortization  5,658,299   461,596 
         
Total operating expenses  26,541,199   1,579,896 
         
Operating Loss  (20,684,240)  (1,579,896)
         
Other Income/ (Expense)        
Valuation loss, net  (2,380,157)   
Impairment loss  (11,583,852)   
Allowance for credit loss  (3,136,685)   
Interest expense  (2,505,522)  (51,827)
Realized loss on sale of marketable securities  (59,586)   
Foreign Exchange loss     (2,110)
Other income (expense)  (47,556)  425 
Total other income (expenses)  (19,713,358)  (53,512)
Net loss before tax $(40,397,598)  (1,633,408)
Estimated corporate taxes  (16,876)   
Net loss  (40,414,474)  (1,633,408)
         
Share of non-controlling interest     (2,441,704)  (433,099)
Net loss attributable to parent $(37,972,770)  (1,200,309)
         
Other Comprehensive income (loss):        
Foreign currency translation gain (loss)  (489,746)  20,859 
Total other comprehensive income (loss)    (489,746)  20,859 
         
Comprehensive loss  (40,904,220)  (1,612,549)
         
Total foreign currency translation allocated to:        
Equity holders of the Company  (228,924)  10,221 
Non-controlling interests of the subsidiaries  (260,822)  10,638 
Total foreign currency translation  (489,746)  20,859 
         
Total comprehensive loss attributable to:        
Equity holders of the Company  (38,346,555)  (1,190,088)
Non-controlling interests of the subsidiaries  (2,557,665)  (422,461)
Total comprehensive loss  (40,904,220)  (1,612,549)
         
Weighted average number of common shares outstanding        
Basic  94,513,747   62,400,000 
Diluted  94,513,747   62,400,000 
Basic net loss per share $(0.40)  (0.02)
Diluted net loss per share $(0.40)  (0.02)

The accompanying notes are an integral part of these consolidated financial statements.


Monaker Group, Inc.

NextPlay Technologies, Inc.

Consolidated Statements of Stockholders’ Equity

For the year ended February 28, 2022 and for the period from March 6, 2020 to February 28, 2021

  Preferred B
Shares
  Preferred B
Amount
  Preferred C
Shares
  Preferred C
Amount
  Common Stock
Shares
  Common
Stock
Amount
  Treasury
Stock
  Additional
Paid-in
Capital
  Accumulated
Deficit
  Accumulated
Other
Comprehensive
income
  Total
shareholders’
equity
  Non-controlling
interest
  Shareholders’
equity
 
Balances, March 6, 2020 (inception date)                —                            
Share contribution:                                                    
cash              23,400,000   234      5,196,353         5,196,587   32,184   5,228,771 
Intangible assets              39,000,000   390      6,403,004         6,403,394      6,403,394 
Net loss for the period                          (1,200,309)     (1,200,309)  (433,099)  (1,633,408)
Foreign currency translation adjustment                             10,221   10,221   10,638   20,859 
Balances, February 28, 2021              62,400,000  $624     $11,599,357  $(1,200,309) $10,221  $10,409,893  $(390,277) $10,019,616 
Reduction of share capital              (10,400,000)  (104)     (2,999,896)        (3,000,000)     (3,000,000)
Reverse acquisition recapitalization  10,000,000   100   3,828,500   38   23,854,203   239      62,813,297         62,813,536   6,577,930   69,391,466 
Conversion of preferred shares  (10,000,000)  (100)  (3,828,500)  (38)  11,246,200   112      (112)               
Shares issued for compensation              258,594   3      419,225         419,228      419,228 
Shares issued for consulting services              97,500   1      127,749         127,750      127,750 
Shares issued for debt payment              335,000   3      669,997         670,000      670,000 
Shares issued for business combination              1,925,581   19      4,813,933         4,813,952      4,813,952 
Shares issued for private placement              18,987,342   190      27,849,811         27,850,001      27,850,001 
Warrant cancellation                       (900,000)        (900,000)     (900,000)
Share repurchase              (344,400)  (3)  (771,453)           (771,456)     (771,456)
Foreign currency translation adjustment                             (228,924)  (228,924)  (260,822)  (489,746)
Net loss for the year                          (37,972,770)     (37,972,770)  (2,296,843)  (40,269,613)
Balances, February 28, 2022              108,360,020  $1,084   (771,453) $104,393,361  $(39,173,079) $(218,703) $64,231,210  $3,629,988  $67,861,198 

The accompanying notes are an integral part of these consolidated financial statements.


NextPlay Technologies, Inc.

Consolidated Statements of Cash Flows

  For the year ended
February 28, 2022
  For the period from
March 6,2020 to 
February 28, 2021
 
Cash flows from operating activities:      
Net loss $(37,972,770) $(1,200,309)
         
Adjustments to reconcile net income to net cash used in operating activities:        
Depreciation and amortization  5,601,203   461,596 
Valuation loss, net  2,439,745    
Impairment loss on intangible assets  1,415,746    
Impairment on goodwill  10,168,105    
Allowance for note receivable losses  3,098,967    
Allowance for loan losses  4,273    
Stock based compensation  546,978    
Provision from employee benefits  6,131    
Gain on sale of Computer, furniture and equipment  (49)   
Gain on minority interest  (2,441,704)  (433,099)
(Gain) loss on currency translation  (814,058)  20,859 
         
Changes in operating assets and liabilities:        
Amounts due from related parties  38,062   38,260 
Amounts due to related party  6,014    
Accounts receivable  647,268    
Unbilled receivable  1,243,064    
Loans receivable  (9,622,632)   
Prepaid expenses and other current assets  4,232,573   (235,746)
Work in progress  (90,549)   
Security deposits  107,867    
Operating lease liabilities  (175,721)   
Accounts payable & accrued expenses  1,575,868   343,941 
Deferred revenue - related party  1,513,264    
Other current liabilities  (3,560,449)  11,163 
         
Cash used in operating activities $(22,032,804) $(993,335)
         
Cash flows from investing activities:        
Short term investment  (304,509)   
Payment in advance for investment  (1,000,000)   
Convertible notes receivable - related party     (3,000,000)
Additions of intangible assets - related party  (955,934)  (2,619,047)
Additions of intangible assets  (3,059,922)  (790)
Purchase of computer, furniture, and equipment – related party  (138,291)    
Purchase of computer, furniture, and equipment  (168,889)  (27,174)
Proceeds from disposal of computer, furniture, and equipment  1,435    
Effects of a business combination of NextBank  4,200,006    
Effects of a business combination of NextPlay (Monaker)  9,323,686    
         
Cash provided by (used in) investing activities $7,897,582  $(5,647,011)
         
Cash flows from financing activities:        
Proceeds from issuance of ordinary shares  27,850,000   6,032,184 
Proceed from notes payable - related party     2,171,982 
Repayment of notes payable - related party  (263,515)  (1,118,900)
Treasury stock transaction  (500,000)   
Proceeds from promissory notes - related party  213,515    
Proceeds from promissory notes  2,915,637    
Payments on promissory notes – related party  (215,817)   
Payments on promissory notes  (9,690,567)   
         
Cash provided by financing activities $20,309,253  $7,085,266 
         
Effect of exchange rate changes on cash, cash equivalents and restricted cash      
         
Cash and Cash Equivalents        
         
Net change during the year/period  6,174,031   444,920 
         
Balance, beginning of year/period  444,920    
         
Balance, end of year/period $6,618,951  $444,920 
         
Supplemental disclosures of cash flow information        
Cash paid for interest $816,433  $52,175 
         
NON-CASH TRANSACTIONS        
Addition of intangible assets through exchanging shares     5,599,981 
Settle (a) Convertible note receivable and (b) note payable due to closing share exchange transaction  15,000,000    
Settle (a) Convertible note receivable and (b) share capital increase due to closing share exchange transaction  430,542    
Operating lease right to use assets obtained in exchange for new operating lease liabilities     8,755 
Share issues for consulting and employee compensation  546,978    

The accompanying notes are an integral part of these consolidated financial statements.


NextPlay Technologies, Inc.

Notes to the Consolidated Financial Statements

February 28, 2022 and
February 28, 2021 and February 29, 2020

 

Note 1 – DescriptionSummary of Business Operations and Summary of Significant Accounting Policies

 

Nature of Operations and Business Organization

 

NextPlay Technologies, Inc. and its consolidated subsidiaries (“NextPlay,” “we,” “our,” “us,” or the “Company”) is building a technology solutions company, offering games, in-game advertising, digital asset products and services, connected TV and travel booking services to consumers and corporations within a growing worldwide digital ecosystem. NextPlay’s engaging products and services utilize innovative advertising technology (“AdTech”), Artificial Intelligence (“AI”) and financial technology (“FinTech”) solutions to leverage the strengths and channels of its existing and acquired technologies.

NextPlay is organized into 3 divisions: (i) NextMedia, the Company’s Interactive Digital Media Division; (ii) NextFinTech, the Company’s Finance and Technology Division; and (iii) NextTrip, the Company’s Travel Division.

(i)NextMedia, the Company’s Interactive Digital Media Division

In the Interactive Digital Media Division, NextPlay closed its acquisition of HotPlay Enterprise Limited and its In-Game Advertising (“IGA”) platform on June 30, 2021 and acquired a 51% interest in Reinhart TV AG (“Reinhart”) on June 23, 2021. Reinhart owns 100 percent of Zappware, a 20-year-old interactive Digital TV solutions company based in Belgium. The acquisition of Reinhart gives NextPlay potential reach into tens of millions of households with its IGA, Video Game, FinTech, and Travel products.

(ii)NextFinTech, the Company’s Finance and Technology Division

In the Finance and Technology Division, the Company’s acquisition of International Financial Enterprise Bank (“IFEB”), now called NextBank International, Inc. (“NextBank”), and the conditional approval from the Labuan Financial Services Authority (“Labuan FSA”) to operate a general insurance and reinsurance business, is expected to allow NextPlay to offer individuals and households asset management and banking services, and travel related services such as travel finance and travel insurance, subject to regulatory approval and licensing.

Our Company, in accordance with Thailand foreign ownership laws, holds an indirect control of Longroot (Thailand) Company Limited (“Longroot”), which operates in financial advisory service and owns an Initial Coin Offering (“ICO”) Portal which is approved and regulated by the Thai Securities and Exchange Commission (“Thai SEC”). The Portal enables us to crypto-securitize an array of high-quality alternative assets, such as video games, insurance contracts, and real estate. These digital assets serve as a new asset class, which the Company’s management believes will create significant opportunities to accelerate products and services within the Fintech division’s asset management business.

Effective November 16, 2021, the Labuan Financial Services Authority (the “Labuan FSA”) approved the Company’s application to carry on general insurance and reinsurance business, subject to certain conditions including (i) payment of a $15,000 annual license fee, (ii) submission of evidence reflecting paid up capital amounting to MYR $10.0 mil (approximately to $2,390,000 US), (iii) submission of proof of registration as a member of Labuan International Insurance Association, and (iv) submission of a Management Services Agreement with the appointed insurance manager, (v) submission of a Letter of Undertaking, and (vi) submission of constituent documents to the Registration of Company Unit. The conditions are to be met within 3 months of November 29, 2021, the date Labuan FSA issued a letter confirming the conditional approval. In May 2022, the Company received a permission letter from Labuan FSA to extend the establishment until August 31, 2022. The Company plans to use the general insurance license to issue primary insurance products and the reinsurance license to issue crypto-securitized insurance in collaboration with Longroot.

On October 14, 2021, “Longroot Inc.” (a subsidiary of the Company) changed its name to “Next Fintech Holdings, Inc.” The Company plans to use Next Fintech Holdings, Inc. as the holding company for its FinTech division.

(iii)NextTrip, the Company’s Travel Division

NextTrip our travel division, currently offers booking solutions for both business and leisure travel.


Reverse Acquisition of HotPlay Enterprise Ltd.

On July 23, 2020, the Company (then known as Monaker Group, Inc. and its subsidiaries (“Monaker,)) entered into a Share Exchange Agreement (as amended from time to time, thewe”, “our”, “us”, or “CompanyShare Exchange Agreement”) is an innovative technology company that is building next generation solutionswith HotPlay Enterprise Limited (“HotPlay”) and the stockholders of HotPlay (the “HotPlay Stockholders”). Pursuant to power the travel, gaming, and cryptocurrency industries. We believe the most promising partShare Exchange Agreement, Monaker exchanged 52,000,000 shares of its common stock for 100% of the business planissued and outstanding capital of HotPlay, with HotPlay continuing as a wholly owned subsidiary of Monaker. The reverse acquisition between HotPlay and Monaker was completed on June 30, 2021. After the reverse acquisition, effective July 9, 2021, Monaker changed its name to “NextPlay Technologies, Inc.” The HotPlay acquisition was accounted for our travel operations isas a reverse acquisition with HotPlay being deemed the acquiring company for accounting purposes. The comparative figure for the period as from incorporation date to February 28, 2021 represents financial position and operating results of Monaker’s proprietary Booking Engine and sizeable alternative lodging rental (ALR) properties into well-established marketplaces (i.e., a business-to-business (B2B) model) thereby facilitating easy access of alternative lodging rentals inventory to contracted global distributor partners.Hotplay Enterprise Ltd.

 

Reverse Acquisition of HotPlay Enterprise Ltd. (6/30/21)
Fair Value of Monaker assets acquired   
Cash $7,837,802 
Current assets $25,568,584 
Non-current assets $23,078,256 
Net assets acquired $56,484,642 
     
Fair Value of Monaker liabilities assumed    
Current liabilities $32,482,319 
Non-current liabilities $5,420,131 
Net liabilities assumed $37,902,450 
     
Net assets acquired $18,582,192 

Purchase consideration   
Number of Monaker common shares outstanding as of 6/30/2021  23,854,203 
Monaker share price as of 6/30/2021 $2.24 
Preliminary estimate of fair value of common shares $53,433,415 
Fair value of total estimated consideration transferred $53,433,415 
Purchase Price Allocation    
Fair value of Monaker net assets acquired as of 6/30/2021 $18,582,192 
Fair value of total estimated consideration transferred $53,433,415 
Goodwill $34,851,223 

The Company is in the process of assessing the fair value of the identifiable assets acquired and liabilities assumed at the acquisition date, therefore the assets acquired and liabilities assumed were provisionally recorded. The assessment is to be completed within a period of one year from the acquisition date, pursuant to the measurement period allowed under ASC 805. During the measurement period, the Company is to retrospectively adjust the provisional amounts recognized at the acquisition date, and recognize additional assets or liabilities, if it obtains new information about facts and circumstances that existed as of the acquisition date.

The Company’s travel operation serves three major constituents: (1) property managers, (2) travelers,management is in the process of assessing the fair value of the assets and (3) other travel/lodging distributors. Property managers integrate their detailed property listings intoliabilities and provisionally adjusted the Monaker Booking Engine withfair value of the goalassets and liabilities based on the new information that existed as of reachingthe acquisition date, which resulted in a broad audience$ 3.1 million decrease of travelers seeking ALRs, through distribution channels they could not access otherwise.the assets. The fair value of the assets and liabilities acquired are provisionally recorded as of February 28, 2022.

 


As of February 28, 2021Common Stock Shares
Before Recasting144,000
Reduction in share capital(24,000)
Total Before Recasting120,000
Adjustment for recasting62,280,000
After Recasting(1) 62,400,000

(1)The recasted common stock represented cash and intangible assets contributed as equity from HotPlay.

In the accounting for the reverse acquisition, the share capital of the legal acquiree (HotPlay) replaced the share capital of the legal acquirer (Monaker). The authorized number of shares of common stock is recasted to present the historical equity of HotPlay on the basis of the 52,000,000 shares issued to HotPlay shareholders on a pro rata basis. The net assets acquired increased the additional paid-in capital.

Principles of Consolidation

 

The accompanyingCompany’s consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries.wholly-owned subsidiaries, including acquired businesses from the dates of acquisition. All material inter-companyintercompany accounts and transactions and accounts have been eliminated in consolidation.

 

Use of Estimates

 

The preparation of the consolidated financial statements in conformity with GAAPaccounting principles generally accepted in the United States (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates. These differences could have a material effect on the Company’s future results of operations and consolidated financial position. Significant items subject to estimates and assumptions include the fair value of investments, the carrying amounts of intangible assets, depreciation and amortization, the valuation of stock options and deferred income taxes.taxes, purchase price allocation in connection with the business combination and allowance for credit losses.

 

Cash and Cash Equivalents

 

For purposes of balance sheet presentation and reporting of cash flows, the Company considers all unrestricted demand deposits, money market funds and highly liquid debt instruments with an original maturity of less than 90 days to be cash and cash equivalents. The Company had no cash equivalents aton February 28, 20212022, and February 29, 2020.28, 2021.

 

Website Development CostsShort term investment

 

Short term investment is short-term cash deposit with a maturity date more than three months required by the Office of the Commissioner of Financial Institutions (“OCIF”) for business purpose of a subsidiary.

Accounts Receivable, Other Receivable, Unbilled Receivables

A receivable is recognized when the Company has an unconditional right to receive consideration. If revenue has been recognized before the Company has an unconditional right to receive consideration, the amount is presented as an unbilled receivable. A receivable is measured at transaction price less impairment loss and unbilled receivables are measured at the amount of consideration that the Company is entitled to, less credit loss. The Company accountscalculates its allowance for website development costs in accordance with ASC 350-50 “Website Development Costs”. Accordingly, all costs incurredcurrent expected credit losses (CECL) based on lifetime expected credit losses at each reporting date. CECLs are calculated based on its historical credit loss experience and adjusted for forward-looking factors specific to the debtors and the economic environment. A receivable is written off when there is no reasonable expectation of recovering the contractual cash flows.


Loans Receivable and Allowance for Loan Losses

Loans Receivable

Loans that the Company has the intent and ability to hold for the foreseeable future, or until maturity or pay-off, generally are stated at their outstanding principal amount adjusted for charge-offs and the allowance for loan losses. Interest is accrued as earned based upon the daily outstanding principal balance. 

The accrual of interest is generally discontinued at the time a loan is 90 days past due unless the credit is well-secured and in the planning stageprocess of collection. Past due status is based on contractual terms of the loan. In all cases, loans are expensed as incurred, costs incurredplaced on non-accrual or charged-off at an earlier date if collection of principal or interest is considered doubtful.

All interest accrued but not collected for loans placed on nonaccrual or charged-off is reversed against interest income. Interest on these loans is accounted for on the cash-basis or cost recovery method, until qualifying for return to accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

Allowance for Loan Losses

The allowance for loan losses is evaluated on a regular basis by Management and is based upon collectability of loans, based on historical experience, the nature and volume of the loan portfolio, adverse situations that may affect the borrower’s ability to repay, estimated value of any underlying collateral and prevailing economic conditions. This represents management’s estimate of current expected credit losses (“CECL”) in the website applicationCompany’s loan portfolio over its expected life, which is the contract term being the reasonable and infrastructure development stagesupportable period that meet specific criteriawe can reasonably and supportably forecast future economic conditions to estimate expected credit losses. The historical loss experience is to be adjusted for asset-specific risk characteristics and economic conditions, including both current conditions and reasonable and supportable forecasts of future conditions.

This evaluation is inherently subjective as it requires estimates that are capitalizedsusceptible to significant revision as more information becomes available. Due to potential changes in conditions, it is possible that changes in estimates will occur and costs incurredthat such changes could be material to the amounts reported in the day-to-day operation of the website are expensed as incurred. AllCompany statements.

Work In Progress

Work in progress represents costs associated with software development according to contracts with customers. Work in progress mainly consists of employee and payroll related expenses and recorded on a project where milestone has not been made.


Prepaid Expenses and Other Current Assets

The Company records cash paid in advance for goods and/or services to be received in the websitesfuture as prepaid expenses. Prepaid expenses are subjectexpensed over time according to straight-line amortizationthe period indicated on the respective contract. Other current assets are recognized when it is probable that the future economic benefits will flow to the Company and the asset has a cost or value that can be measured reliably. It is then charged to expense over the expected number of periods during which economic benefits will be realized.

Advance for Investment

Advance for investment represents cash deposits transferred to the potential seller as a deposit payment as stipulated in the investment purchase agreement, mainly for potential acquisition of asset or business.

Investment in Unconsolidated Affiliates

Investment in unconsolidated affiliates is recognized at cost less valuation loss.

Computers, Furniture and Equipment

The Company purchases computers, laptops, furniture and fixtures. These are originally recorded at cost and stated at cost less accumulated depreciation and impairment if any. The computers and laptops are depreciated over a three-year period. useful life of 3 - 5 years, respectively. The furniture and fixture are depreciated over a useful life of 5 and 10 years, respectively. Straight-line depreciation is used for all computers, laptops, furniture and equipment.

 


Intangible Assets

Software Development Costs

 

The Company capitalizes internal software development costs subsequent to establishing technological feasibility of a software application in accordance with guidelines established by ASC 985-20-25“ASC 985-20-25” Accounting for the Costs of Software to Be Sold, Leased, or Otherwise Marketed, requiring certain software development costs to be capitalized upon the establishment of technological feasibility. The establishment of technological feasibility 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 product is available for general release to customers. Capitalized costs are amortized based on the straight-line method over the remaining estimated economic life of the product.

Website Development Costs

 

Fixed Assets

The Company purchases computers, laptops, furnitureaccounts for website development costs in accordance with Accounting Standards Codification (“ASC”) 350-50 “Website Development Costs”. Accordingly, all costs incurred in the planning stage are expensed as incurred, costs incurred in the website application and fixture. The computersinfrastructure development stage that meet specific criteria are capitalized and laptopscosts incurred in the day-to-day operation of the website are recordedexpensed as fixed assetsincurred. All costs associated with the websites are subject to straight-line amortization over a useful life of 3 years. The furniture and fixture are recorded as a fixed asset with a useful life of 5 years. Straight-line depreciation is used for all fixed assets.

Business Combinationthree-year period.

 


Goodwill

Goodwill represents the future economic benefits arising from assets acquired in a business combination that is not individually identified and separately recognized as an asset. Adjustments made to the acquisition accounting during the measurement period may affect the recognition and measurement of assets acquired and liabilities assumed, any non-controlling interest “NCI”, consideration transferred and goodwill or any bargain purchase gain, as well as the remeasurement of any pre-existing interest in the acquiree.

In our assessment, goodwill arisen from reverse acquisition is allocated systematically and reasonably to 3 reporting segment and existing operating entities on the closing of reverse acquisition date which are

i)NextMedia segment consisted of

-Reinhart Interactive TV AG

-Zappware N.V

-HotPlay Enterprise Ltd. and HotPlay (Thailand) Co., Ltd., became under NextMedia segment after the reverse acquisition date

ii)NextFintech segment consisted of

-Next Fintech Holdings, Inc (formerly Longroot Inc)

-Longroot Limited

-Longroot Holding (Thailand) Co., Ltd.

-Longroot (Thailand) Co., Ltd.

-Next Bank International, Inc, became under NextFintech segment on its acquisition date, subsequent to reverse acquisition.

iii)NextTrip segment consisted of

-NextTrip Holdings, Inc.

-Extraordinary Vacations USA, Inc.

These segments are reviewed regularly by Chief Operating Decision Maker (“CODM”). The chief operating decision makers allocate resources and assess performance of the business and other activities at the single operating segment level. The reporting units for impairment testing purpose are determined as the lowest level of cash generating unit below the operating segments since the components constitute a business for which discrete financial information is available, and CODM regularly reviews the operating results of that components. Certain components share similar economic characteristic and deem single reporting unit. As a result, there are 5 reporting units, which are

i)Reinhart/Zappware consisted of Reinhart Interactive TV AG and Zappware N.V,

ii)HotPlay consisted of HotPlay Enterprise Ltd. and HotPlay (Thailand) Co., Ltd.,

iii)Longroot consisted of Next Fintech Holdings, Inc, Longroot Limited, Longroot Holding (Thailand) Company Limited and Longroot (Thailand) Co., Ltd.

iv)NextBank,

v)NextTrip consisted of NextTrip Holdings, Inc and Extraordinary Vacations USA, Inc.


The Company assigned assets and liabilities to each reporting unit based on either specific identification or by using judgment for the remaining assets and liabilities that are not specific to a reporting unit. Goodwill was assigned to the reporting units based on a combination of specific identification and relative fair values.

Impairment of Intangible Assets

In accordance with ASC 350-30-65 “Goodwill and Other Intangible Assets”, 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 the Company considers important, which could trigger an impairment review include the following but not limited to:

1.Significant underperformance compared to historical or projected future operating results;
2.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.

In impairment testing, goodwill acquired in a business combination is allocated to each of the Company’s reporting unit that are expected to benefit from the synergies of the combination. The Company estimates the recoverable amount of each reporting unit to which the goodwill and intangible assets relates. Where the recoverable amount of the reporting unit is less than the carrying amount, an impairment loss is recognized in profit or loss. Impairment losses cannot be reversed in future periods. During the fourth quarter of each fiscal year, the Company carries out annual impairment reviews at the reporting unit level in respect of goodwill and intangible assets by performing qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. If those impairment indicators exist, the quantitative assessment is required to assess the recoverable amount of the reporting unit by performing step 1 of the two-step goodwill impairment test. If we perform step 1 and the carrying amount of the reporting unit exceeds its fair value, we would perform step 2 to measure such impairment. In determining value in use, the estimated future cash flows are discounted to their present value to reflect current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs to sell, an appropriate valuation model is used. These calculations are corroborated by a valuation model that, based on information available, reflects the amount that the Company could obtain from the disposal of the asset in an arm’s length transaction between knowledgeable, willing parties, after deducting the costs of disposal.

In determining allowance for impairment of goodwill and intangible assets, the management is required to exercise judgements regarding determination of the recoverable amount of the asset, which is the higher of its fair value less costs of disposal and its value in use.

Accounts payable, note payables and accrued expenses

Accounts payable are recognized when the Company receives invoices and accrued expenses are recognized when it is probable that an outflow of resources embodying economic benefits will result from the settlement of a present obligation and the amount at which the settlement will take place can be measured reliably.

Notes payables are recognized at cost net transaction costs. Transaction costs are amortized over the terms of notes payable using effective interest rate method.

Customer Demand Deposits Payable

Customer deposit represents cash demand deposits payable received from customers at NextBank.


Business Combination

The Company uses the acquisition method of accounting in accordance with ASC 805, Business Combinations (“ASC 805805”). ASC 805 requires, among other things, that assets acquired, and liabilities assumed be recognized at their fair values, as determined in accordance with ASC 820, Fair Value Measurements, as of the closing date. ASC 805 establishes a measurement period to provide the Company with a reasonable amount of time to obtain the information necessary to identify and measure various items in a business combination and cannot extend beyond one year from the acquisition date.

 

Impairment of Intangible AssetsNon-controlling interests

 

In accordance with ASC 350-30-65 “Goodwill and Other Intangible Assets”,Non-controlling interests represent the Company assessesequity in a subsidiary that is not attributable directly or indirectly to the impairment of identifiable intangible assets whenever events or changes in circumstances indicate thatparent. At the carrying value may not be recoverable. Factorsacquisition date, the Company considers important, which could trigger an impairment review include the following:

1. Significant underperformance compared to historical or projected future operating results.

2. 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 withnon-controlling interest at its proportionate interest in 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. Intangibleidentifiable net assets that have finite useful lives are amortized over their useful lives. The Company incurred amortization expense of $210,507 and $293,804 during the years ended February 28, 2021 and February 29, 2020, respectively.

Convertible Debt Instruments

The Company records debt net of debt discount for beneficial conversion features and warrants, on a relative fair value basis. Beneficial conversion features are recorded pursuant to the Beneficial Conversion and Debt Topics of the Financial Accounting Standards Board (FASB) Accounting Standards Codification. The amounts allocated to warrants and beneficial conversion rightsacquiree. Changes in the Company’s interest in a subsidiary that do not result in a loss of control are recordedaccounted for as debt discount and as additional paid-in-capital. Debt discount is amortized to interest expense over the life of the debt.equity transactions.

 


Foreign Currency Translation

 

The Company prepares the consolidated financial statements of its foreign subsidiaries using the local currencyU.S. dollars as the functional currency. The assets and liabilities of the Company’s foreign subsidiaries are translated in tointo U.S. dollars at the rates of exchange at the balance sheet date with the resulting translation adjustments included as a separate component of stockholder’sstockholders’ equity through other comprehensive income (loss) in the consolidated statements of operations and comprehensive loss.

 

Income and expenses are translated at the average monthly rates of exchange. The Company includes realized gains and losses from foreign currency transactions in other income (expense), net in the consolidated statements of net and comprehensive loss.

 

The effect of foreign currency translation on cash and cash equivalents is reflected in cash flows from operating activities on the consolidated statements of cash flows.

 

Derivative Instruments

The Company enters into financing arrangements that consist of freestanding derivative instruments or are hybrid instruments that contain embedded derivative features. The Company accounts for these arrangements in accordance with ASC topic 815, Accounting for Derivative Instruments and Hedging Activities (“ASC 815”) as well as related interpretations of this standard. In accordance with this standard, derivative instruments are recognized as either assets or liabilities in the balance sheet and are measured at fair values with gains or losses recognized in earnings. Embedded derivatives that are not clearly and closely related to the host contract are bifurcated and are recognized at fair value with changes in fair value recognized as either a gain or loss in earnings. The Company determines the fair value of derivative instruments and hybrid instruments based on available market data using appropriate valuation models, considering all of the rights and obligations of each instrument.

The Company estimates fair values of derivative financial instruments using various techniques (and combinations thereof) that are considered consistent with the objective measuring fair values. In selecting the appropriate technique, the Company considers, among other factors, the nature of the instrument, the market risks that it embodies and the expected means of settlement. For less complex derivative instruments, such as freestanding warrants, the Company generally uses the Black-Scholes model, adjusted for the effect of dilution, because it embodies all of the requisite assumptions (including trading volatility, estimated terms, dilution and risk-free rates) necessary to determine the fair value of these instruments. Estimating fair values of derivative financial instruments requires the development of significant and subjective estimates that may, and are likely to, change over the duration of the instrument with related changes in internal and external market factors. In addition, option-based techniques (such as Black-Scholes model) are highly volatile and sensitive to changes in the trading market price of our common stock. Since derivative financial instruments are initially and subsequently carried at fair values, our income (expense) going forward will reflect the volatility in these estimates and assumption changes. Under the terms of this accounting standard, increases in the trading price of the Company’s common stock and increases in fair value during a given financial period result in the application of non-cash derivative expense. Conversely, decreases in the trading price of the Company’s common stock and decreases in trading fair value during a given financial period result in the application of non-cash derivative income.

Based upon ASC 815-25 the Company has adopted a sequencing approach regarding the application of ASC 815-40 to its outstanding convertible debentures. Pursuant to the sequencing approach, the Company evaluates its contracts based upon earliest issuance date.

In July 2017, the FASB issued ASU 2017-11, Earnings Per Share (Topic 260) Distinguishing Liabilities from Equity (Topic 480) Derivatives and Hedging (Topic 815): I. Accounting for Certain Financial Instruments with Down Round Features, II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception. ASU 2017-11 intends to reduce the complexity associated with the issuer’s accounting for certain financial instruments with characteristics of liabilities and equity. Specifically, the FASB determined that a down round feature (as defined) would no longer cause a freestanding equity-linked financial instrument (or an embedded conversion option) to be accounted for as a derivative liability at fair value with changes in fair value recognized in current earnings and is effective in fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. The Company adopted the new standard during 2017, preventing the need to account for several outstanding warrants that contain down round features as derivative instruments.

Reclassification

Certain prior period amounts have been reclassified to conform with the current period presentation. The reclassification has no impact on the total assets, total liabilities, stockholders’ equity and net loss for the period.

Earnings per Share

 

Basic earnings per share are computed by dividing net income or loss by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share isare computed by dividing net income (loss) by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during each period. For the years ended February 28, 2022 and 2021, warrants were excluded from the computation of diluted net loss per share, as the result of the computation was anti-dilutive.

 


Revenue Recognition

 

We recognizeThe Company recognizes revenue in accordance with ASC 606 which involves identifying the contracts with customers, identifying performance obligations in the contracts, determining transactions price, allocating transaction price to the performance obligation and recognizing revenue when the performance obligation is satisfied. Types of revenue consist of:

Media Subscription and Services

Media subscription revenue is the revenue from sales of software to 3rd party, activation of license and initial activation of license. The Company acts as principal as it considers obtaining control of the specified goods or services before they are transferred to the customer, as well as being a party primarily responsible for fulfillment, inventory risk, and discretion in establishing price. The revenue is recognized at a point in time when the Company makes the intellectual property available and the obligations to the customers fulfilled and provided activation/initial activation of license to its customers.

Revenue from maintenance service is recognized over the time based on contractual performance obligation monthly.

Revenue from product development is recognized at the point in time when the contractual performance obligation is met for a specific milestone of the contract.

The Company’s deferred revenue reflects amounts received in advance that will be recognized as revenue over time or as services are rendered. Deferred revenue expected to be realized within one year is classified as a current liability and the remaining is recorded as a non-current liability.


Interest and Financial services

NextBank International provides traditional banking services in niche-focused businesses, including commercial and residential real estate and the origination and sale of loans, among other types of lending services. Revenues are categorized as interest income and financial services. NextBank is primarily responsible for fulfilling the services to clients, bear risks on its loan products, has discretion in establishing the price, hence it acts as principal, and recognizes revenues at the gross amount received for the services.

Interest is accrued as earned based upon the daily outstanding principal balance. The accrual of interest is generally discontinued at the time a loan is 90 days past due unless the credit is well-secured and in the process of collection. Past due status is based on contractual terms of the loan. In all cases, loans are placed on non-accrual or charged- off at an earlier date if collection of principal or interest is considered doubtful.

All interest accrued but not collected for loans placed on nonaccrual or charged-off is reversed against interest income. Interest on these loans is accounted for on the cash-basis or cost recovery method, until qualifying for return to accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

Financial services are categorized as follows:

-Origination fee is recognized at point of time when the loan contract is mutually originated between a customer and the Company.

-Deposit account fees and other administrative fee are generally recognized upon completion of services (wire in/out processing, certain deposit condition met, etc.).

Travel

The Company recognizes revenue when the customer has purchased the product, the occurrence of the earlier of date of travel or the date of cancellation has expired, as satisfaction of the performance obligation, the sales price is fixed or determinable and collectability is reasonably assured.

 

Revenue for customer travel packages purchased directly from the Company are recorded gross (the amount paid to the Company by the customer is shown as revenue and the cost of providing the respective travel package is recorded to cost of revenues).

 

We generate ourThe Company generates revenues from sales directly to customers as well as through other distribution channels of tours and activities at destinations throughout the world. We also generate revenue from commissions on bookings and sales of ancillary products and services, where any commissions received was insignificant.

 

The Company controls the specified travel product before it is transferred to the customer and is therefore a principal, include 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).

 

Cost of Revenue

 

Cost revenue from digital media mainly consists of cost of employees - software developer, other sub-contractors and amortization.

Cost of revenue from finance and technology mainly consists of interest expense, loan related commissions, amortization of core banking software and technology facilities and infrastructures.

Cost of revenue from travel mainly consists of cost of the tours and activities, transactionssales commissions paid to agents and employees who sell travel package, and merchant fees charged by credit card processors.

 

Comparative figures

The certain comparative figure has been reclassified to conform with the current year presentation.


Selling and Promotions Expense

 

Selling and promotion expenses consist primarily of advertising and promotional expenses, expenses related to our participation in industry conferences, and public relations expenses.

Advertising Expense

Advertising costs are charged to expense as incurred and are included in selling and promotions expense in the accompanying consolidated financial statements. Advertising expense for the years ended February 28, 2021 and February 29, 2020, was $461,606 and $135,303, respectively.

Stock Based Compensation

Stock-based compensation is accounted for based on the requirements of ASC 718, “Compensation – Stock Compensation”, which requires recognition in the financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting period). The ASC also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award. The Company recognizes compensation on a straight-line basis over the requisite service period for each award.

The Company adopted ASU No. 2018-7, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting awards (“ASU 2018-7”) on January 1, 2018. As a result, awards made to independent consultants/contractors on or subsequent to January 1, 2018 are measured based on the grant date closing price of the Company’s common stock consistent with awards made to the Company’s employees and directors. Unvested awards issued to independent consultants/ contractors as of the adoption date of January 1, 2018 were remeasured at the adoption date stock price. The Company will recognize the remaining unrecognized value of unvested awards over the remaining performance period, with no further remeasurement through the performance completion date. Prior to the adoption of ASU 2018-7, the Company determined that the fair value of the awards made to independent contractors would be measured based on the fair value of the equity instrument as it is more reliably measurable than the fair value of the consideration received. The Company used the grant date as the performance commencement date,expenses, and the measurement date was the date the services were completed, which was the vesting date. As a result, the Company recorded stock-based compensation for these awards over the vesting period on a straight-line basis with periodic adjustments during the vesting period for changes in the fair value of the awards. If there are any modifications or cancellations of the underlying unvested share-based awards, the Company may be required to accelerate, increase or cancel any remaining unrecognized or previously recorded stock-based compensation expense.expense is recognized when incurred.

 


Warrant ModificationsIncome Taxes

 

The Company treats a modification of the terms or conditions of an equity award in accordance with ASC Topic 718-20-35-3 by treating the modification as an exchange of the original award for a new award. In substance, the entity repurchases the original instrument by issuing a new instrument of equal or greater value, incurring additional compensation cost for any incremental value. Incremental compensation cost shall be measured as the excess, if any, of the fair value of the modified award determined in accordance with the provisions of this Topic over the fair value of the original award immediately before its terms are modified, measured based on the share price and other pertinent factors at that date.

Income Taxes

The Company accounts for income taxes pursuant to the provisions of ASC 740-10, “Accounting for Income Taxeswhich requires, among other things, anin accordance with the liability method, whereby deferred tax asset and liability approach to calculating deferred income taxes. The asset and liability approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporaryaccount balances are determined based on differences between the carrying amountsfinancial reporting and the tax bases of assets and liabilities.liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. These differences result in deferred tax assets and liabilities, which are included in our consolidated balance sheets. We then assess the likelihood that the deferred tax assets will be recovered from future taxable income and the reversal of temporary taxable differences. A valuation allowance is provided to offset any netestablished against deferred tax assets to the extent we believe that recovery is not likely. Significant judgment is required in determining any valuation allowance to be recorded. In assessing the need for a valuation allowance, we consider all available evidence, including past operating results, estimates of future taxable income, reversals of taxable temporary differences and the feasibility of tax planning over the periods in which management believes itthe temporary differences are deductible. In the event we change our determination as to the amount of deferred tax assets that can be realized, we will adjust our valuation allowance with a corresponding impact to the provision for income taxes in the period in which the determination is more likely than notmade.

The difference between our effective income tax rate and the federal statutory rate is primarily a function of the mix of uncertain tax positions and permanent differences including non-deductible charges. Our provision for income taxes is subject to volatility and could be adversely impacted if earnings or tax rates differ from our expectations or if new tax laws are enacted.

Significant judgment is required in evaluating any uncertain tax positions, including the timing and amount of deductions and allocations of income among various tax jurisdictions. We are required to identify, evaluate and measure all uncertain tax positions taken or to be taken on tax returns and to record liabilities for the amount of these positions that the net deferred asset willmay not be realized.

The Company follows the provisions of the ASC 740 -10 related to, Accounting for Uncertain Income Tax Positions. When tax returns are filed, it is highly certain that some positions taken wouldsustained, or may only partially be sustained, upon examination by the relevant taxing authorities, while othersauthorities. Although we believe that our estimates and judgments are reasonable, actual results may differ from these estimates. Some or all of these judgments are subject to uncertainty aboutreview by the meritstaxing authorities. We adjust these reserves in light of changing facts and circumstances, such as the position takenclosing of an audit or the amountrefinement of an estimate. To the positionextent that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefitfinal outcome of a tax positionmatter is recognized indifferent than the financial statementsamount recorded, such differences will impact the provision for income taxes in the period duringin which based on all available evidence, management believes itthe determination is more likely than notmade. The provision for income taxes includes the impact of reserve provisions and changes to reserves that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measuredconsidered appropriate, as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measuredwell as described above should be reflected as a liability for uncertain tax benefits in the accompanying balance sheet along with any associatedrelated net interest and penalties that would be payable to the taxing authorities upon examination. The Company believes its tax positions are all highly certain of being upheld upon examination. As such, the Company has not recorded a liability for uncertain tax benefits.penalties.

 

The Company hasWe have adopted ASC 740-10-25 Definition of Settlement, which provides guidance on how an entity should determine whether a tax position is effectively settled for the purpose of recognizing previously unrecognized tax benefits and provides that a tax position can be effectively settled upon the completion of an examination by a taxing authority without being legally extinguished. For tax positions considered effectively settled, an entity would recognize the full amount of tax benefit, even if the tax position is not considered more likely than not to be sustained based solely on the basis of its technical merits and the statute of limitations remains open. As of February 28, 2021,2022, the Company’s income tax returns for tax years ending February 29, 2020, February 28, 2019, 2018, 2017, February 29, 2016, February 28,2021 - 2015 and 2014 remain potentially subject to audit by the taxing authorities.

 

Monaker Group, Inc. followsWe follow the guidance of ASC 740, “Income Taxes.Taxes.” Deferred income taxes reflect the net effect of (a) temporary difference between carrying amounts of assets and liabilities for financial purposes and the amounts used for income tax reporting purposes, and (b) net operating loss carry-forwards.carry- forwards. No current tax provision has been made in the accompanying statement of income (loss) because no taxes are due currently or were paid previously. Similarly, no deferred tax asset attributable to the net operating loss carry-forwardcarry- forward has been recognized, as it is not deemed likely to be realized.

 


Our effective tax rate was 25.5%Stock Based Compensation

Stock-based compensation is accounted for based on the requirements of ASC 718, “Compensation – Stock Compensation”, which requires recognition in the financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the years ended February 28, 2021 and February 29, 2020. On December 22, 2017,award (presumptively, the United States enacted tax reform legislation through the Tax Cuts and Jobs Act significantly changed the existing U.S. tax laws, including a reduction in the corporate tax rate from 35% to 21%, a move from a worldwide tax system to a territorial system, as well as other changes. As a result of enactmentvesting period). The ASC also requires measurement of the legislation, we have not incurred additional income tax expense duringcost of employee and director services received in exchange for an award based on the February 28, 2021 and February 29, 2020 fiscal year-ends.grant-date fair value of the award. The Company does not have exposure to taxrecognizes compensation on accumulated foreign earnings or an exposure froma straight-line basis over the repeal of foreign tax credits.requisite service period for each award and recognizes forfeitures as when they occur.

 


Warrants

The Company accounts for the warrants pursuant to share exchange agreements in accordance with the guidance contained in ASC 815, under which the Warrants do not meet the criteria for equity classification and must be recorded as liabilities. All such warrant agreements contain fixed strike prices and number of shares that may be issued at the fixed strike price, and do not contain exercise contingencies that adjust the strike price or number of shares issuable upon settlement of the warrants. All such warrant agreements are exercisable at the option of the holder and settled in shares of the Company. The warrants are qualified as equity-linked instrument embedded in a host instrument whereby do not meet definition of derivative, therefore it’s not required to separate the embedded component from its host.

The Company treats a modification of the terms or conditions of an equity award in accordance with ASC Topic 718-20-35-3, by treating the modification as an exchange of the original award for a new award. In substance, the entity repurchases the original instrument by issuing a new instrument of equal or greater value, incurring additional compensation cost for any incremental value. Incremental compensation cost is measured as the excess, if any, of the fair value of the modified award determined in accordance with the provisions of ASC Topic 718-20-35-3 over the fair value of the original award immediately before its terms are modified, measured based on the share price and other pertinent factors at that date.

Fair Value of Financial Instruments

 

The Company has adopted the provisions of ASC Topic 820, Fair Value Measurements, which defines fair value, establishes a framework for measuring fair value in GAAP, and expands disclosures about fair value measurements. ASC 820 does not require any new fair value measurements, but providesit does provide guidance on how to measure fair value by providing a fair value hierarchy used to classify the source of the information. The fair value hierarchy distinguishes between assumptions based on market data (observable inputs) and an entity’s own assumptions (unobservable inputs).

The hierarchy consists of three levels:

 

Level 1 - Quoted prices in active markets for identical assets or liabilities.

Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets of liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

 

The Company uses Level 3 inputs for its valuation methodology for the warrant derivative liabilities and embedded conversion option liabilities.

 

Financial instruments consist principally of cash, accounts receivable, prepaid expenses, notesinvestments in unconsolidated affiliates, other receivable, net,other receivable, related parties, accounts payable, accrued liabilities, notes payable, related parties, line of credit and certain other current liabilities. The carrying amounts of such financial instruments in the accompanying balance sheets approximate their fair values due to their relatively short-term nature. It is management’s opinion that the Company is not exposed to any significant currency or credit risks arising from these financial instruments.

 

Leases

The Company utilizes operating leases for its offices and cars. The Company determines if an arrangement is a lease at inception. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s contractual obligation to make lease payments under the lease. Operating leases are included in operating lease right-to-use assets, non-current, and operating lease liabilities current and non-current captions in the consolidated balance sheets.

Operating lease right-to-use assets and liabilities are recognized on the commencement date based on the present value of lease payments over the lease term. Lease agreements may contain periods of free rent or reduced rent, predetermined fixed increases in the minimum rent and renewal or termination options, all impacting the determination of the lease term and lease payments to be used in calculating the lease liability. Lease cost is recognized on a straight-line basis over the lease term. The Company uses the implicit rate in the lease when determinable. As most of the Company’s leases do not have a determinable implicit rate, the Company uses a derived incremental borrowing rate based on borrowing options under its credit agreement. The Company applies a spread over treasury rates for the indicated term of the lease based on the information available on the commencement date of the lease.


Segment Reporting

Accounting Standards Codification 280-10 “Segment Reporting” established standards for reporting information about operating segments in annual consolidated financial statements and required selected information about operating segments in interim financial reports issued to stockholders. It also established standards for related disclosures about products, services, and geographic areas. Operating segments are defined as components of the enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance.

An operating segment component has the following characteristics:

a.It engages in business activities from which it may recognize revenues and incur expenses (including revenues and expenses relating to transactions with other components of the same public entity).
b.Its operating results are regularly reviewed by the public entity’s chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance.
c.Its discrete financial information is available.

The Company has three operating segments consisting of (i) the NextMedia Division, which consists of HotPlay and Reinhart/Zappware, (ii) the NextFinTech Division, which consists of Longroot and NextBank, and (iii) NextTrip Division, which includes NextTrip holdings. The Company’s chief operating decision makers are considered to be the Co-Chief Executive Officers. The chief operating decision makers allocate resources and assesses performance of the business and other activities at the single operating segment level.

See Note 12 Business Segment Reporting for details on each segment unit.

Recent Accounting Pronouncements

July 2017, the FASB issued ASU 2017-11, ASC Subtopic 260 “Earnings Per Share”. The amendments in this update that relate to the recognition, measurement, and earnings per share of certain freestanding equity-classified financial instruments that include down round features affect entities that present earnings per share in accordance with the guidance in Topic 260, Earnings Per Share. and when the down round feature is included in an equity-classified freestanding financial instrument, the value of the effect of the down round feature is treated as a dividend when it is triggered and as a numerator adjustment in the basic EPS calculation. This reflects the occurrence of an economic transfer of value to the holder of the instrument, while alleviating the complexity and income statement volatility associated with fair value measurement on an ongoing basis. Convertible instruments are unaffected by the Topic 260 amendments in this Update.

Income Taxes (TOPIC 740)

In December 2019, the FASB issued ASU 2019-12, ASC Subtopic 740 “Income Taxes”: Simplifying the Accounting for Income Taxes

On December 18, 2019, the FASB issued new guidance that simplifiesTaxes. The amendments in this Update simplify the accounting for income taxes as part ofby removing the Board’s overall initiative to reduce complexity in accounting standards. Amendments include the removal of certain exceptions to the general principles of ASC 740, Income taxes. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance.following exceptions:

For public business entities,

1.Exception to the incremental approach for intra-period tax allocation when there is a loss from continuing operations and income or a gain from other items (for example, discontinued operations or other comprehensive income).

2.Exception to the requirement to recognize a deferred tax liability for equity method investments when a foreign subsidiary becomes an equity method investment.

3.Exception to the ability not to recognize a deferred tax liability for a foreign subsidiary when a foreign equity method investment becomes a subsidiary.

4.Exception to the general methodology for calculating income taxes in an interim period when a year-to-date loss exceeds the anticipated loss for the year.


The amendments in this Update also simplify the accounting for income taxes by doing the following:

1.Requiring that an entity recognize a franchise tax (or similar tax) that is partially based on income as an income-based tax and account for any incremental amount incurred as a non-income-based tax.

2.Requiring that an entity evaluate when a step up in the tax basis of goodwill should be considered part of the business combination in which the book goodwill was originally recognized and when it should be considered a separate transaction.

3.Specifying that an entity is not required to allocate the consolidated amount of current and deferred tax expense to a legal entity that is not subject to tax in its separate financial statements. However, an entity may elect to do so (on an entity-by-entity basis) for a legal entity that is both not subject to tax and disregarded by the taxing authority.

4.Requiring that an entity reflect the effect of an enacted change in tax laws or rates in the annual effective tax rate computation in the interim period that includes the enactment date.

5.Making minor Codification improvements for income taxes related to employee stock ownership plans and investments in qualified affordable housing projects accounted for using the equity method.

The Company has adopted the standard which does not have a significant impact to our consolidated financial statements.

In August 2020, the FASB issued ASU 2020-06, ASC Subtopic 470-20 “Debt—Debt with “Conversion and Other Options” and ASC subtopic 815-40 “Hedging—Contracts in Entity’s Own Equity”. The standard reduced the number of accounting models for convertible debt instruments and convertible preferred stock. Convertible instruments that continue to be subject to separation models are effective(1) those with embedded conversion features that are not clearly and closely related to the host contract, that meet the definition of a derivative, and that do not qualify for fiscal years,a scope exception from derivative accounting; and, interim periods within those fiscal years, beginning after December 15, 2020. For all other entities,(2) convertible debt instruments issued with substantial premiums for which the premiums are recorded as paid-in capital. The amendments in this update are effective for fiscal years beginning after December 15, 2021, andincluding interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2022.

Early adoption of the amendments is permitted,2020, including adoption in any interim period for (1) public business entities for periods for which financial statements have not yet been issued and (2) all other entities for periods for which financial statements have not yet been made available for issuance. An entity that elects to early adopt the amendments in an interim period should reflect any adjustments as of the beginning of the annual period that includes that interim period. Additionally, an entity that elects early adoption must adopt all the amendments in the same period.

within those fiscal years. The Company is assessinghas adopted the impact of the new guidance. The management anticipates that the adoption of the new guidance willstandard which does not have noa significant impact to our consolidated financial statements.

In October 2021, the FASB issued ASU 2021-08, ASC Subtopic 805 “Business Combinations”. The FASB is issuing this Update to improve the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice and inconsistency related to (1) Recognition of an acquired contract liability, (2) Payment terms and their effect on subsequent revenue recognized by the acquirer. The Company has adopted the standard which does not have a significant impact to our consolidated financial statements.

In March 2022, the FASB issued ASU 2022-02, ASC Subtopic 326 “Credit Losses”: Troubled Debt Restructurings and Vintage Disclosures. Since the issuance of Accounting Standards Update No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.

In June 2016,Instruments, the FASB issued newBoard has provided resources to monitor and assist stakeholders with the implementation of Topic 326. Post-Implementation Review (PIR) activities have included forming a Credit Losses Transition Resource Group, conducting outreach with stakeholders of all types, developing educational materials and staff question-and-answer guidance, onconducting educational workshops, and performing an archival review of financial reports. The Company has adopted the measurement of credit losses for financial assets measured at amortized cost,standard which includes accounts receivable, and available-for-sale debt securities. The new guidance replaces the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses. This update is effective for annual periods beginning after December 15, 2019, including interim periods within those annual periods. Early adoption is permitted for annual periods beginning after December 15, 2018, including interim periods within those annual periods. The pronouncement was adopted in the fiscal year ended February 29, 2020 with nodoes not have a significant impact to our consolidated financial statements.

 


Note 2 - Going Concern

 

As of February 28, 2021,2022, and February 29, 2020,2021, the Company had an accumulated deficit of $132,340,979$39.2 million and $115,852,897,$1.2 million, respectively. The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern.

 

We have very limited financial resources. We currentlyAs of February 28, 2022, we have aworking capital of $6.3 million. Our monthly cash requirement ofis approximately $600,000.$1.5 million.

 


We will need to raise substantial additional capital or borrow loans to support the on-going operation, and increasedincrease market penetration of our products, including the development of national advertising relationships and increases in operating costs resulting from additional staff and office space until such time as we generate revenues sufficient to support current operations. We believe that in the aggregate, we could require several millions of dollars to support and expand the marketing and development of our travel and technology driven products, repay debt obligations, provide capital expenditures for additional equipment and development costs, payment obligations, office space and systems for managing the business and coverincluding covering other operating costs until our planned revenue streams from travelall businesses and products are fully implemented and begin to offset our operating costs. We anticipate obtaining a portion of such funds from HotPlay (defined below), pursuant to the terms of HotPlay Exchange Agreement (defined below), and in the event the HotPlay Exchange Agreement closes. Our failure to close the HotPlay Share Exchange or obtain additional capital to finance our working capital needs on acceptable terms, or at all, willwould negatively impact our business, financial condition, and liquidity. As of February 28, 2021, we had approximately $6,835,072 of current liabilities. We currently do not have thelimited resources to satisfy these obligations, and our inability to do so could have a material adverse effect on our business and ability to continue as a going concern. As indicated by the increase of the Company’s deferred revenue balance as of February 28, 2022, $2.1 million, we expect to see an increase in revenue in the next year.

 

Our current plan is to close the transactions contemplated by the HotPlay Share Exchange. We currently operate in the travel and cryptocurrency industries. Upon the completion of the HotPlay Exchange Agreement, the Company plans to transition its operations to those of a travel, cryptocurrency, and an in-game advertising company. During the period until the Closing of the HotPlay Exchange Agreement, and in the event the HotPlay Exchange Agreement is not consummated, the Company intends to continue to actively operate in the travel and cryptocurrency industries.

Management’s plans with regard to this going concern are as follows: the Company plans to work towards closing the HotPlay share exchange, which is subject to certain closing conditions and other requirements, will continue to attempt to raise funds with third parties by way of public or private offerings (similar to the December 2020 underwritten offering and the May 2021 underwritten offering, discussed below under “Note 17 - Subsequent Events”). The Company is working aggressively to increase the viewership of its products by promoting it across other mediums which the Company hopes will result in higher revenues.

(i)the Company plans to continue to raise funds with third parties by way of public or private offerings,

(ii)the Company is working aggressively to increase the viewership of its Fintech and gaming products by promoting it across other mediums;

(iii)the Company expects growth in revenue from interest and non-interest income through organic growth and new business initiatives in the finance and technology division;

(iv)the Company plans to issue tokens under its Longroot entity during the year 2023, which is expected to result in generating revenues;

(v)

the Company is tightening its spending on expenses, which is expected to help in the cost reduction of the operations; and

(vi)In March 2022, the Company created an at-the-market equity program under which the Company may, from time to time, offer and sell shares of its common stock in an aggregate gross offering price of up to $20 million to or through the Agent (the “ATM offering”).

The ability of the Company to continue as a going concern is dependent on the Company’s ability to further implement its business plan and generate greater revenues. Management believes that the actions presently being taken to further implement its business plan and generate additional revenues provide the opportunity for the Company to continue as a going concern.

Although we currently cannot predict the full impact of the COVID-19 pandemic on our fiscal 2022 financial results relating to our operations, we anticipate an increase in year-over-year revenue as compared to fiscal year 2021 ended February 28, 2021. However, the ultimate extent of the COVID-19 pandemic and its impact on global travel and overall economic activity is constantly changing and impossible to predict currently.

Separately, our capital requirements may increase in the near term and long-term due to the impact of the COVID-19 pandemic, the resulting reduced demand for travel services, the increases in cancellations and re-bookings, and the extent to which such pandemic may further impact the ability of our customers to fulfill their payment obligations.


 


Note 3 – Notable Financial Information

 

Prepaid ExpensesShort term investment

As of February 28, 2022 and Other Current Assets2021, NextBank had short-term deposits of $0.3 million with an original maturity in November 2022, interest rate at 0.05% per annum and $0, respectively.

Accounts Receivable, Net

As of February 28, 20212022 and February 29, 2020,2021, the Company had prepaidaccounts receivable of $0.8 million and $0, respectively. As of February 28, 2022 and 2021, the allowance for expected credit loss was $0 and $0, respectively.

Loans Receivable

Loans receivable related to the provision of traditional banking services in niche-focused businesses, including commercial and residential real estate and the origination and sale of loans and receivables financing, among other current assetstypes of $1,864,279 as compared to $334,995lending services of NextBank. As of February 28, 2022 and 2021, the Company had loans receivable of $17.4 million and $0, respectively, and the allowance for loan losses of $0.1 million and $0, respectively. The increase of $1,529,284 is mainly driven by $532,950 of Board of Director compensation, $393,260 of annual and perpetual license fees, and $353,357 of business consulting service contracts.interest rate ranges from 5.5% to 17.9%.

Security Deposits

As of February 28, 20212022, all loans were performing, and February 29, 2020,a general allowance was established at appropriate rate on the Company had security depositsprincipal amount outstanding at year end. Due to limited outstanding loans, they are analyzed one by one to determine if the general reserve covers the related risk of $258,296 as compared to $53,279, respectively. The increase of $205,017 is primarily related to a $169,930 deposit for the new corporate office leased space and the $14,234 deposit for the previous Weston leased office.

Other Receivable – Related Parties

The Other Receivable, related parties balance of $216,647 as of February 28, 2021 is associated with the consolidation of Longroot, Inc. following the business acquisition. The balance is comprised mainly of a receivable from True Axion Interactive, Ltd of approximately $99,456 and with HotNow Company Limited of approximately $96,527.

Fixed Assets

such loans. As of February 28, 2021 and February 29, 2020,2022, the Company had net fixed assets of $101,573Company’s management deemed the reserve as sufficient when compared to $19,664, respectively. The increase of $81,909 is primarily related to additions of office equipment such as computers and monitors of $18,300 and associated programs of $63,550 necessary to support the increased headcount as well as the new leased office space.

Accounts Payable and Accrued Expenses

As of February 28, 2021 and February 29, 2020, the Company had accounts payable and accrued expenses $1,793,239 as compared to $833,679 respectively. The increase of $959,560 is primarily driven by the $450,000 liability to Jason Morton for the final payment of the Longroot acquisition, $400,000 of accrued expense related to William Kerby’s annual bonus, $123,000 of accrued legal expense, $113,438 of accrued stock compensation and $57,690 of accrued marketing and networking expenses.


Note 4 – Notes Receivable

Current

$230,000 Promissory Note from Bettwork Industries Inc.

On October 10, 2018, we entered into a Promissory Note with Bettwork Industries Inc. (“Bettwork”), a related party, in the amount of $200,000 which was amended and superseded by an Amended Promissory Note dated October 19, 2018, in the amount of $230,000 (the “Bettwork Note”). The Bettwork Note bears interest at 12% per year and matured on February 28, 2019. All interest and the principal balance are due and payable on the maturity date. The Bettwork Note includes a “Default Rate” of eighteen percent (18.0%) per annum and is secured by all of the outstanding preferred stock shares held by the Chairman of the Board of Directors of Bettwork (which provide for super-majority voting rights) and Bettwork is precluded from issuing additional shares of common stock or preferred stock without consent from Monaker. In November 2018, a payment of $40,000 was received and the outstanding principal balance of the Bettwork Note as of February 28, 2021 and February 29, 2020 is $190,000 and $190,000, respectively. An allowance for bad debt of $190,000 (i.e., 100%) was reserved against the Bettwork Note as of February 28, 2019.

$37,500 Promissory Note from Crystal Falls Investments LLC.

On January 13, 2020, we entered a Promissory Note with Crystal Falls Investments LLC. (“Crystal”), a related party, in the amount of $37,500. The Crystal Note bears interest at 12% per year and matured on April 14, 2020. On April 16, 2020 and effective April 14, 2020, a first amendment to the Crystal Note was entered into extend the maturity date to August 14, 2020. All interest and the principal under the Crystal Note are due and payable on the maturity date. The Crystal Note includes a “Default Rate” of eighteen percent (18.0%) per annum and is secured by 2,000,000 shares of Bettwork’s common stock currently held in escrow. The Company has the right to elect at maturity of the Crystal Note to either take payment of the amount due (i) in cash, or (ii) pledged shares, or any combination of cash and shares. The outstanding principal balance of the Crystal Note as of February 28, 2021 and February 29, 2020 is $37,500 and $37,500, respectively.

On September 15, 2020, and effective August 14, 2020, a second amendment to the Crystal Note was entered into between us and Crystal Falls, to extend the maturity date of the Crystal Note to February 14, 2021. An allowance for bad debt of $37,500 (i.e., 100%) was reserved against the Bettwork Note as of February 28, 2021.

Non-current

Conversion of $1,600,000 Promissory Note Into 2,133,333 Common Stock Shares of Bettwork Industries Inc

On November 21, 2017, we entered into a Purchase Agreement and an addendum thereto (the “Purchase Addendum”) with A-Tech LLC (“A-Tech”) on behalf of its wholly owned subsidiary Parula Village Ltd. (“Parula”) whereby we purchased from A-Tech, through Parula, ownership of 12 parcels of land on Long Caye, Lighthouse Reef, Belize (the “Property”) for 240,000 shares of restricted common stock valued at a total of $1,500,000. As part of the same consideration, A-Tech agreed to construct 12 vacation rental residences on the Property within 270 days of closing of the transaction (the “Construction Obligation”); and the agreement provided that if the vacation rental residences were not completed within the 270 days, Monaker would cancel 12,000 shares, valued at $75,000 (of the previously issued 240,000 shares of restricted common stock) for each residence not completed. Additionally, in the event the average closing price of Monaker’s common stock for the 10 trading days prior to the 90th day after the closing of the transaction was less than $6.25 per share, Monaker was required to issue additional shares of restricted common stock such that the value of the shares issued to A-Tech totaled $1.5 million. On February 20, 2018 (the first business day following the 90th day after the closing), Monaker issued an additional 66,632 shares of common stock valued at $4.80 per share, for a total of $319,834, to meet the 90-day look-back provision for a guaranteed purchase price of $1.5 million. Bettwork and A-Tech share a common principal.risk assessment.

 


On May 31, 2018, Monaker and Bettwork entered into an agreement whereby Bettwork acquired the ‘right to own’ the Property from the Company in consideration for a Secured Convertible Promissory Note in the amount of $1.6 million (the “Secured Note”). The amount owed under the Secured Note accrues interest at a fluctuating interest rate, based on the prime rate, and is due and payable on May 31, 2020. The repayment of the Secured Note is secured by first priority security interest in the ‘right to own’ and subsequent to the exercise thereof, the Property. Bettwork may prepay the Secured Note at any time, subject to its obligation to provide the Company 15 days prior written notice prior to any prepayment. The Secured Note was convertible into shares of Bettwork’s common stock, at our option, subject to a 9.99% beneficial ownership limitation. The conversion price of the Secured Note was $1.00 per share, unless, prior to the Secured Note being paid in full, Bettwork completed a capital raise or acquisition and issued common stock or common stock equivalents (including, but not limited to convertible securities) with a price per share (as determined in our reasonable discretion) less than the Conversion Price then in effect (each a “Transaction”), at which time the Conversion Price wasNo loans were required to be adjusted to match such lower pricing structure associated with the Transaction (provided such repricing shall continue to apply to subsequent Transactions which occur prior to the Secured Note being paid in full as well). On July 2, 2018, this promissory note was exchanged for 2,133,333 shares of Bettwork’s common stock at $0.75 per share. The outstanding principal balance of the Secured Note as of February 28, 2021 and February 29, 2020 is $0 and $0, respectively. A deferred gain liability of $1.6 million had been reserved against the Secured Note on May 31, 2018. Upon the exchange of the note for common stock shares of Bettwork, on July 2, 2018, the deferred gain liability reserve of $1.6 million was reversed and recognized in net income as other income, gain on sales of assets as of February 28, 2019. Bettwork’s common stock is quoted on the OTC Pink market under the symbol “BETW”.

Conversion of $2,900,000 Promissory Note Into 3,866,667 Common Stock Shares of Bettwork Industries Inc

Effective on August 31, 2017, we entered into a Purchase Agreement (the “Purchase Agreement”) with Bettwork. Pursuant to the Purchase Agreement, we sold Bettwork:

(a)Our 71.5% membership interest in Voyages North America, LLC, a Delaware limited liability company (“Voyages”), including the voyage.tv website and 16,000 hours of destination and promotional videos;

(b)Our 10% ownership in Launch360 Media, Inc., a Nevada corporation (“Launch360”);

(c)Rights to broadcast television commercials for 60 minutes every day on R&R TV network stations which rights remain in place until the earlier of (i) the date the shares of Launch360 are no longer held by Bettwork; and (ii) the date that Launch360 no longer has rights to broadcast television commercials on R&R TV network stations, for whatever reason; and

(d)Our Technology Platform for Home & Away Club and supporting I.C.E. partnership (collectively (a) through (d), the “Assets”).

Bettwork agreed to pay $2.9 million for the assets, payable in the form of a Secured Convertible Promissory Note (the “$2.9 Million Secured Note”). The amount owed under the $2.9 Million Secured Note accrues interest at the rate of (a) six percent per annum until the end of the last day of the month in which the sale occurred; and (b) the greater of (i) six percent per annum and (ii) the prime rate plus 3 3/4% per annum, thereafter through maturity, which maturity date is August 31, 2020, provided that the interest rate increases to twelve percent upon the occurrence of an event of default. As of February 28, 2021 and February 29, 2020, no interest income has been accrued.

Bettwork may prepay the $2.9 Million Secured Note at any time, subject to its obligation to provide us 15 days written notice prior to any prepayment. The $2.9 Million Secured Note is convertible into shares of Bettwork’s common stock, at our option, subject to a 4.99% beneficial ownership limitation (which may be waived by us with at least 61 days prior written notice). The conversion price of the $2.9 Million Secured Note is $1.00 per share (the “Conversion Price”), unless, prior to the $2.9 Million Secured Note being paid in full, Bettwork completes a capital raise or acquisition and issues common stock or common stock equivalents (including, but not limited to convertible securities) with a price per share (as determined in our reasonable discretion) less than the Conversion Price then in effect (each a “Transaction”), at which time the Conversion Price will be adjusted to match such lower pricing structure associated with the Transaction (provided such repricing shall continue to apply to subsequent Transactions which occur prior to the Secured Note being paid in full as well). On July 2, 2018, this promissory note was exchanged for 3,866,667 shares of Bettwork’s common stock at $0.75 per share. The outstanding principal balance of the $2.9 Million Secured Note as of February 28, 2021 and February 29, 2020 is $0 and $0, respectively, and, an allowance of $2,900,000 (i.e., 100%) had been reserved against the $2.9 Million Secured Note upon its inception on August 31, 2017. Upon the exchange of the note into common stock shares of Bettwork on July 2, 2018, the deferred gain liability reserve of $2.9 million was reversed and recognized in net income as other income, gain on sales of assetscharged off for the year ended February 28, 2019. Bettwork’s common stock is quoted on the OTC Pink market under the symbol “BETW”.


Note 5 – Investment in Unconsolidated Affiliates

We assess the potential impairment of our equity method investments when indicators such as a history of operating losses, negative earnings and cash flow outlook, and the financial condition and prospects for the investee’s business segment might indicate a loss in value.

Verus International, Inc and NestBuilder.com Corp (OTCMKTS: VRUS)

We have recognized an impairment loss on investment in unconsolidated affiliate.2022. As of February 28, 2022, there were loans placed on non-accrual loan of $0.04 million.

Unbilled Receivables

As of February 28, 2022 and 2021, the Company had unbilled receivables of $3.3 million and $0, respectively, relating to a software development project. As of February 29, 2020, Monaker owned 3,845,10128, 2022 and 61,247,139 shares2021, the allowance for expected credit loss was $0 and $0, respectively.

Prepaid Expenses and Other Current Assets

As of Verus International, Inc. (formerly knownFebruary 28, 2022 and 2021, the Company had prepaid expenses of $1.0 million and $0.01 million, respectively. As of February 28, 2022 and 2021, the Company had other current assets of $0.01 million and $0.2 million, respectively.

Convertible Notes Receivable, Related Party

As of February 28, 2022 and 2021, the Company had Convertible Notes Receivable, related party, net allowance for expected credit loss of $4.6 million and $3.0, respectively, relating to receivables from Axion. As of February 28, 2022 and 2021, the allowance for expected credit loss was $3.1 and $0, respectively.

Goodwill

As of February 28, 2022 and 2021, the Company had total goodwill of $38.9 million and $0, respectively. The year-over-year increase resulted from the following:

(i)the reverse acquisition of HotPlay of $34.8 million;
(ii)relating to the acquisition of Longroot of $3.0 million;
(iii)the acquisition of NextBank of $7.9 million;
(iv)

the acquisition of Reinhart of $3.0 million and

(v)the impairment of goodwill of $10.2 million.

During the year ended February 28, 2022, the Company performed the impairment assessment and recognized the impairment loss on goodwill from NextMedia and NextTrip unit totaling to $10.2 million, as RealBiz Media Group, Inc. (“Verus”)) Series A Preferred Stock, respectively. This interestreflected in the Consolidated Statements of Operations and Comprehensive Loss as we assessed that the fair value from expected recoverable selling price was written down to zero ($0)lower than its book value. Outstanding goodwill in each segment and impairment amount are as follows:

(i)NextFintech of $23.7 million;
(ii)NextMedia of $20.2 million with goodwill impairment of $5.0 million mainly due to a decrease in fair value as expected to recover from potential sale of certain businesses within the segment; and
(iii)NextTrip of $5.2 million with goodwill impairment of $5.2 million mainly due to a decrease in fair value as expected to recover from potential sale of certain businesses within the segment.


Computers, Furniture and Equipment

As of February 28, 2022 and 2021, the Company had net computers, furniture and equipment of $0.6 million and $0.03 million, of which $0.2 million and $0.001 million included depreciation expense, respectively for the year end period ended February 28, 2022 and 2021.

Operating Lease Right-to-Use asset and Operating Lease Liability

The following schedule represents outstanding balance of operating lease Right-to-Use asset and operating lease liability of the Company as of February 28, 2015.2022:

On December 22, 2017, we entered into a Settlement Agreement with Verus, NestBuilder.com Corp. (“Nestbuilder”) and American Stock Transfer & Trust Company, LLC (“AST”) relating to the dismissal with prejudice of certain pending lawsuits with Verus, including Case No.: 1:16-cv-24978- DLG in the United States District Court for the Southern District of Florida. As part of the Settlement Agreement, Monaker agreed to pay Nestbuilder $100,000 and to issue 20,000 shares of Monaker’s restricted common stock to person(s) to be designated by Nestbuilder; Verus reinstated to Monaker 44,470,101 shares of Verus Series A Convertible Preferred Stock and ratified all rights under the Certificate of Designation as reformed and amended (to provide for a conversion ratio of 1 share of Verus common stock for each 1 share of Verus Series A preferred stock converted) and remove any dividend obligations. The Verus designation was also amended to provide us with anti-dilution protection below $0.05 per share. Also, as part of the Settlement Agreement, Monaker received 49,411 shares of common stock of Nestbuilder. The agreement further provided for each party to dismiss the above referenced lawsuits with prejudice and for general releases from each party. As a result of the settlement, (i) the investment in equity securities, representing 44,470,101 shares of Verus Series A Preferred Stock, is recorded at $0 as of February 28, 2019 and, (ii) the investment in equity securities, representing 49,411 shares of Nestbuilder’s common stock, is recorded at $0 as of February 28, 2019.

On April 10, 2019 and effective on February 8, 2019, we entered into an Inducement Agreement with Verus. Pursuant to the Inducement Agreement, we agreed to amend the designation of the Series A Convertible Preferred Stock of Verus (the “Series A Preferred Stock”)(of which we held 44,470,101 shares of Series A Preferred Stock, which converts into common stock of Verus, and votes on all stockholder matters, on a one-for-one basis, subject to the Ownership Blocker (discussed below)), to remove certain anti-dilution rights described therein; and Verus agreed to issue us 152,029,899 shares of its common stock, following Verus’ planned increase in authorized shares of common stock, pursuant to the anti-dilution rights of that certain Settlement Agreement by and among the Company, Verus, American Stock Transfer & Trust Company, LLC and NestBuilder.com Corp. executed on or about December 22, 2017, as previously disclosed. The designation of the Series A Preferred Stock, as amended, includes a 9.99% beneficial ownership limitation, preventing the Company from converting such Series A Preferred Stock into common stock of Verus (and reducing the voting rights of such preferred stock proportionally), if upon such conversion, the Company, its affiliates and/or any group which it is a part of, would own greater than 9.99% of Verus’ common stock (the “Ownership Blocker”).


Operating lease Right-to-Use asset Office  Car  Totals 
Right-to-Use asset, costs $3,771,702  $735,479  $4,507,181 
Accumulated depreciation  352,590   191,994   544,584 
Net Carrying Value $3,419,112  $543,484  $3,962,596 

Operating lease liability Office  Car  Totals 
Current portion $460,815  $250,988  $711,803 
Noncurrent portion  2,833,726   284,221   3,117,947 
Totals $3,294,541  $535,209  $3,829,750 

On April 16, 2019, Verus filed a Certificate of Amendment (the “Amendment”) to its Amended and Restated Certificate of Incorporation, as amended, to increase its authorized common stock from 1,500,000,000 shares to 7,500,000,000 shares and to decrease the par value of its common stock and preferred stock from $0.001 per share to $0.000001 per share. On April 23, 2019, Verus issued us the 152,029,899 shares of common stock.

As of January 31, 2020, Verus has 2,320,876,565 shares of common stock outstanding, 41,444,601 shares of Series A preferred stock outstanding and 430,801 shares of Series C preferred stock outstanding.

On February 29, 2020, the Company owned 61,247,139 shares of Verus’s common stock at $0.016 per share valued at $979,954.

During March 2020 and April 2020, the Company sold 3,367,664 and 2,991,929 shares of Verus common stock in the open market for $53,883 and $35,903, respectively.

On January 12, 2021, the Company owned 54,887,546 shares of common stock of Verus when Verus affected a 500 to 1 reverse stock split. The Company held 109,775 shares of Verus common stock after the reverse split.

Between January 13 - 31, 2021, the Company sold in open market transactions 109,775 shares of Verus stock, divesting its holdings in Verus. The divestiture resulted in a decrease in the fair value of such shares of $649,020 for the twelve months ended February 28, 2021. The change in fair value of $649,020 is recognized in realized gain or (loss) in unconsolidated affiliates as other expense as of February 28, 2021.

6,142,856 shares of Bettwork Industries Inc. Common Stock (OTC Pink: BETW)

On July 2, 2018, three Secured Convertible Promissory Notes aggregating $5,250,000 (as described in “Note 4 – Notes Receivable”), evidencing amounts we were owed by Bettwork, were exchanged for 7,000,000 shares of Bettwork’s common stock at $0.75 per share, for a fair value of $5,250,000 as of July 2, 2018. Bettwork’s common stock has a readily determinable fair value as it is quoted on the OTC Pink market under the symbol “BETW”.

On February 29, 2020, the shares of Bettwork’s common stock held by the Company were trading at $0.25 per share which decreased the fair value of the 6,142,856 remaining shares of Bettwork common stock to $1,535,714 and caused an accumulated fair value loss of $6,081,427 to be realized. The change in fair value of $6,081,427 is recognized in net income (loss) as other income, valuation loss, net, as a valuation loss as of February 29, 2020.

As February 28, 2021, the 6,142,856 shares of Bettwork’s common stock held by the Company were trading at $0.09 per share valued at $55,286, which decreased the fair value by $1,480,428 for the fiscal year to date. The change in fair value of $1,480,428 is recognized in net loss as other expense, valuation loss, net for the twelve months ended February 28, 2021. 

Recruiter.com Group, Inc. formerly Truli Technologies Inc (OTCQB: RCRT).

On August 31, 2016, Monaker entered into a Marketing and Stock Exchange Agreement with Recruiter.com (“Recruiter”). The Agreement required Monaker to issue to Recruiter 75,000 shares of Monaker common stock in exchange for 2,200 shares of Recruiter common stock. Also, Monaker issued to Recruiter an additional 75,000 shares of Monaker common stock for marketing initiatives within the Recruiter platform. In essence, Monaker issued 75,000 shares of its common stock to purchase 2,200 shares of Recruiter and, Monaker issued an additional 75,000 shares of its common stock as a prepayment for marketing and advertising within the Recruiter platform. Recruiter was at that time a private company with a platform that companies and individuals use for employment placements.


On February 29, 2020, the Company owned 139,273 shares of Recruiter’s common stock compared to 78,137 shares of Recruiter’s common stock as of February 28, 2021. As of February 28, 2021, each share of Recruiter.com’s common stock was valued at $3.39 per share which increased the fair value of the 103,435 shares of Recruiter.com common stock to $350,645 and caused an accumulated fair value gain of $37,282 to be realized. The change in fair value of $37,282 is recognized in net income as other income, valuation loss, net, as a valuation loss as of February 28, 2021.

Acquisition of Axion Shares

The investment in affiliate of $4,856,825 as of February 28, 2021, represents the Company’s acquisition of Axion equity by the transactions contemplated with the Axion Share Exchange Agreement, described in greater detail in “Item 1. Business—Recent Material Events—HotPlay and Axion Share Exchanges”, on November 16, 2020. Pursuant to the Axion Exchange Agreement, which closed on November 16, 2020, the Axion Stockholders, exchanged ordinary shares of Axion equal to approximately 33.85% of the outstanding common shares of Axion, in consideration for 10,000,000 shares of newly designated shares of Series B Convertible Preferred Stock of the Company, which are automatically convertible into common shares of the Company upon the occurrence of certain events, including the closing of the HotPlay Share Exchange, into an aggregate of 7,417,700 shares of Monaker common stock. As of February 28, 2021, the value of this investment decreased by $4,415,296 from $9,272,121 to $4,856,825 due to the changeCompany had operating lease Right-to-Use asset and Operating lease liability $0 and $0, respectively. The incremental borrowing cost applied in the market price of Axion shares.lease calculation is 10%.

Accounts Payable and Accrued Expenses

Also pursuant to the Axion Share Exchange Agreement, which closed on November 16, 2020, the Axion Creditors exchanged debt of Axion in the aggregate amount of $7,657,024, for 3,828,500 shares of newly designated shares of Series C Convertible Preferred Stock of the Company, which are automatically convertible into common shares of the Company upon the occurrence of certain events, including the approval of such issuances by the stockholders of the Company, on a one-for-one basis.

As of February 28, 2022 and 2021, the values associated with the assumed debt has remained unchanged.

Also pursuant to the Axion Share Exchange Agreement, which closed on November 16, 2020, the Company granted a warrant to Cern One, to purchase 1,914,250 shareshad accounts payable of the Company’s common stock. The Creditor Warrants vest on the later of (a) the date the Series B Preferred Stock$4.5 million and Series C Preferred Stock convert into common stock and the earlier of (i) the date the Axion Debt is fully repaid by Axion or (ii) the date that the Company obtains 51% or more of the voting control of, and economic rights to, Axion, provided that such vesting date must occur before November 16, 2021, or the Creditor Warrants will terminate.$0.08 million, respectively. As of February 28, 2022 and 2021, there has been no activitythe Company had accrued expenses of $4.1 million and $0.3 million, respectively.

Deferred Revenue

As of February 28, 2022 and 2021, the Company had deferred revenue of $2.1 million and $0, respectively, relating to travel and digital media future sales.

Other Liabilities – Customer Demand Deposits Payable

As of February 28, 2022 and 2021, the Company had other current liabilities – customer demand deposits payable of $7.6 million and $0, respectively, relating to NextBank.

As of February 28, 2022, the Company had interest and non-interest- bearing deposits received from customers with interest rates ranging from 0% to 4% payable per annum.

Short Term Note Payable – Related Parties

As of February 28, 2022 and 2021, the Company had a short term note payable – related party of $0.8 million and $1.1 million, respectively, relating to Tree Roots Entertainment and MQDC. The note payables are unsecured, carrying the interest at 9.00% - 9.75% per annum (2021: 9.00% -9.75% per annum) and are due at call.

Long Term Note Payable – Related Parties

As of February 28, 2022 and 2021, the Company had a long term note payable – related party of $1.0 million and $0, respectively, mainly related to note payable of preferred dividends in arrears.

The note payable has interest rate of 12% per annum, compounded monthly at the warrant.end of calendar month, with such interest payable at maturity or upon conversion.

Revenue

Disaggregation of revenue information was as follows:

Type of goods and services 2022  2021 
NextMedia $   $  
- Sales of third-party software  1,992,495    
- Initial activation of license  184,013    
- Activation of license  1,303,601    
Software maintenance services  982,942    
Product development revenue  2,003,447    
   6,466,498    
NextFintech        
Interest income  738,134    
Financial services  843,287    
   1,581,421    
NextTrip        
Travel services  155,407    
Total revenue  8,203,326    


 

Note 6 4 – Acquisitions and Dispositions

 

Purchase of Longroot, Inc.Reinhart Interactive TV AG and Zappware N.V. Acquisition

 

On November 16, 2020,January 15, 2021, we entered into a Founding Investment and Subscription Agreement (the “Investment Agreement”) with Reinhart, and Jan C. Reinhart, the founder of Reinhart (“Founder”).

The Investment Agreement contemplated the Company acquired 100% of Longroot, which in turn owned 57% of Longroot Cayman. Longroot Cayman owns 49% of the outstanding ordinary shares (withacquiring 51% of the Preferred shares owned by two Thai citizen nominee shareholders)ownership of Longroot Holding (Thailand) Company Limited (“Longroot Thailand”), provided that Longroot Cayman controls 90% of Longroot Thailand’s voting shares and therefore effectively controls Longroot Thailand.


The acquisition was made pursuant to the November 2, 2020 SPA entered into with Dr. Jason Morton, and for certain limited purposes set forth therein, Longroot. Pursuant to the SPA, the Company purchased, 100% of Longroot,Reinhart, in consideration for (a) $1,650,000 in cash; and (b) 200,000 shares of restricted common stock at $2.14 per share for a total value of $428,000 as well as 150,000 shares of restricted common stock at $3.00 per share for a total value of $450,000.

Up to and included in the10,000,000 Swiss Francs (approximately $10.7 million US). The closing as part of the cash consideration paid,transactions contemplated by the Investment Agreement was to take place on April 1, 2021, or earlier if the conditions to closing were earlier satisfied. Conditions to closing included the Company paid $1,200,000 to Longroot which was used for workingpaying the required capital and other shareholder related acquisition purposes as well as $428,000 of Company stock to complete the purchase. The remaining $900,000 owed to Morton pursuant to the termscontribution, approval of the SPA was payable in three installmentstransaction by the board of $300,000 each, due on or prior to (i) December 16, 2020 (30 days after the closing), which amount has been paid in full; (ii) March 16, 2021 (120 days after the closing); and (iii) April 15, 2021 (150 days after the closing), of which $150,000 was paid at the same time the first payment was made in December 2020. Pursuant to the SPA in consideration for the $900,000 owed post-closing, Morton received cash payments of $450,000 and elected to receive the remaining $450,000 in shares of common stockdirectors of the Company and Reinhart, and certain requirements and confirmations required by Swiss law. The Investment Agreement included customary representations and warranties of which the Company issued 150,000 shares at stock priceparties. We also agreed to reimburse the Founder’s legal fees of $3.00 per share.

On January 5, 2021, the Company, through Longroot, subscribed to purchase an additional 100 shares of Longroot Cayman, in consideration for $1 million. The subscription was made pursuant to certain pre-emptive rights set forth in a shareholders’ agreement entered into between the shareholders of Longroot Cayman, and increased Longroot’s ownership of Longroot Cayman up to 75% (from 57%).

Pursuant to the SPA, Morton agreed not to compete for a period of two years following the closing date,30,000 Swiss Francs (approximately $33,670 US) in connection with the operationtransaction. Additionally, in the event we failed to close the transactions contemplated by the Investment Agreement by April 1, 2021, we agreed to pay the Founder 500,000 Swiss Francs (approximately $560,000 US), as a break-up fee.

We paid the founder $10.7 million in cash on March 31, 2021; however, the shares of an initial coin offering portal in Thailand, subjectReinhart were not transferred to customary exceptions. The SPA also contains an indemnification obligation whereby the Company agreed to indemnifyuntil June 23, 2021. As of June 23, 2021, all the closing conditions had been satisfied and hold Morton harmless against any claims made by Axion or any of its shareholders, directors, officers, agents or representatives against Morton in connection with the SPA or the Company’s purchase of Longroot.this transaction was completed.

 

The Company hopes that the access to Longroot Limited’s technology and digital asset capabilities will enable the Company to offer new financing mechanisms and participation options, including in wholesale travel, gaming, and digital advertising.

In accordance with ASC 805, as described in Note“Note 1 – Summary of Business Operations and Significant Accounting PoliciesPolicies”, the Company has accounted for this business combination utilizing the following values in connection with the purchasebusiness acquisition of Longroot, Inc.: total consideration to selling shareholderReinhart as of $2,528,000 (and $2,250,636, net of cash acquired) and the purchase price has been provisionally allocated as follows. The fair value of net assets acquired were $219,940 and an intangible asset (license) of $2,212,702 with the liabilities assumed of $142,983 and minority interest of $39,023. The intangible assets include a license granted by the Thai Securities and Exchange Commission which has an indefinite useful life and therefore is not amortized but will be tested for impairment annually in alignment with the Company’s other intangible asset impairment analysis.June 23, 2021. The business combination accounting is provisionally complete for all assets and liabilities acquired on the acquisition date and we will continue to evaluate the assetfair values within the 1-year timeframe as provided in the applicable guidance.

 

Acquisition of Reinhart TV AG/Zappware
 
Fair Value of assets acquired   
Cash $3,086,212 
Current assets $8,083,041 
Right-of-use assets $2,537,789 
Non-current assets $6,681,714 
Total assets acquired $20,388,756 
     
Fair Value of liabilities assumed    
Current liabilities $9,931,882 
Lease liabilities $2,537,789 
Non-current liabilities $302,815 
Total liabilities assumed $12,772,486 
Net assets acquired $7,616,270 
Purchase consideration    
Cash $10,707,760 
Fair value of total consideration transferred $10,707,760 
     
Purchase Price Allocation    
Fair value of net assets acquired as of 6/23/2021 $7,616,270 
Fair value of total consideration transferred $10,707,760 
Goodwill arisen from acquiring Reinhart TV AG/Zappware $3,091,490 

Note 7 – Website Development Costs

The Company is in process of assessing the fair value of the identifiable assets acquired and Intangible Assetsliabilities assumed at the acquisition date, mainly in relation to its identification and valuation of intangible assets and certain tangible assets, therefore the assets acquired, and liabilities assumed were provisionally recorded. The assessment is to be completed within a period of one year from the acquisition date, pursuant to the measurement period allowed under ASC 805. During the measurement period, the Company is to retrospectively adjust the provisional amounts recognized at the acquisition date, and recognize additional assets or liabilities, if it obtains new information about facts and circumstances that existed as of the acquisition date.

 

The following table sets forthReinhart is in the intangible assets, both acquiredbusiness of providing a software-based TV and developed, including accumulated amortizationvideo distribution platform to telecom companies and digital content owners, and providing services to telecom companies and digital content owners for user interaction design, as of February 28, 2021well as software development, deployment and February 29, 2020:support.

 

February 28, 2021

  Useful Life Cost Impairment Accumulated
Amortization
 Net Carrying
Value
  In-Service Date (Estimate)
Website platform 1.0 years $400,000      $400,000  $     
Contracts, domains, customer lists 2.0 years  1,199,446       1,199,446        
Website platform 3.0 years  635,756       635,756        
Website development costs 3.0 years  912,416       885,367   27,049    
Software development costs 3.0 years  1,431,321       100,492   1,330,829    
Trademark & License Indefinite  2,218,985       —     2,218,985    
CIP – IDS Project     3.0 years  5,196,543   2,070,000   —     3,126,543    09/01/2021
Website development costs (not in service) 3.0 years  1,378,312           1,378,312    04/01/2021
    $13,372,779   2,070,000  $3,221,061   8,081,718     

In connection with our entry into the Investment Agreement, we entered into a Founding Shareholders’ Agreement with the Founder (the “Shareholders’ Agreement”). The Shareholders’ Agreement set forth certain rules for the governance and control of Reinhart. The Shareholders’ Agreement provides: (i) that the board of directors of Reinhart will consist of five members, three of which will be appointed by the Founder and other shareholders of Reinhart, and two of which will be appointed by the Company, which include William Kerby, the Company’s Co-Chief Executive Officer, and Mark Vange, the Chief Technology Officer of HotPlay and current Chief Technology Officer of the Company; (ii) that any material shareholder matters are required to be approved by shareholders holding at least 66 2/3% of the total outstanding vote of Reinhart; (iii) that in the event Reinhart issues, within five years after the closing date, any equity or convertible equity, with a price less than the most recent valuation of Reinhart’s shares, the shares held by each director who is appointed by the Founder are subject to weighted average anti-dilution protection; and (iv) provides for various restrictions on transfers of shares of Reinhart, including right of first refusal rights, tag-along rights, and drag-along rights, as well as certain rights which would trigger the right of the other parties to the Shareholders’ Agreement to acquire the shares held by an applicable shareholder, for the higher of the fair market value and the nominal value of the shares (except in the case of (c) where the purchase price is the lower of such amounts), if such shareholder (a) commits a criminal act against the interests of another party, Reinhart or its affiliates; (b) breaches the Shareholders’ Agreement, and fails to cure such breach 20 days after notice thereof is provided; or (c) the employment of any employed shareholder is terminated for certain reasons.

 


Intangible assets with indefinite useful lives, referred

The Shareholders’ Agreement also provides a right for the Founders to insell their shares to the table above totaling $2,218,985, are not amortized but are tested for impairment annually in alignment withCompany, at which time the Company’s other intangible asset impairment analysis. Company will be required to purchase such shares (the “Founder’s Shares”), based on the following schedule:

 

Date right is triggeredPercent of
Founder’s
Shares
eligible
to be sold
Required Purchase Price
January 1, 202433%15 times EBITDA based on audited 2023 Reinhart financials
January 1, 202566%15 times EBITDA based on audited 2024 Reinhart financials
December 20, 2025, if the board of directors of Reinhart, together with a majority of the directors appointed by the Company, agree to sell Reinhart to a third party, but the Company and the Founder cannot agree on such sale, by such date100%Higher of (a) 15 times EBITDA based on audited 2025 Reinhart financials; and (b) the value of a fully-funded acquisition proposal based on audited 2025 Reinhart financials
January 1, 2026100%Lower of (a) 15 times EBITDA based on audited 2025 Reinhart financials; and (b) the value of a fully-funded acquisition proposal based on audited 2025 Reinhart financials

February 29, 2020

The Shareholders’ Agreement also allows the parties to file for an initial public offering on any internationally recognized exchange. The Shareholders’ Agreement has a term of 10 years, extendable thereafter for successive five-year periods, unless terminated by either party with 12 months prior written notice (provided that any such termination shall only be applicable to the terminating shareholder), subject to earlier termination in connection with certain initial public offerings.

 

  Useful Life Cost  Accumulated
Amortization
  Net Carrying
Value
 
Website platform 1.0 years $400,000  $400,000  $ 
Contracts, domains, customer lists 2.0 years  1,199,447   1,199,447    
Website platform 3.0 years  37,657   37,657    
Website development costs 3.0 years  883,776   801,126   82,650 
Website development costs (not placed in service) 3.0 years  1,559,262      1,559,262 
Web platform 4.0 years  598,099   598,099    
Trademark Indefinite  6,283      6,283 
Software Development Costs 3.0 years  48,759       48,759 
CIP – IDS Project    5,015,593      5,015,593 
    $9,748,876  $3,036,329  $6,712,547 

NextBank International (formerly IFEB) Acquisition

 

During the years ended February 29, 2020 and February 28,On April 1, 2021, we entered into a Bill of Sale for Common Stock, effective March 22, 2021 (the “Bill of Sale”), with certain third parties, pursuant to which the Company purchased agreed to purchase 2,191,489 shares (the “IFEB Shares”) of authorized and outstanding Class A Common Stock of International Financial Enterprise Bank, Inc.,
a total of $5,196,543Puerto Rico corporation licensed as an Act 273-2012 international financial entity headquartered in San Juan Puerto Rico (“IFEB”), which IFEB Shares totaled approximately 57.16% of the intellectual property including an e-commerce platform from IDS, Inc.outstanding Class A Common Stock of IFEB. The cost of purchases was recorded as Capital in Progress (CIP). In addition, The Company incurred $183 in fees to register its trademark and capitalized $48,759 of software development costs.

This capitalization of these costs fall within the scope of ASC 350-50-25-15 wherein costs of upgrades and enhancements should be capitalized as they will result in added functionality of the website.

Intangible assets are amortized on a straight-line basis over their expected useful lives which is estimated to be 3 years. Amortization expense related to website development costs and intangible assets was $210,507 and $293,804 for the years ended February 28, 2021 and February 29, 2020, respectively.

The Based on the carrying value of definite-lived intangible assets as of February 28, 2021, we estimate our amortization expense for the next five years will be as follows:

  Amortization
Year Ended February 28, Expense
2022 $1,423,605 
2023  1,970,932 
2024  1,857,553 
2025  610,643 
2026   
  $5,862,733 

According to the amendment of the Intellectual Property Purchase Agreement dated May 18, 2021, the Company and IDS, Inc agreed to amend the purchase price of the Intellectual propertyIFEB Shares was $6,400,000, which amount was paid to the sellers on April 1, 2021.

IFEB was incorporated in 2017 as a corporation under the laws of the Commonwealth of Puerto Rico and received its international financial entity license on June 18, 2017 from $4,920,000 to $2,850,000.the Office of the Commissioner of Financial Institutions of Puerto Rico, in Spanish, “Oficina del Comisionado de Instituciones Financieras” or “OCIF”, as license #51. As a result, the Company recorded an impairment of $2,070,000 on the Intangible assets related to the IDS Intellectual property, based on its current value in use as of February 28, 2021.

Note 8 – Line of Credit

The National Bank of Commerce (FKA: Republic Bank) Line of Credit

On May 7, 2020, the Company entered a new Promissory Note with National Bank (the “New Note”). The Note replaced a prior promissory note the Company had in place with National Bank and extended the due date of the prior note from June 30, 2020 to December 31, 2020. The New Note also amended the interest rate of the prior note to provide that amounts due under the New Note accrue interest at the rate of prime plus 3% (which rate was 6.25%)(the interest rate of the prior note was prime plus 1%), subject to a floor of 4.5%. The New Note may be prepaid at any time without penalty. The New Note contains standard and customary events of default. On December 1, 2020, the Company repaid the New Note in full according to its terms.

As of February 28, 2021, the principal balance of the note payable was $0.  Interest expense charged to operations relating to this line of credit was $3,313 and $74,858, respectively for the years ended February 28, 2021 and February 29, 2020. The Company has accrued interest as of February 28, 2021 and February 29, 2020 of $-0- and $-0-, respectively.IFEB is regulated by OCIF.

 


Note 9 – Notes Payable

Note Purchase Agreement: Streeterville Capital, LLC

On November 23, 2020,May 6, 2021, in anticipation of the acquisition of the IFEB Shares, and control of IFEB, the Company and IFEB entered into a Note PurchasePreferred Stock Exchange Agreement, (thewhich was amended by a First Amendment to Preferred Stock Exchange Agreement entered into May 10, 2021 and effective May 6, 2021 (as amended by the first amendment, theNote PurchaseOriginal Preferred Exchange Agreement”) with Streeterville Capital, LLC (“Streeterville”), pursuant to which the Company sold Streetervilleagreed to exchange 1,950,000 shares of the Company’s common stock for 5,850 shares of cumulative, non-compounding, non-voting, non-convertible, perpetual Series A Preferred shares of IFEB.

Notwithstanding the terms of the Bill of the Sale, and the payment by the Company of the aggregate purchase price pursuant thereto, the transfer of the Initial IFEB Shares to the Company and the Company’s acquisition of control of IFEB was subject to review of the Company’s financial viability, as well as other matters, by OCIF, which approval of OCIF was received in June 2021, but which acquisition did not close until July 21, 2021.

Separately, on July 21, 2021, the Company entered into, and closed the transactions contemplated by, a Secured Promissory NoteShare Exchange Agreement with various other holders of shares of Class A Common Stock of IFEB (the “Additional Sellers” and the “IFEB Exchange Agreement”). Pursuant to the IFEB Exchange Agreement, the Additional Sellers exchanged an aggregate of 1,648,614 of the outstanding Class A Common Stock of IFEB, representing 42.94% of such outstanding Class A Common Stock of IFEB, in consideration for an aggregate of 1,926,750 restricted shares of the Company’s common stock (the “IFEB Common Shares”), with each one share of Class A Common Stock of IFEB being exchanged for 1.168 restricted shares of common stock of the Company, based on an agreed upon value of $2.50 per share for each share of Company common stock and $2.92 per share for each share of Class A Common Stock of IFEB.

As a result of the closing of both transactions, we acquired control of 100% of IFEB as of July 21, 2021.


In accordance with ASC 805, as described in “Note 1 – Summary of Business Operations and Significant Accounting Policies”, the Company has accounted for this business combination utilizing the following values in connection with the business acquisition of NextBank as of July 21, 2021. The business combination accounting is provisionally complete for all assets and liabilities acquired on the acquisition date and we will continue to evaluate the fair values within the 1-year timeframe as provided in the original principal amountguidance.

Acquisition of NextBank International, Inc. (7/21/21)
 
Fair Value of assets acquired   
Cash $7,039,001 
Current assets $7,584,013 
Non-current assets $148,842 
Net assets acquired $14,771,856 
     
Fair Value of liabilities assumed    
Current liabilities $11,474,443 
Non-current liabilities $ 
Net liabilities assumed $11,474,443 
     
Net assets acquired $3,297,413 
Purchase consideration    
Cash $6,400,000(1)
Common stock (1,925,581 shares @ $2.50 per share) $4,813,953 
Fair value of total consideration transferred $11,213,953 
     
Purchase Price Allocation    
Fair value of net assets acquired as of 7/21/2021 $3,297,413 
     
Fair value of total consideration transferred $11,213,953 
Goodwill $7,916,540 

(1)The $6.4 million of cash was paid by NextPlay prior to the closing of the Reverse Acquisition and is not presented on the Company’s consolidated statement of cash flows.

The Company is in process of $5,520,000 (the “Streeterville Note”). Streeterville paid considerationassessing the fair value of an initial cash purchase pricethe identifiable assets acquired and liabilities assumed at the acquisition date, therefore the assets acquired, and liabilities assumed were provisionally recorded. The assessment is to be completed within a period of $3,500,000 forone year from the note and issuedacquisition date, pursuant to the measurement period allowed under ASC 805. During the measurement period, the Company is to retrospectively adjust the provisional amounts recognized at the acquisition date, and recognize additional assets or liabilities, if it obtains new information about facts and circumstances that existed as of the acquisition date.

The IFEB Exchange Agreement required that:

(a) three legacy board members of IFEB remain on the Board of Directors of IFEB for a promissory noteperiod of one year after the closing date of the IFEB Exchange Agreement, subject to rights of removal if such continued appointment/service as board members would violate the fiduciary duties of any other board members;

(b) certain outstanding loans held by one of the legacy board members be extended, and be subject to a further extension;

(c) that Ms. Nithinan Boonyawattanapisut, Mr. J. Todd Bonner, Mr. Donald P. Monaco and Mr. William Kerby (each a member of the Board of Directors of the Company) and Mr. Jan Reinhart, the founder of Reinhart, be appointed as members of the Board of Directors of IFEB;

(d) that Mr. Ronald Poe will be appointed as Vice President of Next Fintech Holdings Inc. (formerly Longroot, Inc.), the Company’s wholly-owned subsidiary, and be provided a salary of $120,000 per year, pursuant to an employment agreement; and

(e) that Mr. Robert Fiallo, will be hired by an affiliate of the Company pursuant to an employment agreement, and be paid a base salary of $300,000 per year, plus a bonus of 3% of the profits from projects he works with or assists in developing.

On September 28, 2021, the amount of $1,500,000Company entered into a Preferred Stock Exchange Agreement (the “Investor NotePreferred Exchange Agreement”) with NextBank, and the Company agreed to exchange 5,070,000 restricted shares of the Company’s common stock (the “Exchanged Common Shares”), for 10,140 shares of non-cumulative, non-compounding, non-voting, non-convertible, perpetual Series A preferred stock of NextBank (the “NextBank Preferred Shares”). The associated debt issuance costsNextBank Preferred Shares have an aggregate face value of $10,140,000. The NextBank Preferred Shares are non-redeemable; however, NextBank may, by the vote of the note were $370,000 for total amount due $3,870,000. In addition to the $370,000holders of debt issuance costs the Company paid $245,000 for advisory fees, giving net proceeds of $3,255,000.

The Streeterville Note bears interest at a rate of 10% per annum and matures 12 months after the date of the note (i.e., on November 23, 2021). From time to time, beginning six months after issuance, Streeterville may redeem a portion of the Streeterville Note, not to exceed $0.8 million if the Investor Note has not been funded and $1.25 million if the Investor Note has been funded. In the event we do not pay the amount of any requested redemption within three trading days, an amount equal to 25% of such redemption amount is added to the outstanding balance of the Streeterville Note. Under certain circumstances the Company may defer the redemption payments up to three times, for a duration of 30 days each, provided that upon each such deferral the outstanding balance of the Streeterville Note is increased by 2%. Subject to the terms and conditions set forth in the Streeterville Note, the Company may prepay all or any portion of the outstanding balance of the Streeterville Note at any time subject to a prepayment penalty equal to 10% of the amount of the outstanding balance to be prepaid. For so long as the Streeterville Note remains outstanding, the Company has agreed to pay to Streeterville 20% of the gross proceeds that the Company receives from the sale of anymajority of its common stock, or preferred stock, which payments will be applied towardscall and will reduceredeem the outstanding balanceNextBank Preferred Shares in exchange for the Exchanged Common Shares plus accrued interest at the time of any such redemption. Additionally, the NextBank Preferred Shares include a change of control provision, whereby upon a change of control (as defined in the Preferred Exchange Agreement), the Company may cause NextBank to repurchase the NextBank Preferred Shares in exchange for the Exchanged Common Shares, plus accrued interest.


The Preferred Exchange Agreement included customary representations, covenants and warranties of the Streeterville Note,parties, and closing conditions which percentage increases to 30% uponwould be customary for a transaction of this type. The transactions contemplated by the occurrence of,Preferred Exchange Agreement closed on October 1, 2021.

Longroot Purchase Price Allocation completion

The Company acquired Longroot on November 16, 2020 and continuance of, an event of default underprovisionally recognized the Streeterville Note (each an “Equity Payment”). Each time that we fail to pay an Equity Payment, the outstanding balancefair value of the Streeterville Note automatically increasesassets acquired and the liabilities assumed at the time of acquisition. During the year ended February 28, 2022 the Company finalized the Purchase Price Allocation (PPA) that was completed by 10%. Additionally,an independent appraiser and the Company recorded the fair value of assets and liabilities as of February 28, 2022, as a result, goodwill increased in the event we fail to timely pay any such Equity Payment, Streeterville may seek an injunction which would prevent us from issuing common or preferred stock until or unless we pay such Equity Payment.amount $3,437,521

 

Summary of changes in fair value allocation resulted below:

The November 2020 Streeterville

  Amount 
Goodwill increased $3,437,521 
     
Net other assets decreased  (188,479)
Intangible assets decreased  (1,748,702)
Non-controlling interest increased $(1,500,340)

Note provided that if any of the following events had not occurred on or before April 30, 2021, the then outstanding balance of the note (including accrued and unpaid interest) increases by an amount equal5 – Related Party Transactions

Parties are considered to 25% of the then-current outstanding balance thereof (the “April 2021 Note Increase”): (a) HotPlay Enterprise Limited (“HotPlay”) must have become a wholly-owned subsidiary of the Company; (b) during the period beginning on July 21, 2020, and ending on the date that certain Share Exchange Agreement entered into with HotPlay and the HotPlay stockholders dated July 23, 2020, as amended from timebe related to time (the “HotPlay Share Exchange Agreement” and the transactions contemplated therein, the “HotPlay Share Exchange”) is consummated, HotPlay must have raised at least $15,000,000 in cash through equity investments; (c) upon consummation of the HotPlay Share Exchange, all outstanding debt owed by the Company to HotPlay must have either been forgiven by HotPlay or converted into the Company’s common stock; (d) HotPlay must have become a co-borrower on the November 2020 Streeterville Note; and (e) the Company must have paid off all outstanding debt obligations to the Donald P. Monaco Insurance Trust and National Bank of Commerce, in full (collectively, the “November 2020 Note Transaction Conditions”). To date,if the Company has not yet completed the acquisition of HotPlay,ability, directly or indirectly, to control or joint control the party or exercise significant influence over the party in making financial and as such, the November 2020 Note Transaction Conditions have not been met.operating decisions, or vice versa.

 

Name of related partiesRelationship with the Company
Red Anchor Trading Corporation (“RATC”)A shareholder of the Company and controlled by a Co-CEO of the Company and a director of the Company
Tree Roots Entertainment Group Company Limited (“TREG”)A significant shareholder of the Company
Axion Ventures Inc. (“Axion”)An entity shareholding by a Co-CEO of the Company
Axion Interactive Inc. (“AI”)A subsidiary of Axion
HotNow (Thailand) Company Limited (“HotNow”)An entity controlled by a Co-CEO of the Company
True Axion Interactive Company Limited (“TAI”)An entity shareholding by a Co-CEO of the Company
Magnolia Quality Development Corporation Limited (“MQDC”)A significant shareholder of TREG, which is a significant shareholder of the Company
Nithinan BoonyawattanapisutCo-CEO of the Company, and a shareholder of the Company, RATC, HotNow, Axion and TAI
Immediate Family MemberImmediate family member with executive officer of the Company

Pursuant to the Streeterville Note, we provided Streeterville a right of first refusal to purchase any promissory note, debenture or other debt instrument which we propose to sell, other

Other than sales to officers or directors ofdisclosed elsewhere, the Company and/or sales tohad the government. Each time, if ever, that we provide Streeterville such right, and Streeterville does not exercise such right to provide such funding,following significant related party transactions for the outstanding balance of the Streeterville Note increases by 3%. Each time, if ever, that we fail to comply with the terms of the right of first refusal, the outstanding balance of the Streeterville Note increases by 10%. Additionally, upon each major default described in the Streeterville Note (i.e., the failure to pay amounts under the Streeterville Note when due or to observe any covenant under the Note Purchase Agreement (other than the requirement to make Equity Payments)) the outstanding balance of the Streeterville Note automatically increases by 15%, and for each other default, the outstanding balance of the Streeterville Note automatically increases by 5%, provided such increase can only occur three times each as to major defaults and minor defaults, and that such aggregate increase cannot exceed 30% of the balance of the Streeterville Note immediately prior to the first event of default.year ended February 28, 2022.

 

Payment of marketing expense:    
Immediate Family Member $234,200 
Payment of consulting expense:    
Immediate Family Member $110,000 
Payment of salary expense:    
Immediate Family Member $105,217 
Purchase of intangible asset:    
HotNow (Thailand) Company Limited $955,934 
Purchase of equipment:    
HotNow (Thailand) Company Limited $123,577 
True Axion Interactive Company Limited $14,714 
General and admin expense:    
HotNow (Thailand) Company Limited $23,540 
Operating expense:    
HotNow (Thailand) Company Limited $212,085 
Interest expense of loan from:    
Magnolia Quality Development Corporation Limited $41,622 
Tree Roots Entertainment Group Company Limited $65,717 
HotNow (Thailand) Company Limited  6,510 
Rental expense:    
Tree Roots Entertainment Group Company Limited $61,724 
HotNow (Thailand) Company Limited $12,625 
Payment of contract cost:    
HotNow (Thailand) Company Limited $743,889 
     

In connection with


The Company had the Note Purchase Agreement and the Streeterville Note, the Company has entered into a Security Agreement with Streeterville (the “Security Agreement”), pursuant to which the obligationsfollowing related party balances as of the Company are secured by substantially all the assets of the Company, subject to a priority lien and security interest in the collateral of the Company.February 28, 2022 as follows:

 

  Nature 

February 28,

2022

 
Amounts due from related parties:     
Hotnow (Thailand) Company Limited Other receivable $155,425 
Total   $155,425 
       
Amounts due to related parties:      
Magnolia Quality Development Corporation Limited Accrued interest expense $3,169 
Tree Roots Entertainment Group Accrued interest expense  32,700 
HotNow (Thailand) Company Limited Other liability  393 
Red Anchor Trading Corporation Account payable  395,782 
Total   $432,044 
Notes payable:      
Magnolia Quality Development Corporation Limited   $459,024 
Tree Roots Entertainment Group    306,016 
Immediate Family Member    966,314 
Total   $1,731,354 

The Investor Note, in the principal amount of $1,500,000, evidences the amount payable by Streeterville to the Company as partial considerationcomparative figure for the acquisitionyear ended February 28, 2021 represents significant related party transactions of Hotplay Enterprise Ltd. as follow:

Short-term Loan from:   
Magnolia Quality Development Corporation Limited $493,633 
Tree Roots Entertainment Group Co., Ltd $1,678,349 
Repayment of Short-term Loan:    
Tree Roots Entertainment Group Co., Ltd $1,118,900 
Interest expense of loan from:    
Magnolia Quality Development Corporation Limited $40,612 
Tree Roots Entertainment Group Company Limited $22,706 
Initial intangible assets for stock issuance:    
Red Anchor Trading Corporation $2,582,064 
T&B Media Global (Thailand) Company Limited $618,009 
Tree Roots Entertainment Group Co., Ltd $2,399,908 
Cash receipt from issuance of ordinary shares:    
Red Anchor Trading Corporation $3,000,000 
T&B Media Global (Thailand) Company Limited $500,000 
Tree Roots Entertainment Group Co., Ltd $1,900,000 
Dees Supreme Company Limited  600,000 
Cash receipt from issuance of ordinary shares – non controlling interest:    
T&B Media Global (Thailand) Company Limited $6,311 
Tree Roots Entertainment Group Co., Ltd $22,087 
Dees Supreme Company Limited  3,155 
Nithinan Boonyawattanapisut $631 
Rental expense:    
Tree Roots Entertainment Group Co., Ltd $18,365 
Payment of loan interest:    
Magnolia Quality Development Corporation Limited $37,287 
Tree Roots Entertainment Group Co., Ltd $14,888 
Payment of contract cost – Related party:    
Hotnow (Thailand) Company Limited $2,114,909 
True Axion Interactive Company Limited $535,920 
Payment of utilities expense:    
Hotnow (Thailand) Company Limited $6,342 


The Company had the Streeterville Note. The Investor Note accrues interest at the rate of 10% per annum, payable in full on November 23, 2021, subject to a 30-day extension exercisable at the option of Streeterville and may be prepaid at any time. Streeterville may, in its sole discretion, designate collateral as security for its obligations under the Investor Note, provided that currently there is no collateral evidencing the repayment of such note. In the event (i) of the occurrence of any event of default under the Streeterville Note, (ii) of a breach of any material term, condition, representation, warranty, covenant or obligation of the Company under any agreement entered into with Streeterville along with the Note Purchase Agreement, or (iii) if the Company sells, transfers, assigns, pledges or hypothecates the Investor Note, or attempts to do any of the foregoing, Streeterville is entitled to deduct and offset any amount owing by the Company under the Streeterville Note from any amount owed by Streeterville under the Investor Note (provided that such amount is automatically offset if Streeterville has not exercised its offset right within 30 days prior to the maturity date of the Investor Note). The Investor Note includes customary events of default, subject to cure rights where applicable. The amount of the Investor Note has been offset against the amount of the Streeterville Note in the balance sheetfollowing related party balances as of February 28, 2021 as both notes have substantially similar terms,follows:

  Nature 

February 28,

2021

 
Amounts due to related parties:     
Magnolia Quality Development Corporation Limited Accrued interest expense $3,408 
Tree Roots Entertainment Group Company Limited Other payable  4,523 
  Accrued interest expense  4,005 
  Accrued expense  18,824 
Monaker (prior to merging) Advance  7,500 
Total   $38,260 
Notes payable:      
Magnolia Quality Development Corporation Limited   $493,632 
Tree Roots Entertainment Group Company Limited    559,450 
Total   $1,053,082 

Significant agreements with related parties

On March 31, 2021, HotPlay Thailand entered into an asset purchase agreement with HotNow, a related party, which is also under the same common control of HotPlay Thailand, to purchase certain of the assets of HotNow, including all software used in the business and the Investor Note was provided in considerationincluding all rights under licenses and other agreements and employees, for the acquisitionaggregate price of a portion19.5 million Thai Baht (inclusive of 7% value added tax (VAT)) (approximately $624,000 US). On April 30, 2021, HotPlay Thailand made an advanced payment to HotNow in the amount of 5.0 million Thai Baht (approximately $149,533 US). On June 7, 2021, HotPlay Thailand paid the remaining cost of the Streeterville Note. The Investor Note was subsequently fundedasset purchase to HotNow in full in January 2021.


The Paycheck Protection Program (PPP) Loan

On May 8, 2020, the Company obtained a $176,534 loan (the “Loan”) from The Commercial Bank (the “Lender”),amount of 14.5 million Thai Baht (approximately $474,467 US) pursuant to the Paycheck Protection Program (the “PPP”) under the “CARES Act”. The Loan is evidenced by a promissory note (the “PPP Note”), dated effective May 8, 2020, issued by the Company to the Lender. The Note is unsecured with a 2-year term, matures on May 8, 2022, and bears interest at a rate of 1.00% per annum, payable monthly commencing on November 8, 2020, following an initial deferral period as specified under the PPP. The PPP Note may be prepaid at any time prior to maturity with no prepayment penalties. Proceeds from the Loan were available to the Company to fund designated expenses, including certain payroll costs, rent, utilities and other permitted expenses, in accordance with the PPP. Under the terms of the PPP, up to the entire amount of principal and accrued interest could be forgiven to the extent Loan proceeds were used for qualifying expenses as described in the CARES Act and applicable implementing guidance issued by the U.S. Small Business Administration under the PPP (including that at least 60% of such Loan funds are used for payroll).asset purchase agreement.

 

On August 14, 2020, the Company submitted the loan forgiveness application to Commercial Bank for the entire amount of $176,534. The accrued interest was $561 as of August 31, 2020.

On November 10, 2020, the Company received notification from The Commercial Bank that the entire loan balance was forgiven. The principal was recorded as other income and the accrued interest was reversed.

HotPlay Convertible Notes Dates - Current

On September 1, 2020, September 18, 2020, September 30, 2020, on or around November 2, 2020, and on NovemberMarch 24, 2020, and on around December 28, 2020 and on and around January 6, 2021, HotPlay advanced Monaker $300,000, $700,000, $1,000,000, $400,000, $100,000, $450,000, $50,000 respectively, under the termsThailand entered into a short-term loan with MQDC for $480,000 (15.0 million Thai Baht) with an interest rate of the HotPlay Exchange Agreement. The advances were evidenced by convertible promissory notes (“HotPlay Convertible Notes”) in the amount of each advance,9% per annum, which is payable on demand and an effective date as of the date of each advance. The HotPlay Convertible Notes totaled $3.0 millionunsecured. Accrued interest on this loan was $6,338 as of February 28, 2021.2022.

 

The advances,During June and July 2020, HotPlay Thailand entered into a short-term loan with TREG for the entry into the HotPlay Convertible Notes, were required conditions to the HotPlay Exchange Agreement, pursuant toaggregate principal amount of $543,000 (17.0 million Thai Baht) with an interest rate of 9.75% per annum, which HotPlayis payable on demand and unsecured. Accrued interest on this loan was required to loan us $1,000,000 on or before August 31, 2020 (provided that Monaker waived such delay in providing such initial $1,000,000$4,578 as of HotPlay advances) and was required to loan us an additional $1,000,000 (each a “Subsequent Loan”, and such loans, the “HotPlay Loans”), on September 30, 2020, and on the 15th day of each calendar month thereafter (each a “Required Lending Date”), through the date of closing of the HotPlay Exchange Agreement (provided that Monaker has waived any delay in timely providing such amounts to date).

The HotPlay Notes are automatically forgiven by HotPlay in the event the HotPlay Exchange Agreement is terminated (a) by written agreement of the parties thereto; (b) by HotPlay (and its stockholders) or the Company, if the closing has not occurred on or before the required date set forth in the HotPlay Exchange Agreement (currentlyFebruary 28, 2022. On May 31, 2021, providedHotPlay Thailand repaid 7.0 million Thai Baht (approximately $223,000 US) in connection with the short-term loan from TREG.

Next Bank International currently holds a $705,000 loan that was purchased in 2020 at a discounted purchase price of $647,776, when the parties are continuing to work together to close the HotPlay Exchange Agreement), unless the failureBank was not partially or wholly owned by NextPlay Technologies, Inc. The borrower is an entity affiliated with a current member of the closing to have occurred is attributable to a failure onBank’s Board of Directors. The Loan bears interest at an annual rate of 10%. As of February 28, 2022, the part of the terminating party; (c) by the Company, if there is a material adverse effect on HotPlay or any schedule delivered by HotPlay is found to be materially misleading or conflict with any prior written or oral statement delivered to the Company; or (d) by the Company, if any representations or warranties made by HotPlay or its stockholders in the HotPlay Exchange Agreement are found to be materially inaccurate or any covenants are breached.outstanding balance was $725,000.

 


Alternately, ifManagement compensation

On April 7, 2021, the HotPlay Exchange Agreement is terminated (a) by HotPlay or its principal stockholder (as applicable) because a governmental authorityboard of competent jurisdiction issues a final non-appealable order, or takes any other action having the effect of, permanently restraining, enjoining, or otherwise prohibiting the consummation of the transactions contemplated by the HotPlay Exchange Agreement (a “Government Action”); (b) by HotPlay if any event occurs that makes it impossible to satisfy a condition precedent to the HotPlay Exchange Agreement; (c) by HotPlay if there is a material adverse effect on the Company; or (d) by HotPlay if any representations or warranties made by the Company in the HotPlay Exchange Agreement are found to be materially inaccurate or any covenantdirectors of the Company is breached; or byratified the current compensation payable to members of the board of directors, which provides that each non-executive member of the Board be paid the following:

(a)compensation of 20,000 shares of Company common stock per year;

(b)compensation of 5,000 shares of Company common stock per year, if they are the chairperson of any committee of the board of directors; and

(c)compensation of 10,000 shares of Company common stock per year, to the Chairman of the Board (collectively, the “Board Compensation Terms”); provided that all shares due to the directors serving as of March 1, 2021, for the fiscal year ending February 28, 2022, were issued up front and were fully-vested/earned on the date of grant, instead of vesting over time, as previously awarded.


In total, an aggregate of 165,000 shares of common stock were issued to the non-executive directors on April 8, 2021, for fiscal 2022 compensation (such shares, the “Fiscal 2022 Board Compensation Shares”). The Fiscal 2022 Board Compensation Shares were issued under the Company’s Amended and Restated 2017 Equity Incentive Plan (the “Plan”).

On April 7, 2021, the Company entered into a Lock-Up Agreement with each of the non-executive members of the board of directors. Pursuant to the Lock-Up Agreements, each non-executive director agreed not to transfer, sell, pledge, or assign any of their applicable Fiscal 2022 Board Compensation Shares until March 1, 2022.

On April 7, 2021, the board of directors of the Company, consistent with the employment agreement of Mr. William Kerby, the Co-Chief Executive Officer of the Company, which provides for Mr. Kerby to receive a base salary of $400,000 per year, and an annual bonus, payable at the discretion of the board of directors, of up to 100% of his base salary (50% based on meeting short term goals and 50% based on meeting long-term goals), and other bonuses which may be granted from time to time in connectionthe discretion of the board of directors, agreed to award Mr. Kerby a discretionary bonus for fiscal 2021 of $400,000, which was payable in cash or shares of common stock, at Mr. Kerby’s option, under the Plan, with a Government Action or any event occurs that makes it impossible to satisfy a condition precedent toprice of $3.02 per share, the HotPlay Exchange Agreement (except as discussed above in connection with events which result in the automatic forgiveness of the HotPlay Notes), then the outstanding principal amount of the HotPlay Notes together with all accrued and unpaid interest thereon, automatically convert into fully paid and nonassessable sharesclosing sales price of the Company’s common stock at a conversion priceon the date the board of $2.00 per share.directors approved such bonus. On April 7, 2021, April 28, 2021, and May 16, 2021, Mr. Kerby elected to receive cash in connection with the bonus of $100,000, $150,000, and $150,000, respectively. 

 

In the event the transactions contemplated by the Share Exchange close, it is anticipated that the HotPlay Notes will be forgiven as intracompany loans.

IfOn April 7, 2021, the Company fails to deliver the shares due upon a conversion within five business days, or the Company enters into a voluntary or involuntary bankruptcy proceeding, then HotPlay can declare the entire amount of the notes due and payable (provided the notes are automatically due upon the occurrence of certain bankruptcy events), and such note will accrue interest at the rate of 18% per annum until paid in full.

Note 10 – Related Party Promissory Notes and Transactions

Related Party Transactions

Dividendsdeclared dividends in arrears of $1,102,068 on the previously outstanding Series A Preferred Stock, shares totaled $1,102,066 as of August 21, 2020, May 31, 2020, February 29, 2020 and February 28, 2019.that were converted into common stock with the Series A Preferred Stock being redeemed. These dividends were payable when and if declared by the board of directors. The dividends were owed to an entity controlled by Donald P. Monaco, our Chairman, andCo-Chairman at that time, William Kerby, our CEOCo- Chief Executive Officer and a director. director, and Warren Kettlewell, a former board member.

On April 8, 2021, the Company entered into an Exchange Agreement with William Kerby, its ChiefCo-Chief Executive Officer and director, and Monaco Investment Partners II, LP (“MI Partners”), of which Donald P. Monaco, is the managing general partner and the Chairmanthen Co-Chairman of the board of directors of the Company, is the managing general partner (the “Exchange Agreement”). Pursuant to the Exchange Agreement, the terms of which were approved by the board of directors of the Company, Mr. Kerby and MI Partners exchanged their right to an aggregate of $1,016,314 in accrued dividends (the “Accrued Dividends”), which had accrued on the Company’s outstanding Series A Preferred Stock, which had been held by Mr. Kerby and MI Partners prior to the conversion of such Series A Preferred Stock into common stock of the Company in August 2017, for Convertible Promissory Notes. Specifically, Mr. Kerby exchanged rights to $430,889 of accrued dividends on the Series A Preferred Stock for a Convertible Promissory Note with a principal balance of $430,889 and MI Partners exchanged rights to $585,425 of accrued dividends on the Series A Preferred Stock for a Convertible Promissory Note with a principal balance of $585,425 (the “Convertible Promissory Notes”).

 

The Convertible Promissory Notes accrue interest at the rate of 12% per annum, compounded monthly at the end of each calendar month, with such interest payable at maturity or upon conversion. The principal and accrued interest owed under the Convertible Promissory Notes is convertible, at the option of the holders thereof, into shares of the Company’s common stock, at any time beginning seven days after the Closing Date (defined below)closing date of the HotPlay Exchange Agreement (which closed on June 30, 2021) and prior to the payment in full of such Convertible Promissory Notes by the Company, at a conversion price equal to the greater of (i) the closing consolidated bid price of the Company’s common stock on April 8, 2021 (which was $3.02); and (ii) the five-day volume weighted average price of the Company’s common stock for the five trading days following the date that the HotPlay Exchange Agreement closes.closes (which was below the $3.02 per share minimum conversion price). The Convertible Promissory Notes are unsecured, have a maturity date of April 7, 2022, and include standard and customary events of default. On August 27, 2021, $50,000 cash was drawn by Mr. Kerby against his Convertible Promissory Note. As of February 28, 2022 the outstanding balance of the convertible promissory notes were in amount of $966,314 which was subsequently paid in March 2022.

 

On October 29, 2019,September 16, 2021, the Company entered into Promissory Notes with Robert “Jamie” Mendola, Jr. (a DirectorCompany’s board of directors approved an updated compensation plan setting forth compensation payable to the non-executive members of the Company) and Pasquale “Pat” LaVecchia (a Directorboard of the Company) in the amounts of $150,000 and $25,000, respectively (the “Director Notes”). The Director Notes have an interest rate of 12% per annum (18% upon the occurrence of an event of default) and were originally due and payable on February 1, 2020, but were subsequently extended as discussed below, provided that the notes may be prepaid at any time without penalty (provided that all interest that would have been due had the notes remained outstanding through maturity must be paid at the time of repayment). The Company paid a 2% original issue discount in connection with the notes. The Director Notes were repaid in full in April and May 2020.

On October 29, 2019, the Company entered into Stock Purchase Agreements with (a) Monaco Investment Partners, LP, of which Donald Monaco is the managing partner and a member of the Board of Directors of the Company; (b) Simon Orange, a member of the Board of Directors of the Company; and (c) William Kerby, the Chief Executive Officer and director of the Company.directors. Pursuant to the Stock Purchase Agreements, the Company sold the purchasers 25,562,500 shares (1,562,500 shares to Mr. Kerby and 12,500,000 shares toupdated compensation plan, each of Monaco Investment Partners, LP and Mr. Orange) of Series A Preferred Stock of Verus. The purchase price for the Verus shares was determined by the Board of Directors of the Company, based on among other things, the recent trading prices of Verus’ common stock on the OTCQB Market, as publicly reported. The Company received net proceeds of $425,000 from the Stock Purchase Agreements. The proceeds of $250,000 (which represent 15,625,000 shares sold to Simon Orange and William Kerby that were transferred to buyers) were recorded in realized gain/(loss) on the sale of unconsolidated affiliates within the fiscal year February 28, 2021.


On December 9, 2019, the Company entered into an Amended and Restated Promissory Note with the Monaco Trust, in the amount of up to $2,700,000 (the “Revolving Monaco Trust Note”). The Revolving Monaco Trust Note amended and restated a previous promissory Note entered into by the Company in favor of the Monaco Trust on February 4, 2019 (the 2019 Monaco Trust Note discussed above), in the amount of up to $700,000, which had a balance as of December 9, 2019 of $700,000. On the same date, the Company borrowed $200,000 from the Monaco Trust under the Revolving Monaco Trust Note. On December 27, 2019 and February 12, 2020, the Company borrowed an additional $300,000 and $200,000, respectively, from the Monaco Trust under the Revolving Monaco Trust Note, which had a balance of $1,200,000 as of February 29, 2020. On January 29, 2020, the Company entered into first amendments to the Director Notes and Revolving Monaco Trust Note with the directors and the Monaco Trust, respectively, to extend the maturity date of such notes from February 1, 2020 to April 1, 2020 (the “Note Amendments”). No other changes were made to such notes as a result of such amendments.

On January 22, 2020, the Company entered into Stock Purchase Agreements with William Kerby, the Chief Executive Officer and director of the Company (“Kerby”), (the “Purchaser” and the “Stock Purchase Agreement”). Pursuant to the Stock Purchase Agreement, the Company agreed to sell the Purchaser 1,562,500 shares of restricted Series A Convertible Preferred Stock of Verus International, Inc. (formerly known as RealBiz Media Group, Inc. (“Verus”), which the Company then held (out of the 31,970,101 shares of Series A Convertible Preferred Stock of Verus which the Company then held) for an aggregate of $25,000, or $0.016 per share. The purchase price for the Verus shares was determined by the Board of Directors of the Company, based on among other things, the recent trading prices of Verus’ common stock on the OTCQB Market, as publicly reported. The sale contemplated by the Stock Purchase Agreement closed on January 22, 2020.

On January 29, 2020, the Company entered into first amendments to the Director Notes and Revolving Monaco Trust Note with the directors and the Monaco Trust, respectively, to extend the maturity date of such notes from February 1, 2020 to April 1, 2020 (the “Note Amendments”). No other changes were made to such notes as a result of such amendments.

On March 13, 2020 and March 26, 2020, the Company borrowed an additional $100,000 and $75,000, respectively, from the Monaco Trust pursuant to the terms of the Revolving Monaco Trust Note.


On March 27, 2020, the Company entered into second amendments to the Director Notes to extend the maturity date of such Director Notes from April 1, 2020 to June 1, 2020, and entered into an amendment to extend the due date of the Revolving Monaco Trust Note from April 1, 2020 to December 1, 2020. All remaining terms of the promissory notes remained unchanged.

On April 17, 2020, the Company paid off the Promissory Note with Pasquale “Pat” LaVecchia, anon-executive member of the board of directors in the amount of $26,225 (the principal of $25,000 and the interest of $1,225).will receive:

 

(a)compensation of $60,000 per year;
(b)additional compensation of $15,000 per year for chairpersons of each committee of the board of directors; and
(c)additional consideration of $30,000 per year to each co-chairman of the board of directors.

On April 27, 2020, the Company filed

The compensation is earned and payable on a verified complaint for injunctive relief against IDS (a greater than 5% stockholderpro-rata, quarterly basis, with a total of 70% of the Company) and certain other defendants affiliated with IDScompensation payable in the Circuit Court of the Seventeenth Judicial Circuit in and for Broward County, Florida. Pursuant to the complaint, the Company alleges causes of action against the defendants, including IDS, based on among other things, fraud, conspiracy to commit fraud, aiding and abetting fraud, rescission, and breach of contract, and seeks a temporary and permanent injunction against the defendants, requiring such persons to return the 1,968,000 shares of Company common stock, disclosed above to the Company and preventing such persons from selling or transferring any shares, seeks damages from the defendants, rescission of the IP Purchase Agreement pursuant to which the shares were issued, attorneys fees and other amounts. The complaint was filed as a result of IDS’s failure to deliver certain intellectual property assets which were acquired by the Company from IDS in August 2019, certain other actions of IDS and the other defendants which the Company alleges constitutes fraud and to seek to unwind the IP Purchase Agreement and provide damages to the Company due to IDS’s and the other defendants’ breaches thereunder.

On March 13, 2020 and March 26, 2020, the Company borrowed an additional $100,000 and $75,000, respectively, from the Monaco Trust pursuant to the terms of the Revolving Monaco Trust. On June 9, 2020 and June 10, 2020, the Company borrowed an additional $300,000 and $50,000, respectively, from the Monaco Trust. On July 7, 2020 and July 20, 2020, the Company borrowed an additional $250,000 and $50,000, respectively, from the Monaco Trust. On July 27, 2020, the Company paid principal of $50,000 and accrued interest of $49,784. On September 22, 2020, the Company made a payment of $200,000 under the Revolving Monaco Trust Note, including $142,408 of principal and $57,592 of interest owed thereunder.

On May 1, 2020, the Company paid off the Promissory Note with Robert “Jamie” Mendola, Jr., in the amount of $157,595 (the principal of $150,000 and the interest of $7,595).

On June 9, 2020, June 10, 2020, July 7, 2020, we borrowed an additional $300,000, $50,000 and $250,000 from the Monaco Trust under the Revolving Monaco Trust Note.

On September 1, 2020, the Company entered into a consulting agreement with Beachfront Travel Consulting LLC for their services and expertise in Call Center and Sales Operations. The consultant agreed to assist the Company in the development and design of a Call Center Operation to support the Company’s brand. The Company agreed to pay the consultant compensation of 1,500 restricted shares of common stock per month, with a price equal tobased on the closing price of the Company’s common stock on the last day of the montheach fiscal quarter during which consideration is earned, and the consultant agreed to advise30% accrued and paid in cash at such time as the Company on policies and procedures, performance metrics and reporting, operational standards and training of call center staff.has had at least two consecutive profitable quarters. The Company issuedcompensation is payable retroactive to July 1, 2020. Notwithstanding the consultant 1,500 shares of restricted common stock forabove, the month of December 2020. The agreement was terminated on December 7, 2020, and the parties entered into as a new consulting agreement, with an annual fee of $110,000 insteadcompensation payable to Mr. Donald P. Monaco, our previous Co-Chairman of the 1,500 per month stock compensation. A consultantboard of directors, is to Beachfront is Beth Sikora,be reduced by the wifeamount he has already been paid in fiscal 2022. Finally, in addition to the above, non-executive members of the COO of the Company, Tim Sikora. The agreement provides that Mrs. Sikora will manage the Consumer Programs and Call Center operations based on her experience and background.

On September 8, 2020, the Company issued Sirapop “Kent” Taepakdee, then Acting Chief Financial Officer and Vice President of Finance (Principal Financial and Accounting Officer) and Timothy Sikora, the Chief Operating Officer and Chief Information Officer of the Company, an aggregate of 17,500 and 15,000 shares of common stock of the Company, respectively,board are eligible for yearly bonuses as a bonus in consideration for services rendered. The issuances were authorizedapproved by the board of directorsdirectors. All shares issued pursuant to the above will be issued under the Plan and subject thereto.


Significant agreements with managements of the Company

a)On June 9, 2021, GLM Consulting Ltd (the “Consultant”), of which Andrew Greaves, the Company’s Chief Operating Officer, serves as the sole officer and director, entered into a Consulting Agreement with the Company to assist the Company in growing a connected subscriber base and ecosystem across all devices: Digital TV, Set Top Box, Streaming Devices, PC, Laptop, Tablet and Smartphones, by providing a range of operational expertise. The term of the agreement started on July 6, 2021 and is effective until June 30, 2022, provided that the agreement may be terminated at any time, by either party, with two weeks written prior notice. The Company agreed to pay the Consultant a daily consulting fee of $1,000, for each day of service up to a maximum amount of 20 days per month unless previously agreed in writing with the Company. Each day of service shall include a minimum of 8 hours. The Consulting Agreement included confidentiality obligations of the parties and customary work for hire language.

b)On July 15, 2021, the Company entered into an Employment Agreement with Mark Vange, its Chief Technology Officer, which agreement has an effective date of July 15, 2021. The Company agreed to pay Mark Vange an annual salary of $300,000 payable on a bi-weekly basis. The agreement remains in effect (renewing automatically on a month-to-month basis), until either party provides the other at least 30 days prior written notice of its intent to terminate the agreement, or until terminated as defined in the Events of Termination in the Agreement.

c)On September 16, 2021, the Company entered into an Employment Agreement with Nithinan “Jess” Boonyawattanapisut, its Co-Chief Executive Officer and member of its board of directors, which agreement has an effective date of October 1, 2021. The agreement remains in effect (renewing automatically on a month-to-month basis), until either party provides the other at least 30 days prior written notice of its intent to terminate the agreement, or until terminated as discussed below.

The agreement includes a non-compete provision, prohibiting Ms. Boonyawattanapisut from competing against the Company during the term of the agreement and for a period of 12 months after termination thereof (subject to certain exceptions described below), in any state or country in connection with (i) the commercial sale of products sold by the Company during the six (6) months preceding the termination date; and (ii) any services the Company commercially offered during the six (6) months prior to the termination date (collectively, the “Non-Compete”).

During the term of the agreement, Ms. Boonyawattanapisut is to receive (i) a base salary of $400,000 per year, which may be increased at any time at the discretion of the Compensation Committee of the board of directors of the Company without the need to amend the agreement; (ii) an annual bonus payable at the discretion of the Compensation Committee; (iii) other bonuses which may be granted/approved from time to time in the discretion of the Compensation Committee; (iv) $200,000 in cash and granted25,000 shares of common stock issued as a sign-on bonus under the Company’s 2017 Amendedterms of the Plan; (v) up to four weeks of annual paid time off, which can be rolled-over year to year, or which in the discretion of Ms. Boonyawattanapisut, can be required to be paid in cash at the end of any year or the termination of the agreement; and Restated Equity Incentive Plan. The shares vested immediately upon issuance.

(vi) a car allowance equal to an equivalent of $1,500 per month, during the term of the agreement.

 

The agreement provides Ms. Boonyawattanapisut with the option of receiving some or all of the base salary and/or any bonus in shares of the Company’s common stock, with the value of such shares being based on the higher of (i) the closing sales price per share on the trading day immediately preceding the determination by Ms. Boonyawattanapisut to accept shares in lieu of cash; and (ii) the lowest price at which such issuance will not require stockholder approval under the rules of the stock exchange where the Company’s common stock is then listed or Nasdaq ((i) or (ii) as applicable, the “Share Price” and the “Stock Option”), provided that Ms. Boonyawattanapisut is required to provide the Company at least five business days prior written notice if she desires to exercise the Stock Option as to any payment of compensation, unless such time period is waived by the Company.

The issuance of the shares described above is subject to the approval of the stock exchange where the Company’s common stock is then listed or Nasdaq, and where applicable, stockholder approval, and in the sole discretion of the board of directors, may be issued under, or outside of, a stockholder approved stock plan.

The agreement includes standard provisions relating to the reimbursement of business expenses, indemnification rights, rights to Company property and inventions (which are owned by the Company), dispute resolutions, tax savings, clawback rights and provisions entitling Ms. Boonyawattanapisut to receive any fringe benefits offered by the Company to other executives (subsidized in full by the Company) including, but not limited to, family coverage for health/medical/dental/vision, life and disability insurance.


The agreement terminates upon Ms. Boonyawattanapisut’s death and can be terminated by the Company upon her disability (as described in the agreement), by the Company for Cause (defined below) or by Ms. Boonyawattanapisut for Good Reason (defined below). For the purposes of the agreement, (i) “Cause” means (A) Ms. Boonyawattanapisut’s gross and willful misappropriation or theft of the Company’s or any of its subsidiary’s funds or property, or (B) Ms. Boonyawattanapisut’s conviction of, or plea of guilty or nolo contendere to, any felony or crime involving dishonesty or moral turpitude, or (C) Ms. Boonyawattanapisut materially breaches any obligation, duty, covenant or agreement under the agreement, which breach is not cured or corrected within thirty (30) days of written notice thereof from the Company (except for certain breaches which cannot be cured), or (D) Ms. Boonyawattanapisut commits any act of fraud; and (ii) “Good Reason” means (A) without the consent of Ms. Boonyawattanapisut, the Company materially reduces Ms. Boonyawattanapisut’s title, duties or responsibilities, without the same being corrected within ten (10) days after being given written notice thereof; (B) the Company fails to pay any regular installment of base salary to Ms. Boonyawattanapisut and such failure to pay continues for a period of more than thirty (30) days; or (C) a successor to the Company fails to assume the Company’s obligations under the agreement, without the same being corrected within thirty (30) days after being given written notice thereof.

In the event of termination of the agreement for death or disability by Ms. Boonyawattanapisut without Good Reason, or for Cause by the Company, Ms. Boonyawattanapisut is due all consideration due and payable to her through the date of termination. In the event of termination of the agreement by Ms. Boonyawattanapisut for Good Reason or the Company for any reason other than Cause (or if Ms. Boonyawattanapisut’s employment is terminated other than for Cause within 6 months before or 24 months following the occurrence of a Change of Control (defined in the agreement) of the Company), Ms. Boonyawattanapisut is due (i) all consideration due and payable through the date of termination; (ii) a lump sum payment equal to 12 months of base salary; (iii) continued participation in all benefit plans and programs of the Company for 12 months after termination (or at the option of the Company, reimbursement of COBRA insurance premiums for substantially similar coverage as the Company’s plans); and (iv) the Non-Compete will not apply to Ms. Boonyawattanapisut.

The terms of the agreement were approved by the Company’s Compensation Committee and Audit Committee, each consisting solely of ‘independent’ members of the Company’s board of directors.

c)On August 19, 2021, the Company entered into an Intellectual Property Purchase Agreements with Fighter Base Publishing Inc. (“Fighter Base”) and Inc. (“Token IQ”), and together with Fighter Base, the “IP Sellers”), dated as of the same date (each an “IPP Agreement”, and together the “IPP Agreements”). Pursuant to the IPP Agreements, the Company agreed to acquire certain intellectual property owned by Fighter Base (relating to the games industry) and by Token IQ (relating to the distributed ledger industry), both of which entities are owned and controlled by Mark Vange, the Chief Technology Officer of the Company.

Pursuant to the Fighter Base IPP Agreement, the intellectual property to be acquired thereunder has a mutually agreed upon value of $5 million, which will be paid by the Company by way of the issuance to Fighter Base of 1,666,667 restricted shares of Company common stock (valued at $3 per share of common stock).

Pursuant to the Token IQ IPP Agreement, the intellectual property to be acquired thereunder has a mutually agreed upon value of $5 million, which will be paid by the Company by way of the issuance to Fighter Base of 1,250,000 restricted shares of Company common stock (valued at $4 per share of common stock).

Pursuant to the IPP Agreements, in the event that the shares of Company common stock issued in connection with the foregoing transactions are still restricted after closing of such transactions, the Company shall file a registration statement with the SEC to register such shares for resale by their respective owners (Token IQ and Fighter Base, as applicable).

The Token IQ IPP Agreement includes the right for Token IQ to license the intellectual property purchased thereunder to third parties, with the approval of the Company, which shall not be unreasonable withheld, provided that any licenses are non-transferable, non-sublicensable and non-exclusive, and that the licenses will not compete with the Company. Any consideration received by Token IQ from such licenses will be split 50/50 between the Company and Token IQ.

The shareholders’ meeting approved these IPP Agreements on January 28, 2022, and the acquisitions both closed on May 2, 2022, and pursuant to the terms of the respective Intellectual Property Purchase Agreements with FBP and TIQ, the Company issued FBP and TIQ 1,666,667 and 1,250,000 shares of Company common stock, respectively.


Note 6 – Investments in Unconsolidated Affiliates

We assess the potential impairment of our equity method investments when indicators such as a history of operating losses, negative earnings and cash flow outlook, and the financial condition and prospects for the investee’s business segment might indicate a loss in value.

Note 6.1 – Advances for investments

Letter of Intent to Acquire Axion Shares

On November 6,October 28, 2020, the Company entered into a thirdnon-binding Letter of Intent (as amended by the first amendment thereto dated March 10, 2021, the “Letter of Intent”) with Radiant Ventures Limited, which manages Radiant VC1 Limited and Radiant PV 1 Limited, two stockholders of Axion Ventures, Inc. (“Axion”). As discussed below, the Company acquired approximately 33.85% of Axion (provided that such ownership of Axion has not been formally transferred to the Revolving TrustCompany to date) on November 16, 2020 pursuant to the Axion Exchange Agreement (as defined in Note 7, below).

Pursuant to the Letter of Intent, the Company agreed, subject to certain condition precedents, including regulatory approvals and the entry into material agreements with the Monaco Trust,sellers, to acquire approximately 12,000,000 shares of Axion, equal to 5.7% of Axion’s outstanding shares, from certain of its stockholders for approximately $2,000,000, payable in a combination of stock and cash. In connection with our entry into the Letter of Intent, we paid the sellers a $500,000 non-refundable deposit towards the cash purchase price of the shares in or around October 2020 (representing 25% of such purchase price). We also issued the sellers 235,000 shares of Company common stock in March 2021, representing an additional 25% of the purchase price. Both payments are non-refundable. A final payment of 50% of the purchase price is due 10 days after the British Columbia Securities Commission (“BCSC”) lifts a cease trade order on Axion’s shares and is payable at the option of the sellers in cash or shares of the Company’s common stock, based on a 20% discount to the Company’s stock price at the time the election to take such final payment in shares is made, provided that such stock price valuation will not be less than $2.00 per share and not more than $3.00 per share. The Letter of Intent was to be terminated if the final payment had not been made by the earlier of June 30, 2021 and 15 days after the BCSC lifts the Axion no trade order; however, the parties have verbally agreed to extend such date. The purchase is also contingent on the maturitysellers granting the Company a proxy to vote the shares of Axion to be purchased through closing. The purchase remains subject to the negotiation of, and entry into, a definitive purchase agreement with the sellers, as well as other closing conditions, which have not been entered into and/or which have not been completed, to date.

As of February 28, 2022, total payment of cash and shares already paid by the Company to the sellers was $937,117. The Company plans to make the final payment of 50% of the purchase price after the BCSC lifts a cease trade order on Axion’s shares, provided that the Company cannot estimate when, or if, such cease trade order will be lifted. There is no further update as of February 28, 2022 and the recoverable amount was $937,117.

Go Game Asset Purchase Agreement

On June 30, 2021, the Company entered into a Securities Purchase Agreement (the “Go Game SPA”) with David Ng, an individual (the “Seller”). Pursuant to the Go Game SPA, the Company agreed to acquire a 37% interest in the capital stock of Go Game Pte Ltd, a Singapore private limited company (“Go Game”), a mobile game publisher and technology company, representing an aggregate of 686,868 shares of Go Game’s Class B Preferred shares (the “Initial Go Game Shares”). The Go Game SPA also includes an option whereby the Company can acquire additional shares of Go Game, as described in greater detail below. Pursuant to the Go Game SPA, the aggregate consideration to be paid for the Initial Go Game Shares is: (i) 6,100,000 shares of Series D Preferred Stock (representing $6.1 million of value, based on an aggregate liquidation preference of $6.1 million), and (ii) $5 million in cash, with $1.25 million paid on June 30, 2021, $1.25 million payable on or before July 31, 2021, and $2.5 million payable on or before September 30, 2021.


Pursuant to the Go Game SPA, the Company was also granted an option (the “Go Game Option”), to purchase up to an additional 259,895 shares of Go Game’s Class B Preferred shares from the Seller (the “Option Shares”) (representing 14% of Go Game’s outstanding Class B Preferred shares, or 51% with the Initial Go Game Shares). The Go Game Option is subject to the Seller’s acquisition of the Option Shares subsequent to the date of the Go Game SPA. The Go Game Option is exercisable from time to time after the date that the shareholders of the Company have approved the issuance of shares of common stock upon conversion of the Series D Preferred Stock and in connection with the Go Game Option (the “Approval Date”), and prior to January 1, 2022. The per share consideration due in connection with an exercise of the Go Game Option is equal to $70 million, divided by the then number of outstanding shares of Go Game ($37.71 per share at the time the agreement was entered into) (the “Call Option Price”). The Call Option Price is to be satisfied by the issuance of shares of Company common stock valued based on the greater of (a) $2.35 per share and (b) 85% of the average of the closing prices of the Company’s common stock for the prior thirty days (the “30-Day Average”). The Seller agreed not to transfer the Option Shares from the date acquired through the exercise or expiration of the Go Game Option. Upon issuance of any shares of common stock upon exercise of the Go Game Option, the Seller agreed to enter into a lock-up agreement restricting any sales or transfers of any shares of common stock of the Company for a period of 18 months following the issuance date.

We agreed pursuant to the Go Game SPA, that upon our purchase of the Initial Go Game Shares, that we would appoint the Seller to the board of directors of the Company, and that we would continue to nominate the Seller as a board nominee for appointment on the board of directors at each subsequent shareholder meeting of the Company, subject to certain exceptions, until the earlier of (i) Seller’s death; (ii) Seller’s resignation from the board of directors; (iii) the date that Seller is no longer qualified to serve as a member of the board of directors; (iv) the date the board of directors, acting in good faith, determines that the continued appointment of Seller to the board of directors would violate the fiduciary duties of such Revolving Monaco Trust Note tomembers of the board of directors; (v) the third anniversary of the acquisition of the Initial Go Game Shares; and (vi) the date that the Seller holds less than 2 million shares of Company common stock (including shares of common stock issuable upon conversion shares of Series D Preferred Stock held by Seller). The consideration paid as of February 28, 2021. 2022 was in amount $1,250,000.

On March 30, 2022, the Company, Go Game and the Seller entered into an asset purchase agreement (the “Asset Purchase Agreement”) which amends and restates in its entirety the Go Game SPA disclosed previously whereby Go Game agreed to sell and assign to the Company, and the Company agreed to purchase and assume from Go Game substantially all the assets and certain liabilities related to the goPlay platform (the “Go Game Assets”), together with a perpetual license to the goPay payment gateway (the “goPay License”).

The consummation of the transactions contemplated by the Asset Purchase Agreement (the “Closing”) occurred on April 4, 2022, following the execution of the Asset Purchase Agreement on March 30, 2022.

As consideration for the Go Game Assets and the receipt of the goPay License, the Company agreed to pay $5,000,000 (the “Purchase Price”) as follows:

(i)A cash payment of $1,250,000 which was paid previously by the Company to Go Game/Seller following the execution of the Go Game SPA;

(ii)A cash payment of $1,500,000 at closing by wire transfer of immediately available funds; and

(iii)A cash payment of $2,250,000 which shall be payable monthly by the Company to Go Game with simple interest thereon at the rate of 12.0% per annum until March 31, 2023.


No stock consideration of Go Game or the Company is being exchanged as was previously contemplated under the Go Game SPA.

In the event the Company defaults on its monthly cash payment obligations under (iii) above, the Company agrees that the Seller shall be given the absolute right to demand for the return by way of assigning, transferring, and delivering to Seller all of Purchaser’s right, title, ownership and interest in certain games and source code for goPay (without taking away the perpetual licensing right).

For a period of six months following the closing, Go Game will provide transitional assistance to the Company to integrate the goPlay platform and associated game titles, together with the goPay payment gateway, at no additional charge.

The goPay License allows the Company to exploit the goPay payment gateway to enhance the products and service offerings of the Company. The goPay License does not allow the Company to exploit and sublicense the goPay technology as a stand-alone product.

Prior to the Closing, Go Game was engaged in discussions with potential customers of the goPlay platform. At the Closing, the Company and Go Game entered into a revenue share agreement (the “Revenue Share Agreement”) pursuant to which Go Game shall refer such potential customers and any other changes were madepotential customers to the Company, in exchange for a right to receive fifty percent (50%) of net revenues attributable to such notesales.

In addition, the Company and the Seller entered into a restrictive covenant agreement (the “Restrictive Covenant Agreement”) whereby Seller will agree to refrain from competing with the Company and soliciting the Company’s employees at the time of the closing and for a period of time thereafter in order to protect the Company’s legitimate business interests and goodwill in connection with the Asset Purchase Agreement.

Letter of Intent of Potential acquisition of 100% of a Bank Holding Company

On November 1, 2021, the Company signed a non-binding Letter of Intent to acquire 100% of the capital stock of a bank holding company which is the 100% owner of a community bank. In connection with the execution of the non-binding Letter of Intent, on November 10, 2021, the Company made a non-refundable deposit of $1,000,000 on behalf of itself and other parties to the acquisition (as discussed below), which shall be credited against the purchase price at closing, if completed. The acquisition, if completed, will be made with other parties, to be named subsequently, and it is expected that no individual party will acquire more than 24.9% of said bank holding company. There is no legal obligation between the parties with respect to the acquisition unless and until the parties enter into a definitive agreement with respect thereto. Closing of the transaction will be subject to regulatory approvals, amongst other things. The balance as of February 28, 2022 was in amount $1,000,000.

Note 6.2 – Investment in Unconsolidated Affiliates

Soma Innovation Lab Joint Venture

On March 8, 2021, the Company entered into a Joint Venture Agreement with Soma Innovation Lab (“Soma”). Pursuant to the agreement, the parties agreed to form a joint venture for designing hyper-personalized experiences for targeted gamers. The agreement requires the Company to provide Soma the use of the HotPlay technology, assuming the Company acquire ownership of such technology as a result of the closing of the Company’s pending Share Exchange (as defined below), with HotPlay (as defined below), which technology is owned by HotPlay, and that the Company would issue the principals of Soma 72,000 shares of restricted common stock (valued at $180,000), of which $45,000 was earned immediately and the remaining shares will be earned at the rate of 6,000 per month. Pursuant to the agreement, Soma agreed to provide the Company use of an email client list and other services. The joint venture is owned 50/50 between us and Soma, with net profits/revenues paid pursuant to the same 50/50 split. In the event the joint venture achieves revenue in excess of expenses and the Company recovers the $180,000 value of the shares, then the Company agreed to issue Soma a bonus of 50,000 shares of restricted common stock. The joint venture (and agreement) each have a term of two years. The Company also agreed to use Soma for certain work to be performed on its websites and travel magazine, and agreed to pay Soma $75,000 per month ($225,000 in aggregate) for such amendment.

work, payable by way of the issuance of 90,000 shares of restricted common stock. As of February 28, 2022, no development and activity has been started.

 


6,142,856 shares of Bettwork Industries Inc. Common Stock (OTC Pink: BETW)

On July 2, 2018, three Secured Convertible Promissory Notes aggregating $5,250,000, evidencing amounts we were owed by Bettwork Industries Inc. (“Bettwork”), were exchanged for 7,000,000 shares of Bettwork’s common stock at $0.75 per share, for a fair value of $5,250,000 as of July 2, 2018. Bettwork’s common stock had a readily determinable fair value in the market under the symbol “BETW.”

On February 28, 2022, the 6,142,856 shares of Bettwork’s common stock held by the Company were trading at $0.0003 per share, valued at an aggregate of $1,843. Any change in fair value is recognized in net loss as other income, valuation loss, net for the year ended February 28, 2022.

Recruiter.com Group, Inc. formerly Truli Technologies Inc (OTCQB: RCRT).

On August 31, 2016, the Company entered into a Marketing and Stock Exchange Agreement with Recruiter.com (“Recruiter”). The agreement required the Company to issue to Recruiter 75,000 shares of the Company’s common stock in exchange for 2,200 shares of Recruiter common stock. The Company issued to Recruiter an additional 75,000 shares of Company common stock for as a prepayment for marketing and advertising within the Recruiter platform. Recruiter was at that time a private company with a platform that companies and individuals use for employment placements.

On January 15, 2019, pursuant to an Agreement and Plan of Merger / Merger Consideration, Truli Technologies Inc., which subsequently changed its name to Recruiter.com Group, Inc. (OTCQB: RCRT) (“Recruiter.com”), acquired Recruiter and Monaker exchanged its 2,200 shares in Recruiter for 139,273 shares of Recruiter.com common stock.

During the year ended February 28, 2022, the Company sold in open market transactions 68,083 shares of Recruiter.com common stock. The sale of these shares resulted in a realized gain of $28,028 for the year ended February 28, 2022.

The Company owned 3,461 shares of Recruiter’s common stock as of February 28, 2022. As of February 28, 2022, each share of Recruiter’s common stock was valued at $2.52 per share, which changed the fair value of the 3,461 shares of Recruiter common stock to $8,722. The net change in the fair value is recognized in net income as other income as of February 28, 2022.

The Company owned 3,461 shares of Recruiter’s common stock as of February 28, 2022. As of February 28, 2022, each share of Recruiter’s common stock was valued at $2.52 per share, which changed the fair value of the 3,461 shares of Recruiter common stock to $8,722. The net change in the fair value is recognized in net income as other income as of February 28, 2022.

Acquisition of Axion Shares

The investment in affiliate of $4,856,825 as of February 28, 2021., represents the Company’s acquisition of approximately 33.85% of Axion on November 16, 2020. Pursuant to the Axion Exchange Agreement (as defined in Note 7, below), which closed on November 16, 2020, the Axion Stockholders, exchanged ordinary shares of Axion equal to approximately 33.85% of the outstanding common shares of Axion, in consideration for 10,000,000 shares of Series B Convertible Preferred Stock of the Company, which automatically converted into 7,417,700 common shares of the Company on June 30, 2021. During the year ended February 28, 2022, the Company recognized the loss on valuation of $2.4 million to Consolidated Statements of Operations and Comprehensive Loss due to the change in the market price of Axion shares, the outstanding amount of this investment as of February 28, 2022 was $4,415.

Also pursuant to the Axion Exchange Agreement, which closed on November 16, 2020, the Company entered intogranted a fourth amendmentwarrant to the Revolving Trust Note with the Monaco Trust, to increase the amount available under such Revolving Monaco Trust Note to $2,800,000. No other changes were made to such note as a result of such amendment.

On November 16, 2020, the Company acquired 100% of Longroot, which was in turn owned 57% of Longroot Cayman. Longroot Cayman owned 49%Cern One Limited (one of the outstanding ordinaryAxion Stockholders), to purchase 1,914,250 shares (with 51% of the Preferred shares owned by two Thai citizen nominee shareholders) of Longroot Thailand, provided that Longroot Cayman controls 90% of Longroot Thailand’s voting shares and therefore effectively controls Longroot Thailand.  Subsequent to this acquisition, the Company signed a service contract with Atato, an IT provider of cryptocurrency website maintenance.  As of November 30, 2020, Miss Worapin Tatun, wife of the CEO of Atato and Mr. Pongsabutra Viraseranee, an employee and developer employed by Atato, both are minority shareholders of Longroot Thailand with a 25.5% interest of preferred stock in Longroot Thailand each.

On December 1, 2020, the Company paid $800,000 of principal and interest due under the Revolving Trust Note. The Revolving Trust Note was subsequently repaid in full in December 2020, with funds raised through our December 2020 underwritten offering.


Dividends in arrears on the previously outstanding Series A Preferred Stock shares totaled $1,102,066 and $1,102,066 as of February 28, 2021 and February 29, 2020, respectively. These dividends will only be payable when and if declared by the Board. The dividends are owed to an entity controlled by Donald P. Monaco, our Chairman and William Kerby, our CEO. See also the information under “$230,000 Promissory Note from Bettwork Industries Inc.”, “Conversion of $1,600,000 Promissory Note Into 2,133,333 Common Stock Shares of Bettwork Industries Inc“ and “Conversion of $2,900,000 Promissory Note Into 3,866,667 Common Stock Shares of Bettwork Industries Inc” under “Note 4 – Notes Receivable”, above.

On December 4, 2020, the Company entered into a Consulting Agreement with Beachfront Travel Consulting, LLC, whose consultant is Beth Sikora, the wife of the COO of the Company, Tim Sikora. The agreement provides that Mrs. Sikora will manage the Consumer Programs and Call Center operations based on her experience and background.

In December 2020 and January 2021, Sabby Management, LLC, which previously filed a Schedule 13G with the SEC disclosing its ownership of over 5% of our outstanding shares of common stock, exercised warrants to purchase 125,000 shares of ourCompany’s common stock, with an exercise price of $2.00 per share, paidshare. The warrants vest on the earlier of (i) the date the Axion debt is fully repaid by Axion or (ii) the date that the Company obtains 51% or more of the voting control of, and economic rights to, Axion, provided that such vesting date must occur before November 16, 2021 or the warrants will terminate. Because the vesting conditions had not been satisfied as of November 16, 2021, the warrants terminated automatically on such date pursuant to their terms. Accordingly, as of February 28, 2022, these warrants are no longer outstanding.

See Note 7, below, for additional information regarding this transaction.


Note 7 – Notes Receivable

Non-Current

$7.7 million Convertible Notes - Axion Debt Share Exchanges

On July 23, 2020, the Company entered into a Share Exchange Agreement (as amended from time to time, the “HotPlay Exchange Agreement” and the transactions contemplated therein, the “HotPlay Share Exchange”) with HotPlay and the stockholders of HotPlay (the “HotPlay Stockholders”). The transactions contemplated by the HotPlay Exchange Agreement were subject to certain closing conditions, including, the approval of the listing of the combined company’s common stock on the Nasdaq Capital Market following the closing.

On November 12, 2020, the Company entered into an Amended and Restated Share Exchange Agreement (as amended by the first amendment thereto dated January 6, 2021, the “Axion Exchange Agreement”) with certain stockholders holding shares of Axion Ventures, Inc. (“Axion” and the “Axion Stockholders”) and certain debt holders holding debt of Axion (the “Axion Creditors”) (the “Axion Share Exchange,” and collectively with the HotPlay Exchange Agreement, the “Exchange Agreements” and the transactions contemplated therein, the “Share Exchanges”). The transactions contemplated by the Axion Exchange Agreement closed on November 16, 2020, by Monaker Group, Inc

Pursuant to the Axion Exchange Agreement, (a) the Axion Stockholders (including Cern One Limited (“Cern One”)), exchanged ordinary shares of Axion equal to approximately 33.85% of the then outstanding common shares of Axion, in consideration for 10,000,000 shares of Series B Convertible Preferred Stock of the Company (the “Series B Preferred Stock”); and (b) the Axion Creditors exchanged debt of Axion in the aggregate $250,000 exercise priceamount of $7.7 million (the “Axion Debt”), for such(i) 3,828,500 shares of Series C Convertible Preferred Stock of the Company (the “Series C Preferred Stock”); and was(ii) a warrant, granted to Cern One, to purchase 1,914,250 shares of the Company’s common stock (the “Creditor Warrants”), which is only exercisable upon the occurrence of certain events (described below). Although the Axion Share Exchange closed on November 16, 2020, the Company has yet to formally complete the transfer of the ownership of the Axion shares into its name, due to a Cease Trade Order issued 125,000by the BCSC, which impacts Axion.

The closing of the HotPlay Exchange Agreement on June 30, 2021 triggered the automatic conversion of the Company’s outstanding Series B Convertible Preferred Stock and Series C Convertible Preferred Stock into common stock of the Company. Specifically, effective June 30, 2021, the 10,000,000 shares of outstanding Series B Convertible Preferred Stock and 3,828,500 shares of outstanding Series C Convertible Preferred Stock automatically converted into 7,417,700 and 3,828,500 shares of common stock of the Company, respectively, in accordance with the terms of such preferred stock (the “Preferred Conversion”).

The Creditor Warrants had cashless exercise rights, an exercise price of $2.00 per share and, a term of two years, beginning on the Vesting Date (defined below). The Creditor Warrants were scheduled to vest on the earlier of:

(i)

The date the Axion Debt is fully repaid by Axion, and

(ii)the date that the Company obtains 51% or more of the voting control of, and economic rights to, Axion, provided that such vesting date must occur before November 16, 2021, or the Creditor Warrants will terminate (as applicable, the “Vesting Date”). All of the Creditor Warrants were granted to Cern One.

Because the vesting conditions had not been satisfied as of November 16, 2021, the warrants terminated automatically on such date pursuant to their terms. Accordingly, as of February 28, 2022, these warrants are no longer outstanding.

On August 20, 2021, our counsel sent a demand letter for payment to Axion Ventures Inc. As of November 30, 2021, there has been no response in related to the demand letter.

On September 1, 2021, the Company filed a claim in the Supreme Court of British Columbia demanding payment of $7.7 million.

In November 2021, the Company commenced a new claim for the debt claimed to reflect the difference between what was owed and what the Company is claiming to avoid double-claiming.

In February 2022, the court was receptive to loans related evidence (e.g. loan agreements, bank statements, board resolutions, etc.), and determined that it will be further resolved together with other Axion issues in the next trial. The summary trial judge has advised that he wishes to take case management over this and several related proceedings, he advised further that the initial four weeks of trial planned for June 2022 might be insufficient. While the June trial dates have not yet officially been adjourned, it anticipated that the trial of this action would be reset for 12 weeks sometime in 2023 or early 2024. Document and oral discovery are ongoing, which will be necessary for the parties to make full disclosure on all issues. During fiscal year 2022, the Company recorded an allowance for credit losses for the principal amounted to $3.1 million and for the accrued interest receivable amounted to $0.2 million.


Note 8 – Intangible Assets

The following table sets forth the intangible assets, both acquired and developed, including accumulated amortization as of February 28, 2022:

  Useful Life Cost  Impairment  Accumulated
Amortization
  Net Carrying
Value
 
Software development costs 3.0 - 5.0 years $10,828,889  $1,415,746  $2,764,643  $6,648,500 
Trademark & License 6.0 - 20.0 years  6,048,213      1,178,331   4,869,882 
Others 1.0 - 3.0 years  2,211,851      1,105,237   1,106,614 
CIP – Software development   5,036,680         5,036,680 
    $24,125,633  $1,415,746  $5,048,211  $17,661,676 

Intangible assets are amortized on a straight-line basis over their expected useful lives, which is estimated to be 1-20 years. The expected useful lives are determined as to reflect the expected pattern of consumption of the future economic benefits embedded in the assets.

During the year, the Company recognized the impairment loss for software development costs amounting to $1.4 million due to the decrease in recoverable amount from potential sale of certain assets.

Amortization expense related to website development costs and intangible assets, excluding amortization of debt issuance costs, was $3.9 million and $0.5 million for the year/period ended February 28, 2022 and 2021, respectively.

Based on the carrying value of definite-lived intangible assets as of February 28, 2022, we estimate our amortization expense for the next five years will be as follows:

As of February 28, 2022 Amortization Expense 
2022 $4,264,343 
2023  5,903,837 
2024  5,564,215 
2025  1,929,281 
2026   
  $17,661,676 

Note 9 – Notes Payable

Description As of February 28,
2022
  As of
February 28,
2021
 
Streeterville Capital, LLC $4,053,737  $ 
ING Belgium  2,475,779    
Business Brokers, LLC  725,000    
Belfius bank  346,991    
Others  326,312    
Total  7,927,819    
Less: Debt issuance cost  (315,265)   
Line of Credit and Notes Payable, net  7,612,554    
Less: Current portion of Line of Credit and Notes Payable  (7,341,745)   
Line of Credit and Notes Payable Long Term, net $270,809  $ 


Note Purchase Agreements: Streeterville Capital, LLC

November 2020 Note Purchase Agreement

On November 23, 2020, the Company entered into a Note Purchase Agreement (the “November 2020 Note Purchase Agreement”) with Streeterville Capital, LLC (“Streeterville”), pursuant to which the Company sold Streeterville a Secured Promissory Note in the original principal amount of $5,520,000 (the “November 2020 Streeterville Note”). Streeterville paid consideration of an initial cash purchase price of $3,500,000 for the note and issued the Company a promissory note in the amount of $1,500,000 (the “November 2020 Investor Note”). The associated debt issuance costs of the note were covered under$370,000 for total amount due $3,870,000. In addition to the $370,000 of debt issuance costs, the Company paid $245,000 for advisory fees, resulting in net proceeds to the Company of $3,255,000.

The November 2020 Streeterville Note bore interest at a registration statement filedrate of 10% per annum and was scheduled to mature 12 months after the date of the note (i.e., on November 23, 2021). From time to time, beginning 6 months after issuance, Streeterville had the right to redeem a portion of the November 2020 Streeterville Note, not to exceed $0.8 million if the November 2020 Investor Note had not been funded and $1.25 million if the November 2020 Investor Note had been funded. In the event we did not pay the amount of any requested redemption within three trading days, an amount equal to 25% of such redemption amount was to be added to the outstanding balance of the November 2020 Streeterville Note. Under certain circumstances the Company could defer the redemption payments up to three times, for a duration of 30 days each, provided that upon each such deferral the outstanding balance of the November 2020 Streeterville Note would increase by 2%. Subject to the terms and conditions set forth in the November 2020 Streeterville Note, the Company had the right to prepay all or any portion of the outstanding balance of the November 2020 Streeterville Note at any time subject to a prepayment penalty equal to 10% of the amount of the outstanding balance to be prepaid. For so long as the November 2020 Streeterville Note remained outstanding, the Company agreed to pay to Streeterville 20% of the gross proceeds that the Company received from the sale of any of its common stock or preferred stock, which payments were to be applied towards, and would reduce, the outstanding balance of the November 2020 Streeterville Note, which percentage was to increases to 30% upon the occurrence of, and continuance of, an event of default under the Securities Act. Sabby is no longerNovember 2020 Streeterville Note (each an “Equity Payment”). Each time that we failed to pay an Equity Payment, the outstanding balance of the November 2020 Streeterville Note would automatically increase by 10%. Additionally, in the event we were to fail to timely pay any such Equity Payment, Streeterville had the right to seek an injunction which would prevent us from issuing common or preferred stock until or unless we paid such Equity Payment.

The November 2020 Streeterville Note provided that if any of the following events had not occurred on or before April 30, 2021, the then outstanding balance of the note (including accrued and unpaid interest) would increase by an amount equal to 25% of the then-current outstanding balance thereof (the “April 2021 Note Increase”):

(a)HotPlay must have become a wholly-owned subsidiary of the Company;

(b)during the period beginning on July 21, 2020, and ending on the date that the HotPlay Share Exchange is consummated, HotPlay must have raised at least $15,000,000 in cash through equity investments;

(c)upon consummation of the HotPlay Share Exchange, all outstanding debt owed by the Company to HotPlay must have either been forgiven by HotPlay or converted into the Company’s common stock;

(d)HotPlay must have become a co-borrower on the November 2020 Streeterville Note; and

(e)the Company must have paid off all outstanding debt obligations to the Donald P. Monaco Insurance Trust and National Bank of Commerce, in full (collectively, the “November 2020 Note Transaction Conditions”).

Pursuant to the November 2020 Streeterville Note, we provided Streeterville a greaterright of first refusal to purchase any promissory note, debenture or other debt instrument which we proposed to sell, other than sales to officers or directors of the Company and/or sales to the government. Each time, if ever, that we provided Streeterville such right, and Streeterville did not exercise such right to provide such funding, the outstanding balance of the November 2020 Streeterville Note would increase by 3%. Each time, if ever, that we failed to comply with the terms of the right of first refusal, the outstanding balance of the November 2020 Streeterville Note would increase by 10%. Additionally, upon each major default described in the November 2020 Streeterville Note (i.e., the failure to pay amounts under the November 2020 Streeterville Note when due or to observe any covenant under the November 2020 Note Purchase Agreement (other than the requirement to make Equity Payments)) the outstanding balance of the November 2020 Streeterville Note would automatically increase by 15%, and for each other default, the outstanding balance of the November 2020 Streeterville Note would automatically increase by 5% shareholder, provided such increase could only occur three times each as to major defaults and minor defaults, and that such aggregate increase could not exceed 30% of the balance of the Streeterville Note immediately prior to the first event of default.


In connection with the November 2020 Note Purchase Agreement and the November 2020 Streeterville Note, the Company entered into a Security Agreement with Streeterville (the “Security Agreement”), pursuant to which the obligations of the Company were secured by substantially all the assets of the Company, subject to a priority lien and security interest in the collateral of the Company.

 

On April 7, 2021, eachThe November 2020 Investor Note, in the principal amount of Mr. Pasquale “Pat” LaVecchia, Mr. Doug Checkeris, Mr. Rupert Duchesne, Mr. Robert “Jamie” Mendola, Jr. and Ms. Alexandra C. Zubko, each then members$1,500,000, evidenced the amount payable by Streeterville to the Company as partial consideration for the acquisition by the Company of the boardNovember 2020 Streeterville Note. The November 2020 Investor Note accrued interest at the rate of 10% per annum, payable in full on November 23, 2021, subject to a 30-day extension exercisable at the option of Streeterville and could be prepaid at any time. The amount of the Investor Note has been offset against the amount of the November 2020 Streeterville Note in the balance sheet as of February 28, 2021, as both notes have substantially similar terms, and the Investor Note was provided in consideration for the acquisition of a portion of the November 2020 Streeterville Note. The November 2020 Investor Note was subsequently funded in full in January 2021.

March 2021 Note Purchase Agreement

On March 22, 2021, we entered into a Note Purchase Agreement dated March 23, 2021 (the “March 2021 Note Purchase Agreement”) with Streeterville, pursuant to which the Company sold Streeterville a Secured Promissory Note in the original principal amount of $9,370,000 (the “March 2021 Streeterville Note”). Streeterville paid consideration of (a) $7,000,000 in cash; and (b) issued the Company a promissory note in the amount of $1,500,000 (the “March 2021 Investor Note”), in consideration for the March 2021 Streeterville Note, which included an original issue discount of $850,000 (the “OID”) and reimbursement of Streeterville’s transaction expenses of $20,000. A total of $700,000 of the OID was fully earned upon issuance and the remaining $150,000 was not fully earned until the March 2021 Investor Note was fully-funded by Streeterville, which occurred on May 26, 2021.

The March 2021 Streeterville Note bears interest at a rate of 10% per annum and matures 12 months after its issuance date (i.e., on March 23, 2022). From time to time, beginning six months after issuance, Streeterville may redeem a portion of the March 2021 Streeterville Note, not to exceed $2.125 million. In the event we do not pay the amount of any requested redemption within three trading days, an amount equal to 25% of such redemption amount is added to the outstanding balance of the March 2021 Streeterville Note. Under certain circumstances, the Company may defer the redemption payments up to three times, for 30 days each, provided that upon each such deferral the outstanding balance of the March 2021 Streeterville Note is increased by 2%. Subject to the terms and conditions set forth in the March 2021 Streeterville Note, the Company may prepay all or any portion of the outstanding balance of the March 2021 Streeterville Note at any time subject to a prepayment penalty equal to 10% of the amount of the outstanding balance to be prepaid. For so long as the March 2021 Streeterville Note remains outstanding, the Company has agreed to pay to Streeterville 20% of the gross proceeds that the Company receives from the sale of any of its common stock or preferred stock, which payments will be applied towards and will reduce the outstanding balance of the March 2021 Streeterville Note, which percentage increases to 30% upon the occurrence of, and continuance of, an event of default under the March 2021 Streeterville Note (each an “Equity Payment”). Each time that we fail to pay an Equity Payment, the outstanding balance of the March 2021 Streeterville Note automatically increases by 10%. Additionally, in the event we fail to timely pay any such Equity Payment, Streeterville may seek an injunction which would prevent us from issuing common or preferred stock until or unless we pay such Equity Payment.

The March 2021 Streeterville Note provides that if any of the following events have not occurred on or before June 30, 2021, the then outstanding balance of the note (including accrued and unpaid interest) increases by an amount equal to 25% of the then-current outstanding balance thereof: (a) HotPlay must have become a wholly-owned subsidiary of the Company; (b) during the period beginning on July 21, 2020, and ending on the date that the HotPlay Share Exchange is consummated, HotPlay must have raised at least $15,000,000 in cash or debt through equity investments (which has been completed); (c) upon consummation of the HotPlay Share Exchange, all outstanding debt owed by the Company to HotPlay must have either been forgiven by HotPlay or converted into the Company’s common stock; and (d) HotPlay must have become a co-borrower on the March 2021 Streeterville Note (collectively, the “March 2021 Note Transaction Conditions”).


The March 2021 Note Purchase Agreement required that we complete the purchase of the Reinhart (the “Reinhart Interest”), within 10 days of the date of the sale of the March 2021 Streeterville Note, and that the Company pledge the Reinhart Interest to Streeterville pursuant to a pledge agreement thereafter, both of which were timely completed.  

Also on May 26, 2021, Streeterville funded the March 2021 Investor Note (in the amount of $1.5 million) in full.

We made a required equity payment of $1,857,250 to Streeterville under the March 2021 Streeterville Note on May 26, 2021, with funds raised through a May 2021 underwritten offering, which represented approximately 20% of the funds raised in such offering.

We failed to timely meet the November 2020 Note Transaction Conditions; however, on June 1, 2021, Streeterville agreed to defer 50% of the April 2021 Note Increase which was otherwise to occur due to the Company’s failure to timely meet all of the November 2020 Note Transaction Conditions. As such, a total of $506,085 was capitalized into the outstanding balance of the November 2020 Streeterville Note effective as of April 30, 2021, and the remaining $506,085 of the April 2021 Note Increase would only be added to the balance of the November 2020 Streeterville Note if the Company failed to meet the November 2020 Transaction Conditions by June 30, 2021. Separately, if the Company did not meet the March 2021 Note Transaction Conditions by June 30, 2021, the March 2021 Streeterville Note would be subject to the June 2021 Note Increase. The Company completed the acquisition of HotPlay effective as of June 30, 2021, and as such the November 2020 Transaction Conditions and the March 2021 Note Transaction Conditions were satisfied.

On June 22, 2021, the Company entered into an Exchange Agreement with Streeterville, pursuant to which Streeterville exchanged $600,000 of a June 2021 requested redemption of $1.25 million under the November 2020 Streeterville Note (which amount was partitioned into a separate promissory note) for 300,000 shares of the Company’s common stock.

As of June 30, 2021, the remaining principal balance of Streeterville Notes is $ 10,247,676, accrued interest of $417,012 and accumulated unamortized debt issuance cost of $1,554,924.

On July 21, 2021, the Company entered into an Exchange Agreement with Streeterville, whereby Streeterville exchanged $400,000 owed under a November 2020 promissory note (which amount was partitioned into a separate promissory note) for 200,000 shares of the Company’s common stock.

On September 1, 2021, the Company entered into an Exchange Agreement with Streeterville, whereby Streeterville exchanged $270,000 owed under a November 2020 promissory note (which amount was partitioned into a separate promissory note) for 135,000 shares of the Company’s common stock.

On October 22, 2021, the Company entered into the Note Purchase Agreement (the “October 2021 Note Purchase Agreement”) with Streeterville, pursuant to which the Company sold Streeterville a Secured Promissory Note in the original principal amount of $1,665,000 (the “October 2021 Streeterville Note”). Streeterville paid consideration of $1,500,000, which represents the original principal amount less a $150,000 original issue discount, which was fully earned upon issuance, and a total of $15,000 to cover Streeterville’s professional fees and transaction expenses.

The October 2021 Streeterville Note bears interest at a rate of 10% per annum and matures 12 months after its issuance date (i.e., on October 22, 2022). From time to time, beginning six months after issuance, Streeterville may redeem any portion of the October 2021 Streeterville Note, up to a maximum amount of $375,000 per month. In the event the Company fails to pay the amount of any requested redemption within three trading days, an amount equal to 25% of such redemption amount is added to the outstanding balance of the October 2021 Streeterville Note. Under certain circumstances, the Company may defer the redemption payments up to three times, for 30 days each, provided that upon each such deferral, the outstanding balance of the October 2021 Streeterville Note is increased by 2%. Subject to the terms and conditions set forth in the October 2021 Streeterville Note, the Company may prepay all or any portion of the outstanding balance of the October 2021 Streeterville Note at any time subject to a prepayment penalty equal to 10% of the amount of the outstanding balance to be prepaid. For so long as the October 2021 Streeterville Note remains outstanding, the Company has agreed to pay to Streeterville 20% of the gross proceeds that the Company receives from the sale of any of its common stock or preferred stock within ten days of receiving such amount, which payments will be applied towards and will reduce the outstanding balance of the October 2021 Streeterville Note, which percentage increases to 30% upon the occurrence of, and continuance of, an event of default under the October 2021 Streeterville Note (each an “Equity Payment”). Each time that the Company fails to pay an Equity Payment, the outstanding balance of the October 2021 Streeterville Note automatically increases by 10%. Additionally, in the event the Company fails to timely pay any such Equity Payment, Streeterville may seek an injunction which would prevent the Company from issuing common or preferred stock until or unless the Company paid all past-due Equity Payments.


The October 2021 Streeterville Note provides that by November 21, 2021 (the “Deadline”), HotPlay must become a co-borrower on (a) the October 2021 Streeterville Note, (b) the November 2020 Streeterville Note, and (c) and the March 2021 Streeterville Note (collectively, the “Streeterville Notes”). If HotPlay has not become a co-borrower on the Streeterville Notes by the Deadline, the outstanding balance on the October 2021 Streeterville Note automatically increases by an amount equal to 25% of the then-current outstanding balance, provided such failure is not deemed an event of default under the October 2021 Streeterville Note.

Pursuant to the October 2021 Streeterville Note, the Company provided Streeterville a right of first refusal to purchase any promissory note, debenture, or other debt instruments which the Company proposes to sell, other than sales to officers or directors of the Company and/or sales to the government. Each time, if ever, that the Company provides Streeterville such right, and Streeterville does not exercise such right to provide such funding, the outstanding balance of the October 2021 Streeterville Note increases by 3%, unless the proceeds from such sale(s) are used to repay the October 2021 Streeterville Note in full. Each time, if ever, that the Company fails to comply with the terms of the right of first refusal, the outstanding balance of the October 2021 Streeterville Note increases by 10%. Additionally, upon each major default described in the October 2021 Streeterville Note (i.e., the failure to pay amounts under the October 2021 Streeterville Note when due or to observe any covenant under the Note Purchase Agreement (other than the requirement to make Equity Payments)), the outstanding balance of the October 2021 Streeterville Note may be increased, at Streeterville’s option, by 15%, and for each other default, the outstanding balance of the October 2021 Streeterville Note may be increased, at Streeterville’s option, by 5%, provided letterssuch increase can only occur three times each as to major defaults and minor defaults, and that such aggregate increase cannot exceed 30% of resignationthe balance of the October 2021 Streeterville Note immediately prior to the first event of default.

The October 2021 Note Purchase Agreement and the October 2021 Streeterville Note contain customary events of default, including if the Company undertakes a fundamental transaction (including consolidations, mergers, and certain changes in control of the Company), without Streeterville’s prior written consent. As described in the October 2021 Streeterville Note, upon the occurrence of certain events of default (mainly our entry into bankruptcy), the outstanding balance of the October 2021 Streeterville Note will become automatically due and payable. Upon the occurrence of other events of default, Streeterville may declare the outstanding balance of the October 2021 Streeterville Note immediately due and payable at such time or at any time thereafter. After the occurrence of an event of default (and upon written notice from Streeterville), interest on the October 2021 Streeterville Note will accrue at a rate of 22% per annum, or if lesser, the maximum rate permitted under applicable law. The Note Purchase Agreement prohibits Streeterville from shorting our stock through the period that Streeterville holds the October 2021 Streeterville Note.

On November 3, 2021, the Company closed a registered direct offering of its securities, resulting in gross proceeds to the Company resigning as directors (andof approximately $30 million. This offering triggered the provisions of the Streeterville Notes requiring the Company to pay to Streeterville 20% of the gross proceeds that the Company receives from the sale of any other positions they holdof its common stock or preferred stock within 10 days of receiving such amount, which payments must be applied towards and reduce the outstanding balance of each of the outstanding Streeterville Notes, however, the condition to pay 20% of the gross proceeds from the sale of any stock were negotiated with the Company), with such resignationslender and waived in November 2021.

On November 4, 2021, the Company completely paid off the November 2020 Streeterville Note in the amount of $3,100,807 and paid down the outstanding balance of the March 2021 Streeterville Note in the amount of $6,000,000.

As of February 28, 2022, the remaining principal balance of Streeterville Notes is $4,053,737, accrued interest of $653,587 and accumulated unamortized debt issuance cost of $315,265.


HotPlay Convertible Notes

On September 1, 2020, September 18, 2020, September 30, 2020, on or around November 2, 2020, on November 24, 2020, on around December 28, 2020 and on and around January 6, 2021, HotPlay advanced NextPlay Technologies, Inc. $300,000, $700,000, $1,000,000, $400,000, $100,000, $450,000, and $50,000 respectively, under the terms of the HotPlay Exchange Agreement. The advances were evidenced by convertible promissory notes (“HotPlay Convertible Notes”) in the amount of each advance, and an effective automaticallydate as of the date of each advance. The HotPlay Convertible Notes totaled $3.0 million as of February 28, 2021.

On January 8, 2021, HotPlay obtained the loan of $12 million from Tree Roots Entertainment Group Co., Ltd. (“Tree Roots Notes") The loan was solely for the purpose of funding obligation to the Company pursuant to the HotPlay Exchange Agreement. The loan carried interest at 5% per annum. The interest shall accrue until closing date. The principal and interest shall be converted to shares upon closing date. The interest before HotPlay’s approving date of the reverse acquisition is payable at call.

Subsequently, on March 16, 2021, March 19, 2021, and April 15, 2021, HotPlay loaned the Company $9 million, $1 million and $2 million, respectively. The loans were made pursuant to the terms of the HotPlay Exchange Agreement and were evidenced by Convertible Promissory Notes dated effective March 16, 2021, March 19, 2021, and April 15, 2021, in the amount of $9,000,000, $1,000,000, and $2,000,000, respectively. With the April 15, 2021 loan, HotPlay had loaned the Company all $15 million of the funds required to be funded pursuant to the terms of the HotPlay Exchange Agreement.

The advances, and the entry into the HotPlay Convertible Notes, were required conditions to the HotPlay Exchange Agreement.

The HotPlay Notes together with principal and interest after HotPlay’s approving date of the reverse acquisition under Tree Roots Notes were automatically forgiven as inter-company loans upon the closing of the HotPlay Exchange Agreement.Agreement which occurred on June 30, 2021.

 

Such resignations were solely in connection with the required terms and conditions of the HotPlay


Hudson Bay’s Warrant Exchange Agreement which requires that the board of directors of the Company at the closing thereof increase to nine members, with four appointed by HotPlay, two appointed by Monaker, and three appointed mutually by Monaker and HotPlay.

 

Also on April 7, 2021, the board of directors of the Company ratified the current compensation payable to members of the board of directors, which provides that each non-executive member of the Board be paid (a) compensation of 20,000 shares per year; (b) compensation of 5,000 shares per year, if they are the chairperson of any committee of the board of directors; and (c) compensation of 10,000 shares per year, to the Chairman of the Board (collectively, the “Board Compensation Terms”), except that all shares due to the Directors serving as of March 1, 2021, for the fiscal year ending February 28, 2022, were agreed to be issued up front and to be fully-vested/earned on the date of grant, instead of vesting over time, as previously awarded. In total, an aggregate of 165,000 shares of common stock were issued to the non-executive directors on April 8, 2021 for compensation for fiscal 2022 (such shares, the “Fiscal 2022 Board Compensation Shares”). The Fiscal 2022 Board Compensation Shares were issued under the Company’s Amended and Restated 2017 Equity Incentive Plan (the “Plan”).

On April 7,September 22, 2021, the Company entered into an Exchange Agreement (the “Hudson Exchange Agreement”) with Hudson Bay Master Fund Ltd. (the “Holder”), a Lock-Up Agreement with eachholder of the non-executive members of the board of directors. Pursuantwarrants to the Lock-Up Agreements, each non-executive director agreed not to transfer, sell, pledge or assign any of their applicable Fiscal 2022 Board Compensation Shares until March 1, 2022.

On April 7, 2021, the board of directors of the Company, consistent with the employment agreement of Mr. William Kerby, the Chief Executive Officer of the Company, which provides for Mr. Kerby to receive a base salary of $400,000 per year, and an annual bonus payable at the discretion of the board of directors, of up to 100% of his base salary (50% based on meeting short term goals and 50% based on meeting long-term goals), and other bonuses which may be granted from time to time in the discretion of the board of directors, agreed to award Mr. Kerby a discretionary bonus for fiscal 2021 of $400,000, which is payable in cash orpurchase 322,000 shares of common stock, at Mr. Kerby’s option, under the Plan, with a conversion price of $3.02 per share, the closing sales price of the Company’s common stock on the date the board of directors approved such bonus. If Mr. Kerby exercises his right to receive the entire bonus in shares of common stock he would be due 132,450 shares of common stock.

The Audit Committee of the board of directors ofwith an exercise price $2.00 per share (the “Warrants”) originally purchased from the Company is tasked with reviewing and approving any issues relatingon September 28, 2018. Pursuant to conflicts of interests and all related party transactions of the Company (“Related Party Transactions”). The Audit Committee, in undertaking such review and approval, will analyze the following factors, in addition to any other factors the Audit Committee deems appropriate, in determining whether to approve a Related Party Transaction: (1) the fairness of the terms for the Company (including fairness from a financial point of view); (2) the materiality of the transaction; (3) bids / terms for such transaction from unrelated parties; (4) the structure of the transaction; (5) the policies, rules and regulations of the U.S. federal and state securities laws; (6) the policies of the Committee; and (7) interests of each related party in the transaction.

The Audit Committee will only approve a Related Party Transaction if the Audit Committee determines that the terms of the Related Party Transaction are beneficial and fair (including fair fromWarrants, the Holder had the right, upon closing of our acquisition of HotPlay, effective on June 30, 2021, to elect to require the redemption of the Warrants for a financial pointcash payment of view)the Black Scholes Value of the Warrants (the “Black Scholes Value”), which election was subsequently made by the Holder. Pursuant to the Hudson Exchange Agreement, the Holder agreed to exchange the Warrant (and thereby release the Company from the obligation to pay the Black Scholes Value) for a promissory note in the principal amount of $900,000 (the “Hudson Note”). The Hudson Exchange Agreement included customary representations and are lawfulwarranties of the parties; a restriction prohibiting the Company from undertaking a variable rate transaction for so long as the Hudson Note remains outstanding; and a favored nations provision, relating to subsequent amendments, modifications, waivers or exchanges of any warrant to purchase common stock of the Company, which applies until the first anniversary of the repayment of the Hudson Note. The Company also agreed to pay $15,000 of the legal fees of the Holder pursuant to the Hudson Exchange Agreement.

The Hudson Note is payable by the Company, in four equal payments of $225,000 each, with payments due on October 22, 2021, November 22, 2021, December 22, 2021, and on maturity, January 22, 2022. We can prepay any amount due under the lawsHudson Note without penalties, provided we provide the Holder five days prior written notice. The amount due under the Hudson Note does not accrue interest, unless an event of default occurs thereunder, at which time the amount owed under the Hudson Note will accrue interest at 18% per annum, until paid in full. The Hudson Note contains customary restrictions (including future payments of indebtedness while the Hudson Note is outstanding and in default), covenants and events of default, including if a change of control of the United States. InCompany occurs, and upon the occurrence of an event multiple membersof default, the Holder can declare the entire balance of the Audit Committee are deemedHudson Note immediately due and payable, together with a related party,redemption premium of 25% (i.e., the Related Party Transaction will be considered byHolder can require the disinterested membersCompany to pay 125% of the boardamount due under the Hudson Note). The Hudson Note also includes certain rights which accrue to the Holder upon a fundamental transaction.

On October 22, 2021, the Company paid the first installment of directors in place$225,000. On November 4, 2021, the Company paid off the remaining balance of $675,000.

Loan agreement with ING

During the year 2015 and 2021, a subsidiary entered into loan agreements with ING Belgium to obtain the credit facilities. The loans carry interest at 1.8% per annum and EURIBOR plus 1.3% per annum. The terms of the Committee.loans were between 12 - 84 months for which final installments are in March 2023. As of February 28, 2022, the loans had outstanding balance of $2.5 million.

Loan agreement with Business Brokers, LLC

Effective November 1st of 2021, a subsidiary obtained a credit facility of $ 0.725 million from Business Brokers, LLC to which it engages regularly in the issuance of construction and commercial loans. The facility is guaranteed by notes receivable.  The facility carries a blended interest of 14.05% per annum and is repayable upon the collection of the notes that guarantees it, or the Company decision to repay it in full, whichever comes first, with interest only monthly payments requirement. As of February 28, 2022, the loans had outstanding balance of $0.725 million.

Loan agreement with Belfius bank

During the year 2017 and 2021, a subsidiary entered into loan agreements with Belfius Bank to obtain the credit facilities. The loans carry interest at 0.65% - 1.88% per annum. The terms of the loans are between 12 - 66 months for which final installments are due in 2022 and to be repay on a monthly basis. As of February 28, 2022, the loans had outstanding balance of $0.3 million and classified as current portion.

 


Note 11 10 – Stockholders’ Equity

 

Preferred stock

 

The aggregate number of shares of preferred stock that the Company is authorized to issue is up to One Hundred Million (100,000,000), with a par value of $0.00001 per share (the “Preferred Stock”), with the exception of Series A Preferred Stock shares having a $0.01 par value of $0.01 per share. The Preferred Stock may be divided into and issued in one or more series. The board of directors of the Company is authorized to divide the authorized shares of Preferred Stock into one or more series, each of which shall be so designated as to distinguish the shares thereof from the shares of all other series and classes. The board of directors of the Company is authorized, within any limitations prescribed by law and the articles of incorporation, to fix and determine the designations, rights, qualifications, preferences, limitations and terms of the shares of any series of Preferred Stock.

 


Series A Preferred Stock

 

The Company has authorized and designated 3,000,000 shares of Preferred Stock as Series A 10% Cumulative Convertible Preferred Stock, par value $0.01 per share (the “Series A Preferred Stock”). The holders of record of shares of Series A Preferred Stock shall be entitled to vote on all matters submitted to a vote of the shareholders of the Company and shall be entitled to one hundred (100) votes for each share of Series A Preferred Stock.

 

Dividends in arrears on the previously outstanding Series A Preferred Stock shares totaled $1,102,066$0 and $1,102,068 as of February 28, 20212022 and February 29, 2020,28, 2021, respectively. These dividends will only be payable when and if declared by the Board.Company’s board of directors. On April 7, 2021, the board approved the dividends to be paid.

 

The Company had 0 shares of Series A Preferred Stock issued and outstanding as of February 28, 20212022 and February 29, 2020.28, 2021.

 

Series B Preferred Stock

 

The Company has authorized and designated 10,000,000 shares of Preferred Stock as Series B Convertible Preferred Stock, which shares were issued to certain Axion stockholders in exchange for their ordinary shares of Axion equal to approximately 33.85% of the outstanding common shares of Axion pursuant to the Axion Exchange Agreement (see Note 2“Note 6Going ConcernInvestment in Unconsolidated Affiliates”). Each share of Series B Preferred Stock automatically, and without any required action by any holder, convertsconverted into 0.74177 shares of Company common stock upon the occurrence of certain events, including five business days after the closing of the HotPlay Share Exchange Agreement. Theon June 30, 2021.

As of February 28, 2022 and February 28, 2021, the Company had 10,000,000 shares0 and 010,000,000 shares of Series B Preferred Stock issued and outstanding, as of February 28, 2021 and February 29, 2020, respectively.

 

Series C Preferred Stock

 

The Company has authorized and designated 3,828,500 shares of Preferred Stock as Series C Convertible Preferred Stock. The Series C Preferred Stock was issued to certain debt holders of Axion who are party to the Axion Share Exchange Agreement and who agreed to exchange certain debt owed to such debt holders by Axion for shares of Series C Preferred Stock pursuant to the Share Exchange Agreement. Each share of Series C Preferred Stock is automatically, and without any required action by any Holder,holder, converted into one share of the Company’s common stock, on a one-for one basis, upon the occurrence of certain events, including five business days after the closing of the HotPlay Share Exchange Agreement. on June 30, 2021.

As of February 28, 2022 and February 28, 2021, the Company had 0 and 3,828,500 shares of Series C Preferred Stock issued and outstanding, respectively.


Series D Preferred Stock

On July 21, 2021, the Company designated Series D Convertible Preferred Stock (“Series D Preferred Stock”), by filing a Certificate of Designation of such Series D Preferred Stock with the Secretary of State of Nevada (the “Series D Designation”). The Series D Designation, which was approved by the board of directors of the Company on July 15, 2021, designated 6,100,000 shares of Series D Preferred Stock, $0.00001 par value per share. The Series D Designation provides that the Series D Preferred Stock has a liquidation preference which is (a) pari passu with respect to the Company’s common stock; and (b) junior to all current and future senior indebtedness and securities of the Company. If the Company determines to liquidate, dissolve or wind-up its business and affairs, the Company will prior to or concurrently with the closing, effectuation or occurrence of any such action, pay the holders of the Series D Preferred Stock, pari passu with the holders of the common stock, an amount equal to the Liquidation Preference per share of Series D Preferred Stock. The “Liquidation Preference” per share of the Series D Preferred Stock is equal to $1.00 per share, or $6,100,000 in aggregate. Each share of Series D Preferred Stock is automatically convertible on the fifth business day after the date that the shareholders of the Company, as required pursuant to applicable rules and regulations of NASDAQ, has approved the issuance of the shares of common stock upon conversion of the Series D Preferred Stock, and such other matters as may be required by NASDAQ or SEC rules and requirements to allow the conversion of the Series D Preferred Stock, into that number of shares of common stock as equal the Conversion Rate multiplied by the then outstanding shares of Series D Preferred Stock. For the purposes of the following sentence: “Conversion Rate” equals 0.44 shares of Company common stock for each share of Series D Preferred Stock converted, which equals (i) the Liquidation Preference ($1.00 per share of Series D Preferred Stock), divided by (ii) $2.28, the average of the closing sales prices for the Company’s common stock on the Nasdaq Capital Market for the 30 days prior to July 15, 2021, rounded to the nearest hundredths place, subject to equitable adjustment for stock splits and combinations.

The Company had 3,828,5000 shares and 0 sharesof Series D Preferred Stock outstanding as of February 28, 20212022 and February 29, 2020, respectively28, 2021.

 

Share Repurchase TransactionsCommon Stock

 

DuringThe Company issued the yearsinitial payment of $500,000 to IDS as per the settlement agreement during the year ended February 28, 2022 in consideration for the first transfer of 344,400 shares to be repurchased. As of the filing date, the transfer of shares has been completed.

On November 1, 2021, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain institutional investors (the “Purchasers”), pursuant to which the Company agreed to issue and February 29, 2020, there were no repurchasessell, in a registered direct offering (the “Offering”), an aggregate of 18,987,342 shares (the “Shares”) of the Company’s common stock, by Monaker.together with warrants to purchase an aggregate of 14,240,508 shares of Company common stock (the “Warrants”), at a combined price of $1.58 per Share and accompanying three quarters of a Warrant.

 

The Offering closed on November 3, 2021. The Shares, Warrants and shares of common stock issuable upon exercise of the Warrants were offered pursuant to a prospectus supplement, filed with the SEC on November 3, 2021, to the Company’s effective shelf registration statement on Form S-3 (File No. 333-257457) (the “Registration Statement”), which was initially filed with the Commission on June 25, 2021, was amended on September 24, 2021 and October 27, 2021, and was declared effective on October 29, 2021.

The Offering resulted in gross proceeds to the Company of approximately $30.0 million, before deducting the placement agent fees and related offering expenses, and excluding proceeds to the Company, if any, that may result from the future exercise of Warrants issued in the Offering. The net proceeds to the Company from the Offering, after deducting the placement agent’s fees and expenses and estimated offering expenses (excluding proceeds to the Company, if any, from the future exercise of the Warrants) were approximately $27.85 million.


During the year ended February 28, 2022, the following shares of common stock were issued:

-87,100,403 shares of common stock related to the reverse acquisition of HotPlay valued at $70,223,429.
-258,594 shares of common stock for compensation valued at $419,228.
-97,500 shares of common stock for consulting valued at $127,750.
-335,000 shares of common stock for related redemption on a loan valued at $670,000.
-1,925,581 shares of common stock pursuant to an Exchange agreement valued at $4,813,952.
-18,987,342 shares issued for public offering valued at $27,850,001.
During the year ended February 28, 2022, the Company repurchased 344,400 shares pursuant to an Amendment agreement to the Intellectual Property Purchase Agreement, which are classified as treasury stock valued at $771,456.

On May 2, 2022, and pursuant to the terms of the respective Intellectual Property Purchase Agreements with FBP and TIQ, the Company issued FBP and TIQ 1,666,667 and 1,250,000 shares of Company common stock, respectively.

The Company had 18,765,839500,000,000 shares of common stock, $0.00001 par value, authorized for issuance; and 13,069,339108,360,020 and 62,400,000 shares of common stock issued and outstanding as of February 28, 20212022 and February 29, 2020,2021, respectively.

Common Stock Warrantswarrant

 

The following table sets forth common stock purchase warrants outstanding as of February 28, 2021,2022 and February 29, 2020,2021, and changes in such warrants outstanding for the yearsyear ending February 28, 2022:

  Warrant  Weighted
Average
Exercise
 
Outstanding, February 28, 2021  3,045,921  $2.50 
Warrants granted  161,900  $4.59 
Warrants exercised/forfeited/expired  (225,400) $4.61 
Outstanding, June 30, 2021 – Reverse acquisition date  2,982,421  $2.45 
Warrants granted  14,402,408  $1.97 
Warrants exercised/forfeited/expired  (2,411,250) $2.06 
Outstanding, February 28, 2022  14,811,679  $2.05 
Common stock issuable upon exercise of warrants  14,811,679  $2.05 

Warrants outstanding at February 28, 2021 were of Monaker, however as HotPlay merged and became NextPlay, hence such warrants are presented in comparison as part of NextPlay.

On January 28, 2022, the Company held a Special Meeting of Stockholders (the “Special Meeting”) in a virtual format. Stockholders did not approve an amendment to the exercise price provisions of those warrants (the “Warrants”) issued in connection with a registered direct offering of the Company’s securities pursuant to that Stock Purchase Agreement entered into by and among the Company and certain investors on November 1, 2021, and February 29, 2020:specifically to remove the $1.97 floor price (the “Floor Price”) of the Warrants such that the exercise price of the Warrants may be reduced below the Floor Price in the event that the Company issues or enters into any agreement to issue securities for consideration less than the then current exercise price of the warrants (the “Warrant Amendment”).

 

  Warrant  Weighted
Average
Exercise
 
Outstanding, February 29, 2020  1,347,391  $3.90 
Warrants granted  1,923,850  $2.00 
Warrants exercised/forfeited/expired  (225,320) $(2.00)
Outstanding, February 28, 2021  3,045,921  $2.50 
Common stock issuable upon exercise of warrants  3,045,921  $2.50 


   Common Stock Issuable Upon Exercise of
Warrants Outstanding
  Common Stock Issuable Upon
Warrants Exercisable
 
Range of
Exercise
Prices
  Number
Outstanding at
February 29, 2021
  Weighted
Average
Remaining
Contractual
Life (Years)
  Weighted
Average
Exercise
Price
  Number
Exercisable at
February 28, 2021
  Weighted
Average
Exercise
Price
 
$2.00   2,436,250   2.30  $2.00   2,436,250  $2.00 
$2.85   175,000   0.82  $2.85   175,000  $2.85 
$5.00   2,000   0.09  $5.00   2,000  $5.00 
$5.13   411,671   1.42  $5.13   411,671  $5.13 
$5.63   21,000   1.28  $5.63   21,000  $5.63 
     3,045,921   1.18  $2.50   3,045,921  $2.50 

AtOn February 29, 2020,28, 2022, there were warrants outstanding to purchase 1,347,39114,811,679 shares of common stock with a weighted average exercise price of $3.32$2.05 and weighted average remaining life of 2.30 years.

At0.88 year. The warrants issued on November 1, 2021 of 14,402,408 warrants may be exercised commencing six months after the issuance date, therefore as of February 28, 2021, there2022, they were warrants outstanding to purchase 3,045,921 shares of common stock with a weighted average exercise price of $2.50 and weighted average remaining life of 1.18 years.not eligible for exercising.

 


During the year ended February 28, 2021,2022, the Company granted:

 

warrants to purchase 1,923,85014,402,408 shares of common stock in connection with subscriptions for shares of common stock.

 

As discussed above, on November 1, 2021, the Company issued Warrants to purchase an aggregate of 14,240,508 shares of Company common stock in connection with the Offering. Each whole Warrant sold in the Offering will be exercisable for one share of common stock at an initial exercise price of $1.97 per share (the “Initial Exercise Price”), the closing sales price of the Company’s common stock on October 29, 2021 (the last trading day prior to the date that the Purchase Agreement was entered into). The Warrants may be exercised commencing six months after the issuance date (the “Initial Exercise Date”) and terminating on the fifth anniversary of the Initial Exercise Date. The Warrants are exercisable for cash; provided, however that they may be exercised on a cashless exercise basis if, at the time of exercise, there is no effective registration statement registering, or no current prospectus available for, the issuance or resale of the shares of Common Stock issuable upon exercise of the Warrants. The exercise of the Warrants will be subject to a beneficial ownership limitation, which will prohibit the exercise thereof, if upon such exercise the holder of the Warrants, its affiliates and any other persons or entities acting as a group together with the holder or any of the holder’s affiliates would hold 4.99% (or, upon election of a purchaser prior to the issuance of any shares, 9.99%) of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of the Warrant held by the applicable holder, provided that the holders may increase or decrease the beneficial ownership limitation (up to a maximum of 9.99%) upon 61 days advance notice to the Company, which 61 day period cannot be waived.

The Warrants also include certain anti-dilution rights, which provide that if at any time the Warrants are outstanding, the Company issues or enters into any agreement to issue, or is deemed to have issued or entered into an agreement to issue (which includes the issuance of securities convertible or exercisable for shares of Common Stock), securities for consideration less than the then current exercise price of the Warrants, the exercise price of such Warrants will be automatically reduced to the lowest price per share of consideration provided or deemed to have been provided for such securities; provided, however, that unless and until the Company has received stockholder approval to reduce the exercise price of the Warrants below $1.97 per share (the “Floor Price”), no such adjustment to the exercise price may be made. Pursuant to the Purchase Agreement, the Company has agreed to use its reasonable best efforts to obtain stockholder approval within 90 days from the date of the prospectus supplement to remove the Floor Price of the Warrants. In the event that such stockholder approval is not obtained within 90 days of the date of the prospectus supplement, the Company has agreed to hold a special meeting of its stockholders every three months thereafter, for so long as the Warrants remain outstanding, to obtain such stockholder approval.

If the Company fails for any reason to deliver shares of Common Stock upon the valid exercise of the Warrants, subject to its receipt of a valid exercise notice and the aggregate exercise price, by the time period set forth in the Warrants, the Company will be required to pay the applicable holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of shares subject to such exercise (as calculated in the Warrant), $10 per trading day (increasing to $20 per trading day on the third trading day after such liquidated damages begin to accrue) for each trading day that such shares are not delivered. The Warrants also include customary buy-in rights in the event the Company fails to deliver shares of Common Stock upon exercise thereof within the time periods set forth in the Warrant.

Note 12 11 – Commitments and Contingencies

 

The Company’s office lease at 2893 Executive Park Drive Suite 201, Weston, Florida 33331 was terminated early on February 28, 2021 at the request of the landlord, without penalties to the Company.

The Company entered into a newan office lease to relocate our executive, administrative, and operating offices located in Sunrise, Florida where we leased approximately 5,279 square feet of office space at 1560 Sawgrass Corporate Parkway, Suite 130, Sunrise, FLFlorida 33323. In accordance with the terms of the office space lease agreement, the Company will be renting the commercial office space, for a term of almost eight years from March 1, 2021, through July 31, 2028. Monthly rental costs, including building maintenance assessment, for fiscal years 2022, 2023, 2024, 2025, 2026, 2027Additionally, the Group rents office space located in Puerto Rico, Thailand, Belgium, and 2028 are estimatedSwitzerland with lease terms ranging from five to be $6,224, $17,499 $18,862, $19,243, $19,635, $20,037, and $20,450, respectively.nine years.

 

On October 1, 2019,The subsidiary of the Company entered into a new contractseveral car operating leases for a new call center, approximately 4,048 square feet, at 6345 South Pecos Road, Suite 206, 207, and 208, Las Vegas, Nevada 89120. The lease hademployees with a term of one year24 to 62 months from October 1, 2019April, 2022, through September 30, 2020. Monthly base rental costs were (i) $ 3,643 from October 1, 2019 through November 30, 2019; and (ii) $3,789 from December 1, 2019 through September 30, 2020. The rent also included the monthly payment of the operating expenses (Tenant’s Proportionate Share of the Building and/or Project) which cost approximately $1,100 per month. We did not renew this lease.July, 2025.

 


The rent for the years ended February 28, 2021 and February 29, 2020 was $75,094 and $77,659, respectively. The Company recorded operating lease Right-to-Use asset of $15,843 along with current operating lease liability of $16,362 and long-term operating lease liability of $0 as of February 28, 2021.

The following schedule represents obligations and commitments on the part of the Company that are not included in liabilities:Company:

 

  Current  Long Term    
  FYE 2022  FYE 2023  Totals 
Office Leases $75,094  $209,629  $284,723 
Insurance and Other  55,916   55,916   111,832 
Totals $131,010  $265,545  $396,555 
  Current  Long Term    
  FYE 2023  FYE 2024  Totals 
Office Leases $611,168  $3,091,132  $3,702,300 
Car Leases  325,524   244,143   569,667 
Insurance and Other  140,472   7,200   147,672 
Totals $1,077,164  $3,342,475  $4,419,639 

 


Legal Matters

 

The Company is involved, from time to time, in litigation, other legal claims and proceedings involving matters associated with or incidental to our business, including, among other things, matters involving breach of contract claims, intellectual property, employment issues, and other related claims and vendor matters. The Company believes that the resolution of currently pending matters will notcould, individually or in the aggregate, have a material adverse effect on our financial condition or results of operations. However, assessment of the current litigation or other legal claims could change considering the discovery of facts not presently known to the Company or by judges, juries or other finders of fact, which are not in accord with management’s evaluation of the possible liability or outcome of such litigation or claims.

 

IDS Settlement

 

On August 15, 2019, the Company entered into an Intellectual Property Purchase Agreement with IDS Inc. (“IDS” and the “IP Purchase Agreement”). Pursuant to the agreement, the Company purchased certain proprietary technology from IDS for the reservation and booking of air travel, hotel accommodations, car rentals, and ancillary products, services, and amenities, integration of the same with the providers of such products and services, associated functions, including website addresses, patents, trademarks, copyrights and trade secrets relating thereto, and all goodwill associated therewith (collectively, the “IP Assets”). In consideration for the purchase, the Company issued IDS 1,968,000 restricted shares of restrictedCompany common stock (the “IDS Shares”) valued at $2.50 per share, or $4,920,000 in the aggregate.

 

On April 27, 2020, the Company filed a verified complaint for injunctive relief against IDS and TD Assets Holding, LLC (“TD Asset”), Navarro McKown, Aaron McKown and Ari Daniels, (“Daniels”), which parties are affiliated with IDS, in the Circuit Court of the Seventeenth Judicial Circuit in and for Broward County, Florida (Case No. CACE-20-007088). Pursuant to the complaint, the Company alleged causes of action against the defendants, including IDS, based on among other things, fraud, conspiracy to commit fraud, aiding and abetting fraud, rescission, and breach of contract, and sought a temporary and permanent injunction against the defendants, requiring such persons to return the 1,968,000 IDS Shares issued pursuant to the terms of the IP Purchase Agreement and preventing such persons from selling or transferring any IDS Shares, sought damages from the defendants, rescission of the IP Purchase Agreement, attorneys fees and other amounts. The defendants subsequently filed various counterclaims against the Company.

The complaint was filed because of IDS’s failure to deliver certain components of the IP Assets, certain other actions of IDS and the other of the defendants which the Company alleged constituted fraud. The Company sought to unwind the IP Purchase Agreement and sought damages for the Company due to IDS’s and the other defendants’ breaches thereunder. IDS, through its counsel, sent a letter threatening to bring a shareholders’ derivative action and/or direct suit against the Company. In response to such letter, the board of directors empowered the governance committee to conduct an internal investigation into the claims. The results of the investigation, conducted by several law firms, were presented to the Board and the Board concluded that no fraudulent activities occurred. The investigation concluded in October 2020.

 


On April 29, 2020, the Company filed a Verified Motion for Temporary Injunction (the “Injunction Motion”). Defendants IDS, TD Assets, and Ari Daniels filed an answer, affirmative defenses, and counterclaims (the “Answer and Counterclaim”). The Answer and Counterclaim included alleged breach of contract and tort claims against the Company. On September 17, 2020, the Company moved to strike the affirmative defenses and dismiss the counterclaims. On October 15, 2020, defendants IDS, TD Assets, and Ari Daniels filed an amended Answer and Counterclaim, including alleged breach of contract, tort, and federal securities claims against the Company, Mr. William Kerby, our ChiefCo-Chief Executive Officer and an employee of the Company.

 

On July 27, 2020, the Company entered into a confidential settlement agreement with certain of the defendants in the IDS matter, Navarro Hernandez, P.L., Aaron M. McKown, and Jeffery S. Bailey. The settlement provided for mutual releases of the parties and amounts payable from such parties to the Company in four tranches, in consideration for such settlement, of which all such payments have been timely paid pursuant to the terms of the settlement.

 

The remaining parties to the litigation subsequently attempted to mediate their claims pursuant to a court ordered mediation in February 2021.

 

Effective on May 18, 2021, the Company, IDS, TD Asset and Ari Daniels, the principal of IDS, entered into an Amendment to Intellectual Property Purchase Agreement (the “IP Purchase Amendment”). Pursuant to the IP Purchase Agreement, the parties amended the IP Purchase Agreement, with the Company agreeing to make a payment to IDS in the amount of $2,850,000 (the “Payment”), payable by way of an initial payment of $500,000, and twelve monthly payments of approximately $195,833 (collectively, the “Required Payments”), with such monthly payments beginning 30 days after the initial payment, which is due seven days after the date of the IP Purchase Amendment. Such monthly payments may be pre-paid at any time without penalty. At the Company’s option, any portion of the amount due may be paid to IDS by a party separate from the Company (either a related party of the Company or a third-party) (a “Paying Party”), for the benefit of the Company, which shall be treated for all purposes as a payment by the Company. As consideration for such Paying Party making such payment on behalf of the Company, IDS agreed to transfer the Paying Party a number of the IDS Shares equal to the amount of the cash payment(s) made by a Paying Party multiplied by 0.6888 as to the first $500,000 payment, and 0.691 as to the monthly payments (as applicable, the “Applicable Portion” of the IDS Shares). Upon each payment of amounts due to IDS pursuant to the terms of the IP Agreement Amendment as discussed above by the Company (instead of a Paying Party), IDS agreed to transfer the portion of the IDS Shares equal to the Applicable Portion, to the Company.

 


 

Axion ClaimPursuant to the IP Purchase Amendment, on May 19, 2021, the Company made the initial payment of $500,000. Thereafter, the first 344,400 shares of common stock repurchased by the Company were returned to treasury and cancelled.

 

On September 27, 2021, the Court entered the Agreed Order. The Court ordered that:

(i)the Company resume the monthly payment on or before September 28, 2021 (which payment has not been made due to failure of IDS to provide required documents);

(ii)$24,583.33 shall be paid monthly to one of IDS’s counsel and the balance of each payment shall be paid to the IDS Defendants; and

(iii)$20,000 of the 12th monthly payments shall be withheld pending further order of the court; and

(iv)NextPlay/(formerly Monaker) was awarded its fees and costs associated with the filing of the Motion.

As of February 28, 2022, IDS still has not provided any of the necessary documents in order make the stock transfers.

Litigation between Axion and NextPlay

On January 15, 2021, Axion Ventures, Inc., filed a civil claim in the Supreme Court of British Columbia (Action No. S-209245), against J. Todd Bonner, Chairman of the Company’s board of directors, Nithinan Boonyawattanapisut, our Co-Chief Executive Officer and director, the Company, William Kerby, our ChiefCo-Chief Executive Officer, Cern One Limited, Red Anchor Trading Corp., CC Asia Pacific Ventures Ltd., HotPlay, Enterprise Limited, HotPlay (Thailand) Ltd., Next Fintech Holdings, Inc. (formerly Longroot, Inc.). and certain other parties. The claim alleges that Mr. Bonner and his wife, Ms. Boonyawattanapisut, used their positions as directors and officers of Axion and certain of its subsidiaries, together with the other defendants, to unlawfully take ownership of Axion’s subsidiaries and assets, including its intellectual property. Axions’Axion’s claim includes causes of action for conspiracy and fraud; theft of Axion intellectual property and ownership of Longroot; an investor scheme; breaches of fiduciary duty by Mr. Bonner and Ms. Boonyawattanapisut and others; negligence; knowing assistance of breach of fiduciary duty; collective trust; knowing receipt of trust property; knowing assistance in dishonest conduct; unjust enrichment; and breach of honest performance. The claim seeks general and special damages for conspiracy, damages for breaches of fiduciary duties, accountings and repayments of amounts alleged improperly paid, including to Monaker,the Company, interim, interlocutory and permanent injunctions, rescission of the issuance of shares of Longroot Cayman; restitution; the return of Axion’s intellectual property; and other accountings, damages, punitive damages, interest and special costs.

 

On April 9, 2021, the Company, on behalf of itself, Mr. Kerby and Next Fintech Holdings, Inc. (formerly Longroot, Inc.), filed a response to Axion’s claim whereby all such parties disputed Axion’s claims and argued all such transactions involving the Company, Mr. Kerby and LongrootNext Fintech which are the subject of Axion’s claims were legitimate and pleading various other defenses. The Company, Mr. Kerby and LongrootNext Fintech dispute Axion’s claims and intendcontinue to vigorously defend themselves against the allegations made.

 

The lawsuit states that J. Todd Bonner, Nithinan ‘Jess’ Boonyawattanapisut, Cern One Limited, and Red Anchor Trading Corp. made loans totaling USD $9,141,372 to the defendants at various times between March 2018 and June 2020. Mr. Bonner is the Co-Chairman of NextPlay, and a past CEO and Director of Axion. His wife, Ms. Boonyawattanapisut, is the Co-CEO of NextPlay. On or about July 21, 2020, the Company and the lenders entered into a share exchange agreement whereby the lenders transferred rights to repayment of USD $7,657,023 of the debt owed by defendants plus interest to the Company, in exchange for Company stock or warrants. On or about August 23, 2021, counsel for NextPlay demanded repayment of the debts owed by the defendants, and defendants have not paid any portion of the amounts due.

On September 1, 2021, the Company filed a lawsuit in the Supreme Court of British Columbia (Action No. S-217835) under the Canadian Foreign Money Claims Act (R.S.B.C. 1996, c. 155). The defendants are Axion; Axion Interactive Inc., a wholly-owned subsidiary of Axion; and Ying Pei Digital Technology (Shanghai) Company Ltd., a Chinese wholly-owned subsidiary of Axion. NextPlay owns approximately 33.85% of the outstanding shares of Axion.

The Company alleges debts that the defendants refuse to pay totaling USD $7,657,023, under various promissory notes and loan agreements acquired by the Company in July 2020. The Company also seeks interest on the past-due amounts and costs associated with collection.


In November 2021, the Company commenced a new claim for the debt claimed to reflect the difference between what was owed and what the Company is claiming to avoid double-claiming.

In February 2022, the court was receptive to loans related evidence (e.g. loan agreements, bank statements, board resolutions, etc.), and that it will be further resolved together with other Axion issues in the next trial. The summary trial judge has advised that he wishes to take case management over this and several related proceedings, he advised further that the initial four weeks of trial plan in June 2022 might be insufficient. While the June trial dates have not yet officially been adjourned, it is anticipated that the trial of this action would be reset for 12 weeks sometime in 2023 or early 2024. Document and oral discovery are ongoing, which will be necessary for the parties to make full disclosure on all issues.

Note 13 12 – Business Segment Reporting

 

Accounting Standards Codification 280-16280-10Segment Reporting, established standards for reporting information about operating segments in annual consolidated financial statements and required selected information about operating segments in interim financial reports issued to stockholders. It also established standards for related disclosures about products, services, and geographic areas. Operating segments are defined as components of the enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance.

 

The Company has twothree operating segments consisting of (i) Media Division, which consists of HotPlay and Reinhart/Zappware, (ii) FinTech Division, which consists of Longroot and NextBank, and (iii) Travel Division, which includes NextTrip holdings and Maupintour which have various products and services related to its technology solutions platforms related to travel marketplaces and (ii) Longroot Thailand operates ICO Portal Platform where applicable investors are able to sign up and invest in available ICOs, and issuers can issue tokens and list information related to their offerings. The travel related services include destination tours / activities, accommodation rental listings, hotel listings, air and car rental.Extraordinary Vacations USA. The Company’s chief operating decision maker ismakers are considered to be the ChiefCo-Chief Executive Officer.Officers. The chief operating decision maker allocatesmakers allocate resources and assesses performance of the business and other activities at the single operating segment level.

 

Schedule of segments

For the year ended February 28, 2021 NextTrip  Longroot  
Total
 
Sales $48,338 $  $48,338 
Net loss $(16,490,188)$(18,467)  $  (16,508,655) 
For the year ended February 29, 2020 NextTrip  Longroot  
Total
 
Sales $441,769 $  $441,769 
Net loss $(9,454,686)$  $  (9,454,686) 

 

For the year ended February 28, 2022  NextMedia  NextFinTech  NextTrip  Total 
Revenue  6,466,498   1,581,421   155,407  $8,203,326 
Cost of Revenue  1,718,286   490,911   137,170   2,346,367 
Gross Profit  4,748,212   1,090,510   18,237  $5,856,959 

For the period ended February 28, 2021*NextMediaNextFinTechNextTripTotal
Revenue$
Cost of Revenue
Gross Profit$

*Due to the reverse acquisition with HotPlay, the year-ago results incorporated only HotPlay’s financials.

There were no reconciling or inter-company items between segments.

 

Schedule of geographic information

Sales 2021   2020 
United States $48,338      $441,769 
Non-United States $  $ 
  $48,338  $441,769 

 

Long-lived Assets 2021   2020 
United States $10,517,697      $8,658,050 
Non-United States $2,577,705  $ 
  $13,095,402  $8,658,050 
Revenue 

For year
ended

February 28,
2022

  

For period
ended

February 28,
2021

 
United States and Puerto Rico $1,736,828  $ 
Europe  6,466,498    
Thailand      
  $

8,203,326

  $ 

Long-lived Assets February 28,
2022
  February 28,
2021
 
United States and Puerto Rico $44,128,496  $ 
Europe  11,913,658    
Thailand  9,951,343   7,785,396 
  $65,993,497  $7,785,396 


Note 1413 – Fair Value Measurements

 

The Company has adopted the provisions of ASC Topic 820, Fair Value Measurements, which defines fair value, establishes a framework for measuring fair value in GAAP, and expands disclosures about fair value measurements. ASC 820 does not require any new fair value measurements, but provides guidance on how to measure fair value by providing a fair value hierarchy used to classify the source of the information. The fair value hierarchy distinguishes between assumptions based on market data (observable inputs) and an entity’s own assumptions (unobservable inputs).

 


The hierarchy consists of three levels:

 

Level 1 - Quoted prices in active markets for identical assets or liabilities.

Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets of liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

 

Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability.

 

TheAs of February 28, 2022, the Company analyzes all financial instruments with features of bothhad the assets and liabilities and equity under ASC 480, “Distinguishing Liabilities from Equity” and ASC 815, “Derivatives and Hedging”. Derivative liabilities are adjusted to reflect fair value at each period end, with any increase or decrease in the fair value being recorded in results of operations as adjustments to fair value of derivatives. The effects of interactions between embedded derivatives are calculated and accounted for in arriving at the overall fair value of the financial instruments. In addition, the fair values of freestanding derivative instruments such as warrants, and option derivatives are valued using the Black-Scholes model.

The Company uses Level 3 inputs for its valuation methodology for the warrant derivative liabilities and embedded conversion option liabilities as their fair valuesthat were determined by using the Black-Scholes option-pricing model based on various assumptions. The Company’s derivative liabilities are adjusted to reflect fair value at each period end, with any increase or decrease in the fair value being recorded in results of operations as adjustments to fair value of derivatives.

The Company’s investments in unconsolidated affiliates; short term and long term, are recordedmeasured at fair value based on level 1 heirarchyor for which fair value was disclosed using different levels of inputs as discussed above. The values of these investments asfollows:

  As of February 28, 2022 
  Level 1  Level 2  Level 3  Total 
Financial assets            
Cash         6,618,951   6,618,951 
Short Term Investment        304,509   304,509 
Accounts Receivable        766,793   766,793 
Loans receivable        17,355,163   17,355,163 
Unbilled receivable        3,277,408   3,277,408 
Other Receivable        343,681   343,681 
Other Receivable, related party        155,425   155,425 
Advance for investment        3,227,117   3,227,117 
Investments in unconsolidated affiliates  14,980         14,980 
Convertible Notes Receivable, related Party        4,594,214   4,594,214 
Operating lease right-of-use asset        3,962,596   3,962,596 
Security Deposits        264,373   264,373 
                 
Financial liabilities                
Line of Credit and Notes Payable, net        7,612,554   7,612,554 
Accounts payable & accrued Expense        8,595,064   8,595,064 
Other current liabilities        392,684   392,684 
Operating lease liability        3,829,750   3,829,750 
Other liabilities        7,608,279   7,608,279 
Note payable long term, related parties        1,731,354   1,731,354 
Other long term liability        34,847   34,847 

As of February 28, 2021, and February 29, 2020 are $5,176,995 and $2,829,031 respectively.there was none.

 

Other financial instruments of the Company are short-term in nature or carrying interest at rates close to the market interest rates, their fair value is not expected to be materially different from the amounts presented in the Consolidated Balance Sheet.

Fair value of financial instruments

The methods and assumptions used by the Grouping estimating the fair value of financial instruments are as follows:

a) For financial assets and liabilities which have short-term maturities, including cash and cash equivalents, short term investment, accounts receivable, loans receivable, unbilled receivables, other receivables, line of credit and notes payable and accounts payable, the carrying amounts in the balance sheets approximate their fair value. 

b) The fair value of investment in unconsolidated affiliates is generally derived from quoted market prices, or based on generally accepted pricing models when no market price is available.


Note 1514 – Income Taxes

 

MonakerNextPlay follows the guidance of ASC 740, “Income Taxes.” Deferred income taxes reflect the net effect of (a) temporary differences between carrying amounts of assets and liabilities for financial purposes and the amounts used for income tax reporting purposes, and (b) net operating loss carry- forwards. No net provision for refundable Federal income tax has been made in the accompanying statement of loss because no recoverable taxes were paid previously. Similarly, no deferred tax asset attributable to the net operating loss carry-forward has been recognized, as it is not deemed likely to be realized.

 

Overseas subsidiaries

Corporate income tax of the overseas subsidiaries has been calculated by applying the applicable statutory rates of the relevant countries.

The provision for income taxes consists of the following components for the years endedyear/periodended February 28, 20212022 and February 29, 2020:2021:

 

    2021   2020 
Current  $  $ 
Deferred       
   $  $ 
  2022  2021 
Current $16,876  $ 
Deferred      
  $16,876  $ 

 

The components of deferred income tax assets and liabilities for the years ended February 28, 20212022 and February 29, 2020,2021, are as follows:

 

  2021  2020 
Net operating loss carry-forwards $38,760,093  $32,292,252 
Equity based compensation  4,329,000   4,329,000 
Amortization and impairment of intangibles  581,529   74,920 
Total deferred assets  43,670,622   36,696,172 
Valuation allowance  (43,670,622)  (36,696,172)
  $  $ 
  2022  2021 
Net operating loss carry-forwards $21,642,536  $16,856,859 
Impairment loss  1,580,367    
Investment valuation  606,940    
Other  5,735   581,529 
Total deferred assets $23,835,578  $17,438,388 
Valuation allowance  (23,835,578)  (17,438,388)
  $  $ 

 


The income tax provision differs from the expense that would result from applying statutory rates to income before income taxes principally because of the valuation allowance on net deferred tax assets for which realization is uncertain.

 


The effective tax rates for years ended February 28, 20212022 and February 29, 202028, 2021 were computed by applying the federal and state statutory corporate tax rates as follows:

 

  2021  2020 
Statutory Federal income tax rate -21.0% -21.0%
State taxes, net of Federal -4.5% -4.5%
Permanent difference -1.0% -1.0%
Change in valuation allowance 26.5% 26.5%
  0% 0%
  2022  2021 
Statutory Federal income tax rate  -21.0%  -21.0%
State taxes, net of Federal  -4.5%  -4.5%
Permanent difference  -1.0%  -1.0%
Change in valuation allowance  26.5%  26.5%
   0%  0%

 

The valuation allowance has decreased by $6,974,450 for the fiscal year ended 2021 primarily as a result of a current year tax loss of $6,467,841 which increased net operating loss carryforward to $38,760,093 at February 28, 2021, from $32,292,252 at February 29, 2020. There is $506,609 increase in amortization of intangibles at February 28, 2021, which was $0 at February 29, 2020.

The net operating loss (“NOL”) carry-forward balance as of February 28, 20212022 is approximately $43.7$86.0 million, expiring between 2029 and 2039.the majority of which do not have an expiration date. Management has reviewed the provisions of ASC 740 regarding assessment of their valuation allowance on deferred tax assets and based on that criteria determined that it does not have sufficient taxable income to offset those assets. Therefore, management has assessed the realization of the deferred tax assets and has determined that it is more likely than not that they will not be realized and has provided a full valuation allowance against these assets. The utilization of the NOL’s may be limited by Internal Revenue Code Section 382 which restricts annual utilization following a greater than 50% change in ownership.

 

At the adoption date the Company applied ASC 740 to all tax positions for which the statute of limitations remained open. As a result of the implementation of ASC 740, the Company did not recognize a material increase in the liability for uncertain tax positions as of February 28, 2021.2022.

Note 1615 – Earnings Per Share

 

The following table provides a reconciliation of the numerators and denominators of the basic and diluted earnings per-share computations for each of the past two fiscal years:

 

For the year ended February 28, 2021: Income
(Numerator)
 Weighted
Average
Shares
(Denominator)
 Per Share
Amount
Basic earnings $(16,504,039)  14,728,741  $(1.12)
Effect of dilutive securities  —     —     —   
Dilutive earnings $(16,504,039)  14,728,741  $(1.12)
For the year ended February 29, 2020:            
Basic earnings (losses) $(9,454,686)  11,773,633  $(0.80)
Effect of dilutive securities  —     —     —   
Dilutive earnings $(9,454,686)  11,773,633  $(0.80)
  

Net Loss

attributable to

common
shareholders

(Numerator)

  

Weighted Average Shares

(Denominator)

  Per Share Amount 
For the year ended February 28, 2022:         
Basic earnings $(37,972,770)  94,513,747  $(0.40)
Effect of dilutive securities         
Dilutive earnings $(37,972,770)  94,513,747  $(0.40)
             
For the period from March 6, 2020 (date of inception) to February 28, 2021:            
Basic earnings $(1,200,309)  62,400,000  $(0.02)
Effect of dilutive securities         
Dilutive earnings $(1,200,309)  62,400,000  $(0.02)

 

Basic earnings per share are computed by dividing net income by the weighted average number of shares of common stock outstanding during the year/period. Diluted earnings per share is computed by dividing net income by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during each year/period. Diluted earnings per common share is not presented because it is anti-dilutive.

 


Note 1716 – Subsequent Events

 

Soma Innovation Lab Joint VentureATM Offering

On March 8, 2021,4, 2022, NextPlay Technologies, Inc. entered into an At The Market Offering Agreement (the “Agreement”) with H.C. Wainwright & Co., LLC (the “Agent”), to create an at-the-market equity program under which the Company may, from time to time, offer and sell shares of its common stock, par value $0.00001 per share, having an aggregate gross offering price of up to $20 million (the “Shares”) to or through the Agent (the “ATM Offering”).


Subsequent events related to Agreements with Streeterville

Standstill agreement

On April 29, 2022, the Company entered into a Joint Venturethe Standstill Agreement with Soma Innovation Lab (“Soma”). Pursuant to the agreement, the parties agreed to form a joint venture for designing hyper-personalized experiences for targeted gamers. The agreement requires us to provide Soma the use of the HotPlay technology, assuming we acquire ownership of such technology because of the closing of our pending Share Exchange Agreement with HotPlay and its stockholders, which technology is owned by HotPlay, and that we would issue the principals of Soma 72,000 shares of restricted common stock (valued at $180,000), of which $45,000 was earned immediately and the remaining shares will be earned at the rate of 6,000 per month. Pursuant to the agreement, Soma agreed to provide us use of an email client list and other services. The joint venture is owned 50/50 between us and Soma, with net profits/revenues paidStreeterville, pursuant to the same 50/50 split. In the event the joint venture achieves revenue more than expenses and the Company recovers the $180,000 value of the shares, then we agreed to issue Soma a bonus of 50,000 shares of restricted common stock. The joint venture (and agreement) each have a term of two years. The Company also agreed to use Soma for certain work to be performed on its websites and travel magazine and agreed to pay Soma $75,000 per month ($225,000 in aggregate) for such work, payable by way of the issuance of 90,000 shares of restricted common stock. As of May 29, 2021, a total of 108,000 of the shares due to Soma have been issued, and a total of 54,000 shares are potentially due pursuant to the terms of the agreement discussed above.

HotPlay Convertible Notes

On March 16, 2021, March 19, 2021, and April 15, 2021, HotPlay loaned the Company $9 million, $1 million and $2 million, respectively. The loans were made pursuant to the terms of the HotPlay Exchange Agreement and were evidenced by Convertible Promissory Notes dated effective March 16, 2021, March 19, 2021, and April 15, 2021, in the amount of $9,000,000, $1,000,000, and $2,000,000 respectively. The Convertible Promissory Notes have substantially similar terms as the HotPlay Convertible Notes described above under “Note 9 - Notes Payable—HotPlay Convertible Notes”. With the April 15, 2021 loan, HotPlay has loaned the Company all $15 million of the funds required to be funded pursuant to the terms of the HotPlay Exchange Agreement.

MarchOctober 2021 Streeterville Note, Purchaseoriginal principal amount of $1,665,000, with a condition amendment that lender will not seek to redeem any portion of the October 2021 Streeterville Note until September 18, 2022 and increased the outstanding balance of the note by $87,639.33 (the “Standstill Fee”), as a result, the outstanding balance of the note is $1,840,912.84 (including outstanding interest).

 

May 2022 Note Purchase Agreement

On March 22, 2021,May 5, 2022, the Company entered into athe Note Purchase Agreement dated March 23, 2021 (the “March 2021May 2022 Note Purchase Agreement”) with Streeterville, an accredited investor, pursuant to which the Company sold Streeterville a Secured Promissory Note in the original principal amount of $9,370,000$2,765,000 (the “March 2021May 2022 Streeterville Note”). Streeterville paid consideration of (a) $7,000,000 in cash; and (b) issued$2,500,000, which represents the Companyoriginal principal amount less a promissory note in the amount of $1,500,000 (the “March 2021 Investor Note”), in consideration for the March 2021 Streeterville Note, which included an$250,000 original issue discount, of $850,000 (the “OID”)which was fully earned upon issuance, and reimbursement of Streeterville’s transaction expenses of $20,000. Aa total of $700,000 of the OID is fully earned$15,000 to cover Streeterville’s professional fees and the remaining $150,000 is not fully earned until the March 2021 Investor Note is fully-funded by Streeterville, which March 2021 Investor Note was fully funded on May 26, 2021.transaction expenses.

 

The March 2021May 2022 Streeterville Note bears interest at a rate of 10% per annum and matures 12 months after its issuance date (i.e., on March 23, 2022)May 5, 2023). From time to time, beginning six months after issuance, Streeterville may redeem aany portion of the March 2021May 2022 Streeterville Note, notup to exceed ana maximum amount of $1.750 million$625,000 per month if the March 2021 Investor Note has not been funded by Streeterville, and $2.125 million inmonth. In the event the March 2021 Investor Note has been funded in full. In the event we don’tCompany fails to pay the amount of any requested redemption within three trading days, an amount equal to 25% of such redemption amount is added to the outstanding balance of the March 2021May 2022 Streeterville Note. Under certain circumstances, the Company may defer the redemption payments up to three times, for 30 days each, provided that upon each such deferral, the outstanding balance of the March 2021May 2022 Streeterville Note is increased by 2%. Subject to the terms and conditions set forth in the March 2021May 2022 Streeterville Note, the Company may prepay all or any portion of the outstanding balance of the March 2021May 2022 Streeterville Note at any timeon or before the date that is 6 months from the Effective Date subject to a prepayment penalty equal to 10%5% of the amount of the outstanding balance, and after 6 months from the Effective Date will be subject to be prepaid.10%. For so long as the March 2021May 2022 Streeterville Note remains outstanding, the Company has agreed to pay to Streeterville 20% of the gross proceeds that the Company receives from the sale of any of its common stock or preferred stock within ten days of receiving such amount, which payments will be applied towards and will reduce the outstanding balance of the March 2021May 2022 Streeterville Note, which percentage increases to 30% upon the occurrence of, and continuance of, an event of default under the March 2021 Streeterville Note (each an “Equity Payment”).Note. Each time that we failthe Company fails to pay an Equity Payment, the outstanding balance of the March 2021May 2022 Streeterville Note automatically increases by 10%. Additionally, in the event we failthe Company fails to timely pay any such Equity Payment, Streeterville may seek an injunction which would prevent usthe Company from issuing common or preferred stock until or unless we pay suchthe Company paid all past-due Equity Payment.Payments.

 


The March 2021 Streeterville Note provides that if anyUntil all of the following events have not occurred on or before June 30, 2021,Company’s obligations under the then outstanding balance of the note (including accruedNote are paid and unpaid interest) increases by an amount equal to 25% of the then-current outstanding balance thereof: (a) HotPlay must have become a wholly-owned subsidiary of the Company; (b) during the period beginning on July 21, 2020, and ending on the date that the HotPlay Share Exchange is consummated, HotPlay must have raised at least $15,000,000performed in cash or debt through equity investments (which has been completed); (c) upon consummation of the HotPlay Share Exchange, all outstanding debt owed byfull, the Company has to HotPlay must have either been forgiven by HotPlay or convertedcomply with covenants below

i)so long as Investor beneficially owns the Note and for at least twenty (20) Trading Days (as defined in the Note) thereafter, Company will timely file on the applicable deadline all reports required to be filed with the SEC pursuant to Sections 13 or 15(d) of the 1934 Act, and will take all reasonable action under its control to ensure that adequate current public information with respect to Company, as required in accordance with Rule 144 of the 1933 Act, is publicly available, and will not terminate its status as an issuer required to file reports under the 1934 Act even if the 1934 Act or the rules and regulations thereunder would permit such termination;

ii)the Common Stock shall be listed or quoted for trading on any of (a) NYSE, (b) NASDAQ, (c) OTCQX, or (d) OTCQB;

iii)trading in Company’s Common Stock will not be suspended, halted, chilled, frozen, reach zero bid or otherwise cease trading on Company’s principal trading market;

iv)the Company will make a payment on the Note equal to twenty percent (20%) of the gross proceeds Company receives from the sale of any of its Common Stock or preferred stock, within ten (10) days of receiving such an amount;


v)the Company will not enter into any financing transaction with John Kirkland or any entity owned by or affiliated with John Kirkland;

vi)the Company will not make any Variable Security Issuances (as defined below) without Investor’s prior written consent, which consent may be granted or withheld in Investor’s sole and absolute discretion; and

vii)the Company hereby grants to Investor a participation right, whereby Investor shall have the right to participate in Investor’s discretion in up to twenty percent (20%) of the amount raised in any equity or debt financing. In furtherance thereof, should Company seek to raise capital via any transaction covered by the foregoing participation right it shall provide Investor written notice of such proposed transaction, along with copies of the proposed transaction documents. Investor shall then have up to five (5) calendar days to elect to purchase up to twenty percent (20%) of securities proposed to be issued in such transaction on the most favorable terms and conditions offered to any other purchaser of the same securities. The parties agree that in the event Company breaches the covenant set forth in this agreement, Investor’s sole and exclusive remedy shall be to receive, as liquidated damages, an amount equal to twenty percent (20%) of the amount Investor would have been entitled to invest under the participation right, which may be added to the Outstanding Balance of the Note if not otherwise paid in cash by Company. For purposes hereof, the term “Variable Security Issuance” means any issuance of any Company securities that (A) have or may have conversion rights of any kind, contingent, conditional or otherwise, in which the number of shares that may be issued pursuant to such conversion right varies with the market price of the Common Stock, or (B) are or may become convertible into Common Stock (including without limitation convertible debt, warrants or convertible preferred stock), with a conversion price that varies with the market price of the Common Stock, even if such security only becomes convertible following an event of default, the passage of time, or another trigger event or condition, but shall not include an Exempt Issuance. For avoidance of doubt, the issuance of Common Stock under, pursuant to, in exchange for or in connection with any contract or instrument, whether convertible or not, is deemed a Variable Security Issuance for purposes hereof if the number of Common Stock to be issued is based upon or related in any way to the market price of the Common Stock, including, but not limited to, Common Stock issued in connection with a Section 3(a)(9) exchange, a Section 3(a)(10) settlement, or any other similar settlement or exchange. For purposes hereof “Exempt Issuance” means (a) securities issued upon the exercise or exchange of or conversion of any securities exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding on the date of this Agreement, provided that such securities have not been amended since the date of this Agreement to increase the number of such securities or to decrease the exercise price, exchange price or conversion price of such securities or to extend the term of such securities, and (b) securities issued pursuant to acquisitions or strategic transactions approved by a majority of the disinterested directors of the Company, provided that such securities are issued as “restricted securities” (as defined in Rule 144), have no variable rate terms or components and carry no registration rights that require or permit the filing of any registration statement in connection therewith, and provided that any such issuance shall only be to a Person (or to the equity holders of a Person) which is, itself or through its subsidiaries, an operating company or an owner of an asset in a business synergistic with the business of the Company and shall provide to the Company additional benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities.

On June 2 2022, the Company entered into the Company’s common stock;Global amendment to address the conditions in the Note October 2021 and (d)the Note May 2022 that HotPlay must have becomebecomes a co-borrower on the March 2021 Streeterville Note (collectively,Notes and jointly and severally assumes all of the March 2021 Note Transaction Conditions”).obligations and duties of Borrower under those Notes, shall now jointly refer to HotPlay and NextPlay.

 

The March 2021 Note Purchase Agreement required that we complete the purchase of the Reinhart Interactive TV AG equity interests discussed below (the “Reinhart Interest”), within ten days of the date of the sale of the March 2021 Streeterville Note, and that the Company pledge the Reinhart Interest to Streeterville pursuant to a pledge agreement thereafter, both of which were timely completed.  June 2022 Promissory Notes

 

Also, on March 23, 2021, the Company and Streeterville entered into a Forbearance Letter (the “Forbearance Letter”), whereby Streeterville waived breaches of agreements and defaults which occurred under the terms of that certain $5.52 million Secured Promissory Note (the “November 2020 Streeterville Note”) and related agreements dated November 23, 2020, between the Company and Streeterville, relating to the Company’s failure to timely terminate prior UCC filings. In the event we fail to terminate all outstanding UCC financing statements by April 15, 2021, the outstanding balance of the November 2020 Streeterville Note will automatically increase by 5%; provided, however, that such failure will not be considered an event of default under such note.

On May 26, 2021, with funds raised through our May 2021 Underwritten Offering (discussed below), we made a payment of $1,857,250 on the March 2021 Streeterville Note, which had a balance of approximately $6 million as of May 29, 2021.

Letter of Intent to Acquire Axion shares

On October 28, 2020,June 13, 2022, the Company entered into two promissory notes, each in the principal amount of approximately CAD $231,121 (USD $178,234), with its former legal counsel, which notes were issued, along with a non-binding LetterCAD $10,000 (USD $7,712) in lieu of Intent (as amended by the first amendment thereto dated March 10, 2021, the “Letterimmediate payment of Intent”) with Radiant Ventures Limited, which manages Radiant VC1 Limited and Radiant PV 1 Limited, two stockholders of Axion, which entity the Company acquired 33.85% of (provided thatoutstanding amounts payable to such ownership of Axion has not been formally transferredcounsel for legal services previously rendered to the Company to date)Company. The first note will mature on November 16, 2020, as discussed above in “Note 6 - Acquisitions and Dispositions-Acquisition of Axion Shares”.

Pursuant to the Letter of Intent, the Company agreed, subject to certain condition precedents, including regulatory approvalsJuly 31, 2022, and the entry into material agreements with the sellers, to acquire approximately 12 million shares of Axion, equal to 5.7% of Axion’s outstanding shares, from the stockholders for approximately $2 million, payable in a combination of stock and cash. In connection with our entry into the Letter of Intent, we paid the sellers a $500,000 non-refundable deposit towards the cash purchase price of the shares in or around October 2020 (representing 25% of such purchase price). We also issued the sellers 235,000 shares of common stock in March 2020, representing an additional 25% of the purchase price. Both payments are non-refundable. A final payment of 50% of the purchase price is due 10 days after the British Columbia Securities Commission (BCSC) lifts a cease trade ordersecond note will mature on Axion’s shares and is payable at the option of the sellers in cash or shares of the Company’s common stock, based on a 20% discount to the Company’s stock price at the time the election to take such final payment in shares is made,September 1, 2022; provided, that such stock price valuation will not be less than $2.00 per share and not more than $3.00 per share. The Letter of Intent terminates if the final payment has not been made by the earlier of June 30, 2021 and 15 days after the BCSC lifts the Axion no trade order. The purchase is also contingent on the sellers granting the Company a proxy to vote the shares to be purchased of Axion through closing. The purchase remains subject to the negotiation of, and entry into, a definitive purchase agreement with the sellers, as well as other closing conditions, which have not been entered into and/or which have not been completed, to date.


Reinhart Interactive TV AG and Zappware N.V. Acquisition

On January 15, 2021, the Company entered into a Founding Investment and Subscription Agreement (the “Investment Agreement”) with Reinhart Interactive TV AG, a company organized in Switzerland (“Reinhart”), and Jan C. Reinhart, the founder of Reinhart (“Founder”).

The Investment Agreement contemplated the Company acquiring 51% of the ownership of Reinhart, in consideration for 10,000,000 Swiss Francs (approximately $10.8 million US), The closing of the transactions contemplated by the Investment Agreement was to take place on April 1, 2021, or earlier if the conditions to closing were earlier satisfied. Conditions to closing included the Company paying the required capital contribution, approval of the transaction by the board of directors of the Company and Reinhart, and certain requirements and confirmations required by Swiss law. The Investment Agreement included customary representations and warranties of the parties. We also agreed to reimburse the Founder’s legal fees of up to 30,000 Swiss Francs (approximately $33,670) in connection with the transaction. Additionally, in the event we failed to close the transactions contemplated by the Investment Agreement by April 1, 2021, we agreed to pay the Founder 500,000 Swiss Francs (approximately $560,000), as a break-up fee.

We closed the transactions contemplated by the Investment Agreement on March 31, 2021, by paying the Founder $10.8 million in cash. The consideration paid to the Founder came largely from funds advanced by HotPlay pursuant to HotPlay Notes.

Reinhart is in the business of providing a software-based TV and video distribution platform to telecom operators and digital content owners and providing services to telecom operators and digital content owners for user interaction design, as well as software development, deployment and support.

In connection with our entry into the Investment Agreement, we entered into a Founding Shareholders’ Agreement with the Founder (the “Shareholders’ Agreement”). The Shareholders’ Agreement set forth certain rules for the governance and control of Reinhart. The Shareholders’ Agreement provides that the board of directors of Reinhart will consist of five members, three of which will be appointed by the Founder and other shareholders of Reinhart, and two of which will be appointed by the Company which include William Kerby, the Company’s Chief Executive Officer, and Mark Vange, the Chief Technology Officer of HotPlay; that any material shareholder matters are required to be approved by shareholders holding at least 66 2/3% of the total outstanding vote of Reinhart; that in the event Reinhart issues, within five years after the closing date, any equity or convertible equity, with a price less than the most recent valuation of Reinhart’s shares, the shares held by each director who is appointed by the Founder are subject to weighted average anti-dilution protection; provides for various restrictions on transfers of shares of Reinhart, including right of first refusal rights, tag-along rights, and drag-along rights, as well as certain rights which would trigger the right of the other parties to the Shareholders’ Agreement to acquire the shares held by an applicable shareholder, for the higher of the fair market value and the nominal value of the shares (except in the case of (c) where the purchase price is the lower of such amounts), if such shareholder (a) commits a criminal act against the interests of another party, Reinhart or its affiliates; (b) breaches the Shareholders’ Agreement, and fails to cure such breach 20 days after notice thereof is provided; or (c) the employment of any employed shareholder is terminated for certain reasons.


The Shareholders’ Agreement also provides a right for the Founder and any other persons appointed as directors by the Founder to put their shares to the Company, at which time the Company will be required to purchase such shares (the “Founder’s Shares”).

The Shareholders’ Agreement also allows the parties to file for an initial public offering on a Swiss trading exchange. The Shareholders’ Agreement has a term of 10 years, extendable thereafter for successive five-year periods, unless terminated by either party with 12 months prior written notice (provided that any such termination shall only be applicable to the terminating shareholder), subject to earlier termination in connection with certain initial public offerings.

Convertible Promissory Notes

On April 8, 2021, the Company entered into an Exchange Agreement with William Kerby, its Chief Executive Officer and director and Monaco Investment Partners II, LP (“MI Partners”), of which Donald P. Monaco is the managing general partner and the Chairman of the board of directors of the Company (the “Exchange Agreement”). Pursuant to the Exchange Agreement, the terms of which were approved by the board of directors of the Company, Mr. Kerby and MI Partners exchanged their right to an aggregate of $1,016,314 in accrued dividends (the “Accrued Dividends”) which had accrued on the Company’s outstanding Series A Preferred Stock, which had been held by Mr. Kerby and MI Partners prior to the conversion of such Series A Preferred Stock into common stock of the Company in August 2017, for Convertible Promissory Notes. Specifically, Mr. Kerby exchanged rights to $430,889 of accrued dividends on the Series A Preferred Stock for a Convertible Promissory Note with a principal balance of $430,889 and MI Partners exchanged rights to $585,425 of accrued dividends on the Series A Preferred Stock for a Convertible Promissory Note with a principal balance of $585,425 (the “Convertible Promissory Notes”).

The Convertible Promissory Notes accrue interest at the rate of 12% per annum, compounded monthly at the end of each calendar month, with such interest payable at maturity or upon conversion. The principal and accrued interest owed under the Convertible Promissory Notes is convertible, at the option of the holders thereof, into shares of the Company’s common stock, at any time beginning seven days after the Closing Date (defined below) and prior to the payment in full of such Convertible Promissory Notes by the Company, at a conversion price equal to the greater of (i) the closing consolidated bid price of the Company’s common stock on April 8, 2021 (which was $3.02); and (ii) the five-day volume weighted average price of the Company’s common stock for the five trading days following the date that the HotPlay Exchange Agreement closes. The Convertible Promissory Notes are unsecured, have a maturity date of April 7, 2022, and include standard and customary events of default. 

IFEB Bank Transaction

On April 1, 2021, we entered into a Bill of Sale for Common Stock, effective March 22, 2021 (the “Bill of Sale”), with certain third parties pursuant to which the Company agreed to purchase 2,191,489 shares (the “IFEB Shares”) of authorized and outstanding Class A Common Stock of International Financial Enterprise Bank, Inc., a Puerto Rico corporation licensed as an Act 273-2012 international financial entity headquartered in San Juan Puerto Rico (“IFEB”), which IFEB Shares total approximately 57.1% of the outstanding Class A Common Stock of IFEB. The purchase price of the IFEB Shares was $6,400,000, which amount was paid to the Sellers on April 1, 2021.

IFEB was incorporated in 2017 as a corporation under the laws of the Commonwealth of Puerto Rico and received its international financial entity license on June 18, 2017 from the Office of the Commissioner of Financial Institutions of Puerto Rico, in Spanish, “Oficina del Comisionado de Instituciones Financieras” or “OCIF”, as license #51. As a result, IFEB is regulated by OCIF, and intends to update its application to establish a Fedwire account with the Federal Reserve Bank, New York (“FRB”). IFEB conducts its business activities out of its head office in Puerto Rico at 268 Ponce de Leon Ave., in San Juan.


Notwithstanding the terms of the Bill of the Sale, and the payment by the Company of the aggregate purchase price pursuant thereto, the transfer of the IFEB Shares to the Company and the Company’s acquisition of control of IFEB is subject to review of the Company’s financial viability, as well as other matters, by OCIF, and as such, the Company has filed a formal change of control application which must be approved before taking ownership and control of the IFEB Shares. The Company anticipates completing the acquisition of the IFEB Shares by approximately the end of June 2021.

On May 6, 2021, in anticipation of the acquisition of the IFEB Shares, and control of IFEB, the Company and IFEB entered into a Preferred Stock Exchange Agreement, which was amended by a First Amendment to Preferred Stock Exchange Agreement entered into May 10, 2021 and effective May 6, 2021 (as amended by the first amendment, the “Preferred Exchange Agreement”), pursuant to which the Company agreed to exchange 1,950,000 shares of the Company’s restricted common stock (the “Monaker Shares”) for 5,850 shares of cumulative, non-compounding, non-voting, non-convertible, perpetual Series A preferred shares of IFEB (the “IFEB Preferred Shares”).

The IFEB Preferred Shares will have a coupon of 2% per annum, payable in quarterly installments in arrears. The IFEB Preferred Shares will be redeemable by the Company; however, IFEB may, by the vote of the holders of a majority of its outstanding common stock, call and redeem the IFEB Preferred Shares in exchange for the Monaker Shares, plus accrued interest on the IFEB Preferred Shares at the time of any such redemption; and upon a Change of Control (defined below), the Company may cause IFEB to repurchase the IFEB Preferred Shares in exchange for the Monaker Shares, plus accrued interest at the time of any such Change of Control. “Change of Control” means the sale of all or substantially all the assets of IFEB; any merger, consolidation or acquisition of IFEB with, by or into another corporation, entity or person; or any change in the ownership of more than fifty percent (50%) of IFEB’s voting securities or the economic rights of such IFEB’s securities.

The closing of the transactions contemplated by the Preferred Exchange Agreement, including the issuance of the Monaker Shares and IFEB Preferred Shares, are subject to various closing conditions, including, but not limited to IFEB receiving approval from OCIF to issue preferred stock (including the Series A preferred shares), and the filing of a formal designation of the Series A preferred stock by IFEB with the Secretary of State of Puerto Rico. As such, the transactions contemplated by the Preferred Exchange Agreement may not close on a timely basis, if at all. If not closed by June 30, 2021, the Preferred Exchange Agreement can be terminated by either party with written notice to the other.

2021 Equity Incentive Plan

On April 7, 2021, stockholders approved the adoption of the Company’s 2021 Equity Incentive Plan (the “2021 Plan”), which is intended to secure for the Company and its affiliates the benefits arising from ownership of the Company’s common stock by the employees, officers, directors and consultants of the company and its affiliates, all of whom are and will be responsible for the Company’s future growth. The 2021 Plan is designed to help attract and retain for the Company and its affiliates personnel of superior ability for positions of exceptional responsibility, to reward employees, officers, directors and consultants for their services and to motivate such individuals through added incentives to further contribute to the success of the Company and its affiliates. Awards under the Plan may be made to an eligible person in the form of (i) incentive stock options (to eligible employees only); (ii) nonqualified stock options; (iii) restricted stock; (iv) stock awards; (v) performance shares; or (vi) any combination of the foregoing. The shares eligible for future awards under the 2021 will be equal (i) 15% of the Company’s total outstanding shares of common stock of the Company outstanding immediately after the closing of the HotPlay Share Exchange and conversion of the Axion preferred stock, and (ii) an annual increase on April 1st of each calendar year, beginning in 2022 and ending in 2030, in each case subject to the approval of the board of directors or the compensation committee of the Company on or prior to the applicable date, equal to the lesser of (A) 5% of the total shares of common stock of the Company outstanding on the last day of the immediately preceding fiscal year; (B) 5,000,000 shares of common stock; and (C) such smaller number of shares as determined by the board of directors or Compensation Committee (the “Share Limit”), also known as an “evergreen” provision.


Warrant Grants

On or around March 19, 2021 and March 22, 2021, the Company issued warrants to purchase an aggregate of 160,000 shares of common stock to seven warrant holders (all unrelated third parties) in consideration for the immediate exercise of newly granted warrants. The warrants replaced prior warrants which had expired in 2020 (which had exercise prices from between $3.75 and $5.00 per share) and had an exercise price of $2.00 per share and an expiration date on March 31, 2021 (the “New Warrants”). Those warrants were subsequently exercised for cash on or around March 31, 2021, and the Company received cash of $320,000 in connection with such exercises. The 160,000 shares of common stock issuable upon exercise thereof were issued on or around April 1, 2021. The Company has agreed to register the shares of common stock issuable upon exercise of the warrants in the future.

Warrant Exchanges

On or around March 19, 2021 and March 22, 2021, the Company exchanged warrants to purchase an aggregate of 51,900 shares of common stock held by two of the same warrant holders who were granted New Warrants, which had an exercise price of $5.13 per share and an expiration date of July 30, 2022, for new warrants had an exercise price of $2.00 per share and an expiration date on March 31, 2021 (the “Exchanged Warrants”). Those warrants were subsequently exercised for cash on or around March 31, 2021, and the Company received cash of $103,800 in connection with such exercises. The 51,900 shares of common stock issuable upon exercise thereof were issued on or around April 1, 2021. The Company has agreed to register the shares of common stock issuable upon exercise of the warrants in the future.

Director Compensation and Resignations

On April 7, 2021, each of Mr. Pasquale “Pat” LaVecchia, Mr. Doug Checkeris, Mr. Rupert Duchesne, Mr. Robert “Jamie” Mendola, Jr. and Ms. Alexandra C. Zubko, each then members of the board of directors of the Company, provided letters of resignation to the Company, resigning as directors (and from any other positions they hold with the Company), with such resignations effective automatically as of the closing of the HotPlay Exchange Agreement.

Such resignations were solely in connection with the required terms and conditions of the HotPlay Exchange Agreement, which requires that the board of directors of the Company at the closing thereof increase to nine members, with four appointed by HotPlay, two appointed by Monaker, and three appointed mutually by Monaker and HotPlay.

Also on April 7, 2021, the board of directors of the Company ratified the current compensation payable to members of the board of directors, which provides that each non-executive member of the Board be paid (a) compensation of 20,000 shares per year; (b) compensation of 5,000 shares per year, if they are the chairperson of any committee of the board of directors; and (c) compensation of 10,000 shares per year, to the Chairman of the Board (collectively, the “Board Compensation Terms”), except that all shares due to the Directors serving as of March 1, 2021, for the fiscal year ending February 28, 2022, were agreed to be issued up front and to be fully-vested/earned on the date of grant, instead of vesting over time, as previously awarded. In total, an aggregate of 165,000 shares of common stock were issued to the non-executive directors on April 8, 2021 for compensation for fiscal 2022 (such shares, the “Fiscal 2022 Board Compensation Shares”). The Fiscal 2022 Board Compensation Shares were issued under the Company’s Amended and Restated 2017 Equity Incentive Plan (the “Plan”).

On April 7, 2021, the Company entered into a Lock-Up Agreement with each of the non-executive members of the board of directors. Pursuant to the Lock-Up Agreements, each non-executive director agreed not to transfer, sell, pledge or assign any of their applicable Fiscal 2022 Board Compensation Shares until March 1, 2022.


William Kerby Bonus

On April 7, 2021, the board of directors of the Company, consistent with the employment agreement of Mr. William Kerby, the Chief Executive Officer of the Company, which provides for Mr. Kerby to receive a base salary of $400,000 per year, and an annual bonus payable at the discretion of the board of directors, of up to 100% of his base salary (50% based on meeting short term goals and 50% based on meeting long-term goals), and other bonuses which may be granted from time to time in the discretion of the board of directors, agreed to award Mr. Kerby a discretionary bonus for fiscal 2021 of $400,000, which is payable in cash or shares of common stock, at Mr. Kerby’s option, under the Plan, with a conversion price of $3.02 per share, the closing sales price of the Company’s common stock on the date the board of directors approved such bonus. If Mr. Kerby exercises his right to receive the entire bonus in shares of common stock, he would be due 132,450 shares of common stock.

May 2021 Underwritten Offering

On May 13, 2021, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with Kingswood Capital Markets, division of Benchmark Investments, Inc. (“Kingswood”), as representatives of the underwriters name therein (the “Underwriters”), pursuant to which the Company agreed to sell to the Underwriters in a firm commitment underwritten public offering (the “Offering”) an aggregate of 3,230,000 shares of the Company’s common stock at a public offering price of $2.50 per share. The Company also granted the underwriters a 45-day option to purchase up to an additional 484,500 shares of common stock to cover over-allotments, if any, which over-allotment option was exercised in full. The Offering (including the sale of the over-allotment shares) closed on May 18, 2020.

Kingswood acted as sole book-running managers for the Offering. The Company paid the Underwriters a cash fee equal to 6% of the aggregate gross proceeds received by the Company in connection with the Offering, paid the Underwriters a non-accountable expense allowance equal to 1% of the aggregate gross proceeds received by the Company in connection with the Offering, and reimbursed certain expenses of the Underwriters.

The net proceeds to the Company from the Offering, after deducting the underwriting discounts and commissions and Offering expenses, were approximately $8.5 million. The Company intends to use the net proceeds from the Offering to repay approximately $4.2 million owed to Streeterville, provide capital to IFEB in advance of the closing of the acquisition of control of IFEB (which acquisition is pending, subject to closing conditions, and may not be completely timely, if at all), for general corporate purposes and working capital or for other purposes that the board of directors, in their good faith, deems to be in the best interest of the Company. We may also use all or a portion of the remaining net proceeds from this offering (after the payments described above) to fund possible investments in, or acquisitions of, complementary businesses, technologies or products; however, we currently have no definitive agreements or commitments with respect to any investment or acquisition.

Pursuant to the Underwriting Agreement, the Company agreed, subject to certain exceptions, not to offer, issue or sell any shares of Common Stock or securities convertible into or exercisable or exchangeable for shares of Common Stock for a period of 45 days following the Offering, without the prior written consent of Kingswood.

In connection with the Offering, each of our officers and directors agreed, subject to certain exceptions, not to offer, issue, sell, contract to sell, encumber, grant any option for the sale of or otherwise dispose of any shares of our Common Stock or other securities convertible into or exercisable or exchangeable for shares of our Common Stock for a period of 45 days after the Offering is completed, without the prior written consent of Kingswood.

Streeterville Waiver and Funding

Effective on May 26, 2021, Streeterville agreed to waive the requirement that we use 20% of the proceeds from our May 2021 underwritten offering to repay amounts owed under the November 2020 Streeterville Note, contingent upon our payment of 20% of the proceeds from our May 2021 underwritten offering towards the balance of the March 2021 Streeterville Note.

We made a required monthly redemption payment of $1,250,000 to Streeterville under the November 2020 Streeterville Note on May 26, 2021, with funds obtained pursuant to the May 2021 underwritten offering.


We made a required Equity Payment of $1,857,250 to Streeterville under the March 2021 Streeterville Note on May 26, 2021, with funds raised through the May 2021 underwritten offering, which represented approximately 20% of the funds raised in such offering.

Also on May 26, 2021, Streeterville funded the March 2021 Investor Note (in the amount of $1.5 million) in full.

On June 1, 2021, Streeterville agreed to defer 50% of the April 2021 Note Increase which was otherwise to occur due to the Company’s failure to timely meet all of the November 2020 Note Transaction Conditions. As such, a total of $506,085 has been capitalized into the outstanding balance of the November 2020 Streeterville Note effective as of April 30, 2021, and the remaining $506,085 of the April 2021 Note Increase will only be added to the balance of the November 2020 Streeterville Note if the Company fails to meetrepay the November 2020 Transaction Conditions by June 30, 2021. Separately, iffirst note in full on or before its maturity date, then the Company does not meetsecond note will automatically become immediately due and payable. Both notes are unsecured and accrue interest at a rate of 18% per annum.

Other matters

In April 2022, the March 2021 Note Transaction Conditions by June 30, 2021,Board of directors has approved consideration of potential sale of certain businesses.

Subsequent information about acquisition of IP Fighter base, TokenIQ, GoPlay and GoPay are disclosed in the March 2021 Streeterville Note will be subject to the June 2021 Note Increase.respective notes.


Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

 

None.

Item 9A. Controls and Procedures

 

Disclosure Controls and Procedures

The Company maintains a set of disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) designed to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and is accumulated and communicated to the Company’s management, including the ChiefPrincipal Executive Officer (Ms. Boonyawattanapisut, our Co-Chief Executive Officer) and our Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In accordance with Rule 13a-15(b) of the Exchange Act, as of the end of the period covered by this Annual Report on Form 10-K,report, an evaluation was carried out under the supervision and with the participation of the Company’s management, including its ChiefPrincipal Executive Officer and Chief Financial Officer, of the effectiveness of its disclosure controls and procedures. Based on that evaluation, the Company’s ChiefPrincipal Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures, as of February 28, 2021,2022, the end of the period covered by this Annual Report on Form 10-K,Company’s 2022 fiscal year, were effective to provide reasonable assurance that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and is accumulated and communicated to the Company’s management, including the ChiefPrincipal Executive Officer (Ms. Boonyawattanapisut our Co-Chief Executive Officer) and our Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

 

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act). Internal control over financial reporting is a process designed by, or under the supervision of, the issuer’s principal executive and principal financial officers, or persons performing similar functions, and effected by the issuer’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that our degree of compliance with the policies or procedures may deteriorate.

 

Management assessed the effectiveness of the Company’s internal controls over financial reporting as of February 28, 2021,2022, based on the framework in Internal Control—Integrated Framework (COSO 2013)(“COSO 2013”) issued by the Committee of Sponsoring Organization of the Treadway Commission. On the basis of that assessment, management determined that our internal controls over financial reporting were effective as of that date.

 

Changes in Internal Control over Financial Reporting

The Company implemented the new accounting system named Sage Intacct during the first and second quarterAs of fiscal 2021. We hired three additional personnel for greater segregation of duties. ThereFebruary 28, 2022, there were no other changes in our internal control over financial reporting during the year ended February 28, 2021 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 


Limitations on the Effectiveness of Controls

Our disclosure controls and procedures and internal control over financial reporting are designed to provide reasonable assurance of achieving their objectives as specified above. Management does not expect, however, that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all error and fraud. Any control system, no matter how well designed and operated, is based upon certain assumptions and can provide only reasonable, not absolute, assurance that its objectives will be met. Further, 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, within the Company have been detected.

Item 9B. Other Information

None.

 

None.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Not applicable.


PART III

Item 10. Directors, Executive Officers, and Corporate Governance

Directors and Executive Officers

The following table and biographical summaries set forth information, including principal occupation and business experience for at least the last five years, about our current directors and executive officers. The terms of all the directors, as identified below, will run until their successors are elected and qualified, or untilsubject to their earlier resignation or removal.

 

 

Name

 

 

Age

 

 

Position

 

Officer and/or

Director Since

William Kerby 63 Chief Executive Officer and Vice-Chairman 2008
Sirapop ‘Kent’ Taepakdee 58 Controller, Vice President of Finance, Chief Financial Officer, Treasurer and Secretary 2019
Tim Sikora 47 Chief Operating Officer and the Chief Information Officer 2020
Donald P. Monaco 68 Chairman 2012
Pat LaVecchia 54 Director 2011
Doug Checkeris 65 Director 2012
Simon Orange 54 Director 2017
Rupert Duchesne 61 Director 2019
Robert “Jamie” Mendola 44 Director 2019
Alexandra C. Zubko 43 Director 2019
Name Age Position 

Officer and/or

Director Since

Nithinan Boonyawattanapisut 38 Co-Chief Executive Officer NextPlay and Director 2021
William Kerby 64 Co-Chief Executive Officer and Director 2008
Sirapop ‘Kent’ Taepakdee 59 Chief Financial Officer, Treasurer and Secretary 2019
Andrew Greaves 57 Chief Operating Officer 2021
Mark Vange 52 Chief Technology Officer 2021
Tim Sikora 48 Chief Information Officer 2020
J. Todd Bonner 55 Chairman of the Board 2021
Donald P. Monaco 69 Director 2012
Athid Nanthawaroon 40 Director 2021
Komson Kaewkham 40 Director 2021
Yoshihiro Obata 61 Director 2021
Carmen Diges 52 Director 2021
Farooq Moosa 52 Director 2021
Edward Terrence Gardner, Jr. 56 Director 2021

Information about our Executive Officers:Officers:

William Kerby -Nithinan Boonyawattanapisut – Co-Chief Executive Officer NextPlay and Director

Ms. Boonyawattanapisut has served as a director on our board of directors (the “Board”) and as Co-Chief Executive Officer of the Company since the Company’s acquisition of HotPlay on June 30, 2021. Ms. Boonyawattanapisut is a serial entrepreneur with 16+ years of extensive management experience, specialized in tech startups and video games business. Ms. Boonyawattanapisut was the Co-Founder and Managing Director of HotPlay, an in-game advertising platform, and HotPlay Thailand, from March 2020 until June 30, 2021. Since April 2017, Ms. Boonyawattanapisut has been serving as the Managing Director of Axion Games, Inc., an online video gaming and technology company, and leads the content investment arm of Axion Games, Inc. She has also been serving as the Chief Executive Officer and Vice-ChairmanChairperson of the Board at True Axion Interactive, a game studio formed via a joint venture with True Corporation, a major Thai telecommunication company, since she co-founded it in March 2017. In June 2014, Ms. Boonyawattanapisut founded HotNow (Thailand) Company Limited, a hyper-local promotion discovery platform and has served as the Chief Executive Officer since its inception. In March 2012, she co-founded Red Anchor Trading Corporation, an incubator for developing applications and predictive algorithms based on crowdsourced data. In July 2006, Ms. Boonyawattanapisut co-founded the independent AAA games studio, Epic Games China, which later consolidated as Axion Games Limited in 2014, and where Ms. Boonyawattanapisut currently serves as Director. Ms. Boonyawattanapisut graduated from Mahidol University with a Bachelor of Directors Business Administration in International Business.

William Kerby – Co-Chief Executive Officer and Director

William Kerby is the Founder, Vice-Chairman,founder, Co-Chief Executive Officer, and CEOa director of Monaker Group, Inc.the Company. Mr. Kerby has over two decades of experiences in the travel and media industries, and approximately a decade of experience in the financial industry. From July 2008 to present, he has been the architect of the MonakerNextPlay model, overseeing the development and operations of the Company’s Travel, Real Estate and Television Media divisions.divisions of the Company. In October 2012, Monakerthe Company transferred its real estate assets into a public company - Verus International, Inc., formerly Realbiz Media Group, Inc., where Mr. Kerby served as CEOChief Executive Officer until August 2015 and on the Boardboard of directors until April of 2016. In July 2015, the decision was made to separate the Television and Real Estate operations from Monakerthe Company, thereby allowing management to focus all efforts on the development of its travel operations.Travel division. From April 2002 to July 2008, Mr. Kerby served as the CEOChief Executive Officer of various media and travel entities that ultimately became part of Extraordinary Vacations Group. Operations included Cruise & Vacation Shoppes, Maupintour Extraordinary Vacations, Attaché Travel and the Travel Magazine - a TV series of 160 travel shows. From February 1999 to April 2002, Mr. Kerby founded and managed Travelbyus, a publicly- traded company on the TSX and NASDNasdaq Small Cap.Cap Market. The launch included an intellectually patented travel model that utilized technology-based marketing to promote its travel services and products. Mr. Kerby negotiated the acquisition and financing of 21 companies encompassing multiple tour operators, 2,100 travel agencies, media that included print, television, outdoor billboard and wireless applications and leading-edge technology in order to build and complete the Travelbyus model. The company had over 500 employees, gross revenues exceeding $3 billion and a Market Cap over $900 million. From June 1989 to January 1999, Mr. Kerby founded and grew Leisure Canada – a company that included the Master Franchise for Thrifty Car Rental British Columbia, TravelPlus (a nationwide Travel Agency), Bluebird Holidays (an international tour company with operations in the U.S., Canada, Great Brittan, France, South Africa and the South Pacific) and Canadian Traveler (a travel magazine). Leisure Canada was acquired in May 1998 by Wilton Properties, a Canadian company developing hotel and resort properties in Cuba. From October 1980 through June 1989, Mr. Kerby worked in the financial industry as an investment advisor. Mr. Mr. Kerby also serves as a member of the Board of Directors of Longroot Limited, a Cayman Islands company, which the Company own 75% of, through its ownership of Longroot, Inc., a Delaware corporation.Cayman. Mr. Kerby graduated from York University in May 1980 with a Specialized Honors Economics degree.

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Director Qualifications:

 

The Company believes that Mr. Kerby’s experience in the travel and leisure industry allows him to contribute business expertise and qualifies him to be a member of the Board.

Sirapop ‘Kent’ Taepakdee - Chief Financial Officer, Treasurer and Secretary

Mr. Taepakdee has served as the Chief Financial Officer of the Company since December 2020. Mr. Taepakdee has served as the Controller of the Company since July 2019. On October 9, 2019, the board of directorsBoard appointed Mr. Taepakdee as the principal financial and accounting officer of the Company. Mr. Taepakdee has served as the Vice President of Finance, Treasurer, and Secretary of the Company since February 1, 2020. Also, from February 1, 2020 andto December 14, 2020, Mr. Taepakdee served as the acting Chief Financial Officer from this time until December 2020 when he becameof the Company, being appointed the Chief Financial Officer.Officer of the Company on December 14, 2020. Mr. Taepakdee has worked in accounting and finance for more than 32 years, garnering diverse experiences across several industries including hospitality, car rental, office product retail, manufacturer software, government, and an attorney office. His strong process improvement skills helped many companies increase productivities and decrease costs. From February 2012 to January 2018, Mr. Taepakdee served as the Controller of INCEPTRAInceptra LLC and JTH Holdings LLC, locatedFlorida. Kent worked closely with IT teams to implement the Oracle system at Office Depot during the “Project Simplify” in Weston, Florida. From September 2007 to December 2011, Mr. Taepakdee served as a Senior Accountant Fixed Asset Tax/Assistant Manager, for Office Depot’s international headquarters located in Boca Raton, Florida. Prior to working for2009. At Office Depot, Mr. Taepakdee served as Controlleralso led the team of Hilda Flack Interiors, in Palm Beach Gardens, Florida, from January 2005accountants and worked with the auditors to August 2007. From 2000 to 2004, Mr. Taepakdee served as a Senior Accountant – Financial Reporting and Analysis, withdo the “Fixed Asset Cost Segregation” project, which saved the company millions. During his employment at Vanguard Car Rental USA Inc.Inc (Alamo and National Car Rental), after the September 11, 2001 (9/11) event, he involved and worked with the recovery team (appointed by the court) to perform due diligence after the company filed for bankruptcy, and the company got out of the bankruptcy in early 2004. During 1997 – 2000, he served as the Assistant Food & Beverage Cost Controller at the Boca Raton Resort & Club in Boca Raton, Florida.Florida, and led the team to implement the F&B inventory system (two F&B warehouses). Mr. Taepakdee also served as the Chief Financial Officer at the Bangkok Naval Base (Royal Thai Navy) from 1986 to 1996. Mr. Taepakdee also servesserved as a member of the Board of Directors of Next Fintech Holdings Inc (fka: Longroot Limited, a Cayman Islands company, which the Company owns 75% of, through its ownership of Longroot, Inc., a Delaware corporation.Inc). Mr. Taepakdee received an MBA (with a specialization in Finance), from Ramkhamhaeng University, in Bangkok, Thailand and a BBA in Accounting (First Class Honors / Valedictorian), from Krirk University, in Bangkok, Thailand.

 

Tim SikoraAndrew Greaves - Chief Operating Officer

Mr. Greaves was appointed as the Company’s Chief Operating Officer on August 19, 2021. Mr. Greaves brings to NextPlay more than 15 years of award-winning achievement and senior level experience leading gaming, eSports and digital media companies. Mr. Greaves has served as Managing Director of GLM Consulting LTD, a technology consulting services company that he owns, since May 2007. He previously co-founded Promethean TV, an award-winning interactive video overlay service for digital media, where he served as chief operating officer from November 2016 to June 2021 and has served as a director since March 2017. He oversaw the company’s growth from inception in 2016 to generating multi-millions in annual revenue. Prior to Promethean, from September 2013 through November 2016, Mr. Greaves served as vice president of product and technology at Azubu.tv, an eSports streaming platform, where he led the growth in monthly active users from 1 million to 20 million. He also oversaw the European expansion of the competitive eSports platform, Virgin Gaming.com. He earlier served in executive positions at Electronic Arts (NYSE: EA), initially as a studio program director in Europe where he was responsible for the localized adoption of EA technologies. Then as senior producer for the EA SPORTS FIFA team, he oversaw the online EA Sports Football portal that included five FIFA titles, including the BAFTA award-winning FIFA10. Mr. Greaves received his Bachelor of Science degree from Sheffield City Polytechnic in Sheffield, England.


Mark Vange - Chief Technology Officer

Mr. Vange has served as Chief Technology Officer of the Company since the Company’s acquisition of HotPlay on June 30, 2021, prior to which he served as Chief Technology Officer of HotPlay Thailand and HotNow (Thailand) Company Limited, a hyper-local promotion discovery platform, positions he held since March 2020 and June 2020, respectively. Mr. Vange has over three decades of experience as a technologist and entrepreneur. In May 2017, he founded Token IQ Inc., a technology company that addresses issues in the tokenization space such as compliance with existing securities laws, cross border issues, token price volatility, post offering transparency, high transactional costs, and scalability, where he has served as Chief Executive Officer since its inception. In May 2016, Mr. Vange founded Fighter Base Publishing Inc, developer of Fighter base, a massively-multiplayer combat flight game, where he has served as Chief Executive Officer since its inception. Mr. Vange is also the Co-Founder of Tech Round LLC, a company that provides specialty development services to many of the world’s largest publishers, which formed in January 2015. In June 2005, Mr. Vange Founded and served as Executive Vice President of Mobile Post Productions Inc, a company that enabled video game publishers to enter the mobile game space at scale. Mobile Post Productions Inc was later acquired by Electronic Arts Inc in April 2011, and Mr. Vange served as the Chief Technology Officer of Electronic Arts Interactive (NYSE: EA) from the date of acquisition until June 2012. To date, Mr. Vange has over 100 patents for technologies that defined industries such as 3D gaming, massively multiplayer games, data transmission over the Internet, large-scale data processing, and mobile communications.

Tim Sikora - Chief Information Officer

Mr. Sikora joined the Company as Chief Information Officer (non-executive) in October 2019, and was promoted to Chief Operating Officer and Chief Information Officer (executive) on February 1, 2020, wherein which roles he is responsible for managing all of the Company’s information technology (IT)(“IT”) platforms, including the software development activities for the Company’s MonakerNextPlay Booking Engine (MBE), a customizable, instant-booking platform for alternative lodging rentals NextTrip, the Company’s Travel Management Solution for small to medium-sized business, and Maupintour, an innovative leader in personalized travel experiences. Mr. Sikora also leads Monaker’sthe Company’s commercial sales and technical teams. Mr. Sikora has over two decades of experience in the information technology and travel industries. He served as director of North America Sales at The Boeing Company, the world’s largest aerospace company, prior to joining the Company, from May 2013 to October 2019. Prior to working with Boeing, he managed and led the expansion of two IT services companies: Peak 10, a leading data center and cloud services company, where he served as Director Information Technology Service Delivery from July 2012 to May 2013, and CIBER, Inc., a global information technology infrastructure services provider, where he served as Information Technology Infrastructure Service Delivery Manager from November 2010 to July 2012. Prior to that, from November 2007 to November 2010, Mr. Sikora served as director of Information Technology End User Services at US Airways, Inc. While there, Mr. Sikora led the airline’s integration of IT end-user platforms following its merger with America West and was responsible for governing IT resource planning, budgeting, and operational management for end-user services. Prior to joining US Airways, Mr. Sikora served as VP of Airline Operations and Chief Information Officer at Caribbean Sun Airlines Holdings (September 2005 to November 2007), where he directed all IT and airline resource planning, budgeting and operational initiatives. Prior to that, Mr. Sikora served as manager of Information technology at DHL Airways, a $500 million cargo airline where he directed the Information Technology group, a provider of contract aircraft services to DHL Worldwide Express. Mr. Sikora also serves as a member of the Board of Directors of Longroot Limited, a Cayman Islands company, which the Company owns 75% of, through its ownership of Longroot, Inc., a Delaware corporation. Mr. Sikora has also held several other software development positions, including at Midwest Express Airlines. Mr. Sikora also serves as a member of the Board of Directors of Longroot Cayman. Mr. Sikora received a Bachelor’s of Science in Business Administration (Magna Cum Laude) and a Master’s of Science in Leadership, from Embry-Riddle Aeronautical University.

University.


Information about our Directors:

J. Todd Bonner – Chairman

 

Mr. Bonner has served as Chairman of the Board since the Company’s acquisition of HotPlay on June 30, 2021 (serving as Co-Chairman of the Board from June 2021 to December 2021). Mr. Bonner co-founded HotPlay, an in-game advertising platform, and HotPlay Thailand in March 2020, and is currently the Chairman of HotPlay Thailand. He is also a member of the Board of Directors of Axion Ventures Inc., an online video gaming and technology company listed on the TSX Venture Exchange, which he co-founded in May 2016. During that time, he started True Axion Interactive, a game studio formed via a joint venture with True Corporation, a major Thai telecommunication company, in April 2017. In March 2012, he co-founded Red Anchor Trading Corporation as an incubator for developing applications and predictive algorithms based on crowdsourced data. Mr. Bonner founded independent AAA games studio Axion games, which was formerly Epic Games China, in 2006. In July 2003, Mr. Bonner founded Northstar Pacific Partners, an Indonesia Merchant Bank, and served as Partner until September 2005. Northstar Pacific Partners has since grown into a $2.2 billion private equity fund. Prior to that, Mr. Bonner co-founded Pacific Century CyberWorks in June 2000, where he served as the company’s Japan based CEO from March 2001 to September 2003. During that time, he raised $2.4 billion to acquire Hong Kong Telecom, which remains one of the largest acquisitions in Asian history. Mr. Bonner also serves as a member of the Board of Directors of Longroot Cayman. Mr. Bonner graduated from Stanford University in June 1989 with a degree in Biology and Biomedical Sciences.


Donald P. Monaco - Chairman– Director

 

Donald P.Mr. Monaco has served as a member of the board of directorsBoard since August 2011 and served as Chairman of the Board sincefrom August 2018.2018 to December 2021 (serving as Co-Chairman of the Board from June 2021 to December 2021). Mr. Monaco has almost three decades of experience as an international information technology and business management consultant. Mr. Monaco served on the Verus International, Inc., formerly RealBiz Media Group, Inc., board of directors from October 2012 until April 2016, serving as Chairmanchairman of the Boardboard from August 2015.2015 to April 2016. Mr. Monaco has served on the board of directors of Enderby Entertainment Inc. since March 2018, serving as its Chief Financial Officer since January 2020. Mr. Monaco is the founder and owner of Monaco Air Duluth, LLC, a full service, fixed-base operator aviation services business at Duluth International Airport in Duluth, Minnesota serving airline, military, and general aviation customers since November 2005. Mr. Monaco has been appointed and reappointed by Minnesota Governors since 2009 to serve as a Commissioner of the Metropolitan Airports Commission in Minneapolis-St. Paul, Minnesota and currently serves as Chairman of the Operations, Finance and Administration Committee. Mr. Monaco was a Director at Republic Bank in Duluth, Minnesota between May 2015 until October 2019 and served as Vice Chairman of the Board, and subsequently servesserved on the Bell Bank Twin-Ports Market Advisory Board. Mr. Monaco is the President and Chairman of the Monaco Air Foundation, Treasurer of Honor Flight Northland, Treasurer of the Duluth Aviation Institute, and a member of the Duluth Chamber of Commerce Military Affairs Committee. Mr. Monaco spent over 18 years as a Partner and Senior Executive of the 28 years he served as an international information technology and business management consultant with Accenture in Chicago, Illinois. Mr. Monaco holds B.S.Bachelor’s. and M.S.Master’s degrees in Computer Science Engineering from Northwestern University.

 

Athid Nanthawaroon – Director Qualifications:

 

We selected Mr. Monaco to serve on our Board because he brings a strong business background to the Company, and adds significant strategic, business and financial experience. Mr. Monaco’s business background provides him with a broad understanding of the issues facing us, the financial markets and the financing opportunities available to us.

Pasquale “Pat” LaVecchia - Director

Pasquale “Pat” LaVecchiaNanthawaroon has served as a member of the boardBoard since the Company’s acquisition of directorsHotPlay on June 30, 2021. Mr. Nanthawaroon co-founded and served as a director of HotPlay and HotPlay Thailand, from the time the companies were founded in March 2020 until June 30, 2021. He also served as the President of HotPlay Thailand since 2011.its founding. Since January 2020, Mr. LaVecchiaNanthawaroon has served as a director and Chief Executive Officer of Tree Roots Entertainment Group, a joint venture between the Thai property developer, Magnolia Quality Development Corporation Limited, and the IP management and investment company, T&B Media Global (Thailand) Company Limited, where he is the Co-Chairmanbuilding an ecosystem bridging real estate and CEOentertainment with technology. Since November 2014, Mr. Nanthawaroon has served as Senior Vice President of Oasis Pro Markets, a FINRA member broker-dealer.  Previously he had been a founding principal and Managing Member of LaVecchia Capital LLCCorporate Finance at DTGO Corporation Limited (“LaVecchia CapitalDTGO”), a broker dealer, since 2009diversified business group established in 1993 that integrates social contribution with business success. DTGO’s largest investment portfolio is Magnolia Quality Development Corporation Limited, which holds real estate assets including condominiums, mixed-use developments and “theme” developments, and maintains a total asset value of over approximately $5 billion. Mr. Nanthawaroon has over 25+ yearsa decade and a half of experience in the financial industry.investment strategy and fund raising across various industries. Mr. LaVecchia has built and run several major Wall Street groups and has extensive expertiseNanthawaroon holds a Bachelor’s degree in capital markets, including initial public offerings, secondary offerings, raising capital for private companies and PIPEs as well as playing the leading role in numerous mergers, acquisitions, private placements and high yield transactions. Prior to forming LaVecchia Capital, Mr. LaVecchia ran several groups at major firms including: Managing Director and Head of the Private Equity Placement Group at Bear, Stearns & Company (1994 to 1997); Group Head of Global Private Corporate Equity Placements at Credit Suisse First Boston (1997 to 2000); Managing Director and Group Head of the Private Finance and Sponsors Group at Legg Mason Wood Walker, Inc (2001 to 2003); co-founder and Managing Partner of Viant Group (2003-2005) and Managing Director and Head of Capital Markets at FTN Midwest Securities Corp. (2005 to 2007). Mr. LaVecchia received his B.A., magna cum laude (and elected to Phi Beta Kappa), from ClarkKasetsart University and an M.B.A.a Master’s degree in Commerce and Accountancy in Real Estate from The Wharton School of the University of Pennsylvania with a major in Finance and a concentration in Strategic Planning. In the past, Mr. LaVecchia has served on several public company boards, including as Vice Chairman of InfuSystems, Inc. (INFU). Mr. LaVecchia is also currently a managing partner of Sapphire Capital Management. Mr. LaVecchia also sits on several private company boards, advisory boards and non-profit boards. 

Director Qualifications:

The Company believes that Mr. LaVecchia’s investment banking and business experience allows him to contribute business and financing expertise and qualifies him to be a member of the Board.

Thammasat University.

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Komson Kaewkham – Director

 

Doug Checkeris - Director

Doug CheckerisMr. Kaewkham has served as a member of the boardBoard since the Company’s acquisition of directors since September 2012.HotPlay on June 30, 2021. Mr. Checkeris alsoKaewkham is the Legal Counsel and Senior Vice President of DTGO, a diversified business group that integrates social contribution with business success. He joined the organization’s property development subsidiary, Magnolia Quality Development Corporation Limited, in March 2011 as Division Manager. He then joined the Corporate Legal team of DTGO in April 2017 and was promoted to Senior Vice President in March 2019. During his time at the organization, Mr. Kaewkham has specialized in legal matters related to real estate project development, investment structures, mergers and acquisitions, and presently is in charge of risk management and compliance of DTP Global REITs Management limited, DTGO’s REIT management company. From April 2009 to March 2011, Mr. Kaewkham was a litigator at Blumenthal Ritcher & Sumet Limited’s Bangkok office and served as legal counsel and as a litigator at Siam ILC. Co., Ltd from March 2006 to March 2009. Mr. Kaewkham received his Notarial Service Attorney License from Lawyers Council under the Company’s Chief Marketing OfficerRoyal Patronage in Thailand in June 2010, and graduated from February 2012 to February 2014. Mr. Checkeris isAssumption University in May 2008 with a Senior Media and Advertising Executive with nearly three decadesMaster of hands-on managementLaw Program in all facets of interactive media. Mr. Checkeris’s work experience includes 14 years of service with Mediacom where he rose through the ranks to become the CEO for Mediacom North America, until recently headquartered in New York. With close to $18 billion in global billings, 4,600 employees, and 116 offices in 89 countries, Mediacom provides and specializes in business-building media solutions for some of the world’s largest, well-known advertisers. Previous to Mediacom, Mr. Checkeris started his career in a media company in Toronto, Canada, and was a partner when the company was acquired by Grey Worldwide and the WPP. Mr. Checkeris served on the Verus International, Inc., formerly RealBiz Media Group, Inc. board of directors from October 2012 until April 2016. Business Law.

 

Yoshihiro Obata – Director Qualifications:

 

We selected Mr. Checkeris to serve on our Board because he brings to the board extensive knowledge of the media industry. Having served in senior corporate positions in many media related companies, Mr. Checkeris has a vast knowledge of the industry.

Simon Orange - Director

Simon OrangeObata has served as a member of the Board since the Company’s acquisition of HotPlay on June 30, 2021. Mr. Obata is an independent Director of Axion Ventures, Inc. He has over three decades of experience with technology companies as a founder, software engineer, board member and senior executive. Most recently, Mr. Obata was a founding member, director and Chief Technology Officer of directors since January 2017. Mr. Orange iseAccess, an ADSL wholesale company, which acquired a 3G license in 2005 and successfully introduced LTE in 2012 (under the founding partnerEMOBILE brand). In 2013, after the acquisition of eAccess by Softbank, he moved to Equinix Japan and chairman of CorpAcq, a corporate acquisitions and investments company located in the United Kingdom. Mr. Orangehas served as the chairmanPresident and Chief Executive Officer of CorpAcq from 2006 to 2009 and from April 2014 to present. At CorpAcq, Mr. Orange is responsible for identifying and negotiating acquisitions in conjunction with its corporate finance partners, as well as overseeing strategic development, funding, and partnerships. Following a “buy and build” approach, CorpAcq maintains long-term investments in a diverse portfolio of successful businesses. Currently comprised of over 30 portfolio companies’, CorpAcq has been recognized as one of the fastest growing enterprises in the United Kingdom. Mr. Orange has been involved in funding and managing the growth of numerous business ventures, some which have been acquired by NASDAQ and London Stock Exchange listed companies.BizMobile Inc. since 2015.

 

Director Qualifications:


 

The Company believes that Mr. Orange’s experience in corporate acquisitions and financing will assist the Company and qualifies him to be

Carmen Diges – Director

Ms. Diges has served as a member of the Board.

Rupert Duchesne, C.M. - Director

Mr. Rupert Duchesne, C.M.,Board since the Company’s acquisition of HotPlay on June 30, 2021. Ms. Diges is a resident of Toronto, Canada, is an independent director,senior attorney, corporate and government advisor, and is currently the CEOinternational entrepreneur, with over two decades of Mattamy Ventures, part of Mattamy Asset Management. Heexperience across various public and private sectors. Since August 2014, Ms. Diges has served as Group Chief Executive andPrincipal at her own law firm, REVlaw. Ms. Diges has served as the General Counsel/Corporate Secretary of McEwen Mining Inc. (NYSE:MUX) since August 2015. From November 2011 through July 2014, Ms. Diges served as a directorPartner at the law firm of Aimia Inc (TSX:AIM), as the founding CEO,Miller Thomson LLP. Prior thereto, from June 2005May 2004 to May 2017. Through Mr. Duchesne’s stewardship Aimia grew from its carve-outOctober 2011, Ms. Diges served as a divisionPartner at the law firm of Air Canada in 2002, the initial public offeringMcMillan LLP. Ms. Diges currently serves as the Aeroplan Income Fund in 2005, conversion to corporate status as Groupe Aeroplan Inc. in 2008 and the re-branding of the Corporation as Aimia in 2011. Mr. Duchesne helped build Aimia into the world’s leading loyalty company with operations in 20 countries, more than 4,000 employees and many well-known brands such as Aeroplan, Nectar, Club Premier, and Air Miles Middle East. Previously, he joined Air Canada in 1996 as Vice-President of Marketing; he then served as Senior Vice President of International in 1999, and then Chief Integration Executive responsible for overseeing the integration of Air Canada and Canadian Airlines International. Prior to Air Canada, Mr. Duchesne served as Vice President and leader of the global Aviation Practice for Mercer Management Consulting (now Oliver Wyman) from 1994 to 1996. Earlier, Mr. Duchesne was an owner and director of LCB Consultants of London, England. He was previously a Director on the Boards of Mattamy Group Corporation, Alliance Atlantis and Dorel Industries. Mr. Duchesne isseveral private companies. Ms. Diges holds a Vice PresidentCFA Charter, a Master of the Board of Trustees of the Art Gallery of Ontario, and Vice Chair of the Board of the Luminato FestivalLaws (Tax) from Osgoode Hall Law School in Toronto, and was previously Chair of the Brain Canada Foundation. Mr. Duchesne earned a Bachelor of Science (Hons) degreeLaws from Dalhousie Law School in PharmacologyHalifax, as well as a Bachelor of Arts from the University of Leeds and an M.B.A. from the Manchester Business School, both in the United Kingdom. Mr. Duchesne was appointed as a Member of the Order of Canada in 2016.Toronto.

 


Farooq Moosa – Director Qualifications:

 

The Company believes that Mr. Duchesne’s significant experience with public companies, loyalty companies and general corporate matters makes him a strong addition to the Board.

Robert “Jamie” Mendola, Jr. - Director

Robert “Jamie” Mendola, Jr.Moosa has served as the Head of Strategy and Mergers and Acquisitions at Mercer Park LP, a U.S. family office, with a focus on cannabis since January 2019. Mr. Mendola has nearly 20 years of experience as a public and private equity investor and has significant experience in negotiating merger and acquisitions transactions and travel industry investments.

Prior to joining Mercer Park, from February 2014 to December 2018, Mr. Mendola served as the Founder and Chief Investment Officer of Pacific Grove Capital, a hedge fund focused primarily on investments in consumer, technology and payments. Prior to founding Pacific Grove in 2014, Mr. Mendola was a Partner at Scout Capital, from September 2009 to January 2014. He was a senior member of the firm’s InvestmentBoard since November 23, 2021. He currently serves as President, Chief Financial Officer and Risk Committeesa director of Avenir Senior Living Inc., a senior healthcare operating company that builds, designs, markets owns and helped to build Scout’s Palo Alto office. Previously, Mr. Mendola workedoperates luxury private-pay memory care communities and senior residences, which positions that he has held since February 2021. He also serves as a Principal of Watershed Asset Management, a private equity analyst (from July 2005 to January 2009), at JLL Partners, a private equity firm, as an analyst (September 2001 to July 2003)President and as an analyst in the investment banking program of J.P. Morgan Chase (July 1999 to August 2001).

Mr. Mendola graduated with a B.S. in Management, from Binghamton University in Binghamton, New York, in 1999 and earned his M.B.A. from Stanford’s Graduate School of Business in 2005.

Director Qualifications:

The Company believes that Mr. Mendola’s experience with mergers and acquisitions, private equity and public companies will be of significant use on the Board.

Alexandra C. Zubko - Director

Since November 2019, Ms. Zubko has served as the Chief Executive Officer of Troupe, an online group travel company. Ms. Zubko1285593 Ltd., a company that provides capital markets and financial services consulting services, which positions he has held since January 2021. Prior to that, Mr. Moosa served as the co-foundermanaging director at Echelon Wealth Partners and Artemis Investment Management, and as director of global investment banking at Scotiabank and held various positions, including president, Chief Executive Officer, and director, of Scotia Managed Companies Administration, a boardwholly owned subsidiary of Scotiabank. While at Scotia Managed Companies Administration, Mr. Moosa’s responsibilities included corporate governance, investment oversight, business risk management, corporate due diligence, and financial analysis. Prior to that, he served as VP of equity capital markets at BMO Capital Markets. Mr. Moosa holds an MBA from Wilfrid Laurier University and a Bachelor of Arts (Honours Standing) from Western University.

Terry Gardner – Director

Mr. Gardner has served as a member of Triptease, a $100 million enterprise value company in the Travel industry which provides SaaS-based digital tools designed to create a seamless booking journey for hotel guests, from April 2014 to September 2019 (also serving as General Sales Manager Americas (MayBoard since December 9, 2021. Mr. Gardner has over 25 years of capital markets, equity research, and investment management experience. From 2015 to May 2017); General Manager/Head of Strategic Accounts Customer Success (March 2017 to April 2018); and Chief Customer Officer (April 2018 to September 2019)). Ms. Zubkopresent, Mr. Gardner has served as the Vice President/Heada Partner of Global Strategy (from April 2012 to July 2013)C.J. Lawrence, LLC, an investment management boutique and Head of EMSA Strategy (July 2008 to April 2012) of InterContinental Hotels Group (IHG), a British multinational hospitality company. Prior to joining IHG, Ms. Zubko held positions with NBC Universal/General Electric in business development and with Goldman Sachs as a financial analyst. She also founded TripTips, an online social networking platform for sharing travel recommendations. Ms. Zubko received a Bachelor’s of Arts Degree in economics from Columbia Collegeregistered investment advisor based in New York New YorkCity, where he manages 50+ client accounts and chairs the firm’s Investment Committee. Mr. Gardner also serves as Chief Compliance Officer of C.J. Lawrence, LLC. Previously, he has held senior analytical and management roles at Deutsche Bank Securities, ITG, and Soleil Securities Group. Earlier, Mr. Gardner served as an MBA fromequity research analyst covering the Stanford Graduate School of Business in Palo Alto, California. Ms. Zubko received Six Sigma certification from GE’s Crotonville Leadership Instituteground transportation industry and was alsoranked as the recipient of the 2012 International Hotel Investment Forum (IHIF) Young Leader Award, one of the top awardsTop Stock Picker in his category in the travel industry.

Director Qualifications:

The Company believes that Ms. Zubko’s significant experience with online travel and the travel industryWall Street Journal’s All-Star Analyst survey. He holds a Bachelor of Arts in general will be of significant use on the Board.

Economics from St. Lawrence University.


We promote accountability for adherence to honest and ethical conduct; endeavor to provide full, fair, accurate, timely and understandable disclosure in reports and documents that we file with the SEC and in other public communications made by us; and strive to be compliant with applicable governmental laws, rules and regulations.

Board Leadership Structure

 

Our board of directors (our “Board”) has the responsibility for selecting our appropriate leadership structure. In making leadership structure determinations, the board of directors considers many factors, including the specific needs of our business and what is in the best interests of our stockholders. Our current leadership structure is comprised of a separate Chairman of the board of directorsBoard and Chieftwo Co-Chief Executive Officer (“CEO”).Officers. Mr. Donald P. MonacoBonner currently serves as Chairman of the Board and Ms. Boonyawattanapisut and Mr. William Kerby serveseach serve as CEO. Co-Chief Executive Officers of the Company.

The board of directorsBoard does not have a policy as to whether the Chairman should be an independent director, an affiliated director, or a member of management. Our board of directorsBoard believes that the Company’s current leadership structure is appropriate because it effectively allocates authority, responsibility, and oversight between management (the Company’s CEO,Co-Chief Executive Officers, Ms. Boonyawattanapisut and Mr. Kerby) and the members of our board of directors.Board. It does this by giving primary responsibility for the operational leadership and strategic direction of the Company to its CEO,Co-Chief Executive Officers, while enabling our Chairman to facilitate our board of directors’Board’s oversight of management, promote communication between management and our board of directors,Board, and support our board of directors’Board’s consideration of key governance matters. The board of directorsBoard believes that its programs for overseeing risk, as described below, would be effective under a variety of leadership frameworks and therefore do not materially affect its choice of structure.

 

Board’s Role in Risk OversightManagement

 

The Board has responsibility for the oversight of the Company’s risk management processes, while our management (or through the committees of the Board) is responsible for day-to-day management of risk. Effective risk oversight is an important priority of the board of directors.Board. Because risks are considered in virtually every business decision, the board of directorsBoard regularly discusses with management our major risk exposures, their potential impact on our business and the steps we take to manage them throughout the year, both generally or in connection with specific proposed actions. The board of directors’Board’s approach to risk oversight includes understanding the critical risks in the Company’s business and strategy, evaluating the Company’s risk management processes, allocating responsibilities for risk oversight, and fostering an appropriate culture of integrity and compliance with legal responsibilities. The directors exercise direct oversight of strategic risks to the Company (the Company’sCompany.


The Audit Committee of our Board reviews information regarding liquidity and operations, and oversees our management of financial risks. Periodically, the Audit Committee reviews our policies with respect to risk assessment, risk management, loss prevention and regulatory compliance. Oversight by the Audit Committee includes direct communication with our external auditors, and discussions with management regarding significant risk exposures and the actions management has taken to limit, monitor or control such exposures. The Compensation Committee is responsible for assessing whether any of our compensation policies or programs has the potential to encourage excessive risk-taking. The Nominating and Governance Committee reviews compliance with external and internal compliance with policies, procedures and practices consistent with our charter and bylaws. 

While each of our Board committees is responsible for evaluating certain risks and overseeing the management of such risks, the entire Board is regularly informed through committee reports and members of our management team about such risks. Matters of significant strategic risk are described in greater detail below (under “Committees of theconsidered by our Board of Directors”)).as a whole.

 

Family Relationships

 

NoneMr. Bonner, Chairman of our Board, is married to Ms. Boonyawattanapisut, our Co-Chief Executive Officer. Except for the foregoing relationship between Mr. Bonner and Ms. Boonyawattanapisut, none of our directors are related by blood, marriage, or adoption to any other director, executive officer, or other key employees.

 

Arrangements Between Officers and Directors

 

There is no arrangement or understanding between our current directors and executive officers and any other person pursuant to which any director or officer was or is to be selected as a director or officer, and there is no arrangement, plan or understanding as to whether non-management stockholders will exercise their voting rights to continue to elect the current board of directors. There are also no arrangements, agreements or understandings to our knowledge between non-management stockholders that may directly or indirectly participate in or influence the management of our affairs except as discussed below. 

On or around February 22, 2021, eachRed Anchor Trading Corporation, T&B Media Global (Thailand) Company Limited, Tree Roots Entertainment Group Co., Ltd. and Dees Supreme Company Limited (collectively, the “HotPlay Stockholders”), representing all of the stockholders of HotPlay, Stockholders, and Ms. Nithinan Boonyawattanapisut, Mr. J. Todd Bonner, Mr. Athid Nanthawaroon and Mr. Komson Kaewkham, each nominees for appointment to the Monaker board of directors at the closing of the HotPlay Exchange Agreement,nominees, entered into a Voting Agreement with Mr. William Kerby the Chief Executive Officer and director of Monaker and Mr. Donald P. Monaco the Chairman of the board of directors of Monaker (the Voting Agreement“Voting Agreement”). Pursuant to the Voting Agreement, each of the HotPlay Stockholders agreed to vote all voting shares of Monakerthe Company which they hold and may hold in the future (during the term of the agreement) to elect Mr. Kerby and Mr. Monaco to the board of directors of the Company,Board, and each of the HotPlay nominees agreed to continue to nominate each of Mr. Kerby and Mr. Monaco to the board of directors of Monaker.Board. The agreement continues in effect until the earlier of February 26, 2026, the date of both Mr. Kerby’s and Mr. Monaco’s death, or the date that both Mr. Kerby and Mr. Monaco have provided notice of termination to such HotPlay Stockholders.

 


Other than pursuant to the Voting Agreement, there are no arrangements or understandings between any of our current directors, nominees for directors or officers, and any other person pursuant to which any director, nominee for director, or officer was or is to be selected as a director, nominee or officer, as applicable.

Other Directorships

NoExcept to the extent otherwise set forth above, no directors of the Company are also directors of issuers with a class of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (or which otherwise are required to file periodic reports under the Exchange Act).

 

Involvement in Certain Legal Proceedings

 

To the best of our knowledge,There currently are no legal proceedings, and during the past ten years nonethere have been no legal proceedings, that are material to the evaluation of the ability or integrity of any of our directors or director nominees. There are no material proceedings to which any director, officer, affiliate, or owner of record or beneficially of more than 5% of any class of voting securities of the Company, or any associates of any such persons, is a party adverse to the Company or any of our subsidiaries, and none of such persons has a material interest adverse to the Company or any of its subsidiaries.

Board and Stockholder Meetings and Attendance

The Board has responsibility for establishing broad corporate policies and reviewing our overall performance rather than day-to-day operations. The primary responsibility of the Board is to oversee the management of the Company and, in doing so, serve the best interests of the Company and its stockholders. The entire Board selects, evaluates, and provides for the succession of executive officers were involved in any of the following: (1) any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; (2) any conviction in a criminal proceeding or being a namedand, subject to stockholder election, directors. It reviews and approves corporate objectives and strategies, and evaluates significant policies and proposed major commitments of corporate resources. The Board also participates in decisions that have a pending criminal proceeding (excluding traffic violationspotential major economic impact on the Company. Management keeps the directors informed of Company activity through regular communication, including written reports and other minor offenses); (3) beingpresentations at Board and committee meetings.


Directors are elected annually and hold office until the Company’s next annual meeting of stockholders or until their successors are duly elected and qualified, subject to any order, judgment,prior death, resignation, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; (4) being found by a court of competent jurisdiction (in a civil action), the SEC or the Commodities Futures Trading Commission to have violated a federal or state securities or commodities law; (5) being the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of (i) any Federal or State securities or commodities law or regulation; (ii) any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order; or (iii) any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or (6) being the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.removal. 

 

Board of Directors Meetings

During the fiscal year that ended on February 28, 2021,2022, the Board held 1117 meetings, and took various other actions via the unanimous written consent of the board of directorsBoard and the various committees described above.below. All directors attended at least 75% of the board of directors’Board meetings and committee meetings relating to the committees on which each director served during the 20202021 fiscal year.

 

The Company held a virtual 2021 annual meeting 2022 Annual Meeting on February 24, 2021, which was attended by Mr. Monaco, Mr. Kerby, Mr. Duchesne, Mr. Orange and Ms. Zubko.April 22, 2022. Each director of the Company has historically been expected to be present at annual meetings of stockholders, absent exigent circumstances that prevent their attendance; however, due to COVID-19, some members of the board of directors were unable to attend the February 2021 meeting.2022 Annual Meeting. Where a director is unable to attend an annual meeting in person but is able to do so by electronic conferencing, the Company will arrange for the director’s participation by means where the director can hear, and be heard, by those present at the meeting. 

 

Director Independence

In accordance with Nasdaq requirements, our Board is comprised of a majority of independent directors and the Nominating and Corporate Governance, Compensation and Audit Committees are all comprised entirely of independent directors.

 

The board of directorsBoard annually determines the independence of each director and nominee for election as a director. The Board makes these determinations in accordance with The NASDAQNasdaq Capital Market’s (“NASDAQ’sNasdaq’s”) listing standards for the independence of directors and the SEC’s rules.

 

In assessing director independence, the Board considers, among other matters, the nature and extent of any business relationships, including transactions conducted, between the Company and each director and between the Company and any organization for which one of our directors is a director or executive officer or with which one of our directors is otherwise affiliated.

 


The Board has affirmatively determined that each of Mr. Pasquale “Pat” LaVecchia, Mr. Doug Checkeris, Mr. Simon Orange, Mr. Rupert Duchesne, Mr. Robert “Jamie” Mendola, Jr.,Messrs. Monaco, Kaewkham, Obata, Moosa and Gardner and Ms. Alexandra C. Zubko,Diges are independent.independent under applicable Nasdaq rules.

 

In accordance with NASDAQ requirements, our Board is comprised of a majority of independent directors and the Nominating and Corporate Governance, Compensation and Audit Committees are all comprised entirely of independent directors. 

Committees of the Board

We currently maintain an Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee, Litigation Committee and Risk Assessment Committee, which have the committee members described below. We have also established a disclosure committee, comprised of senior executives, directors and employees who are actively involved in the disclosure process, to specify, coordinate and oversee the public disclosure of information regarding the Company, other than through periodic and current report filings with the SEC.

 


Board Committee Membership

 

 IndependentAudit
Committee
Independent

Compensation

Committee

Audit
Committee

Compensation
Committee
Nominating and

Corporate Governance


Committee

Litigation 
Committee
Risk Assessment
Committee
J. Todd Bonner (1)
Nithinan “Jess Boonyawattanapisut
William Kerby    
Donald P. Monaco (1)XMM
Yoshihiro ObataXCMM
Athid Nanthawaroon    
Pasquale “Pat” LaVecchiaKomson KaewkhamXCM
Doug Checkeris XMC
Simon Orange X M 
Rupert DuchesneMXCM M
Robert “Jamie” Mendola,Edward Terrence Gardner, Jr.X CM
Alexandra C. ZubkoFarooq MoosaXM  M
Carmen DigesXMMCC

(1)– Chairman of board of directors.

 

(1) – Chairman of board of directors.

C – Chairman of Committee.

M – Member.

C– Chairman of Committee.

 

M– Member.

Each of these committees has the duties described below and operates under a charter that has been approved by our board of directors.

Audit Committee

 

The Audit Committee, which is comprised exclusively of independent directors, has been established by the Board to oversee our accounting and financial reporting processes and the audits of our financial statements.

 

The Audit Committee has the responsibility for reviewing the disclosures made by the Chief Executive Officer and the Chief Financial Officer in connection with their required certifications accompanying the Company’s periodic reports to be filed with the SEC; reviewing and discussing the Company’s quarterly financial results and related press releases, if any, with management and the independent auditors prior to the release of such information to the public; reviewing with the management the proposed scope and plan for conducting internal audits of Company operations and obtaining reports of significant findings and recommendations, together with management’s corrective action plans; seeking to ensure the corporate audit function has sufficient authority, support and access to Company personnel, facilities and records to carry out its work without restrictions or limitations; reviewing the corporate audit function of the Company, including its charter, plans, activities, staffing and organizational structure; reviewing progress of the internal audit program, key findings and management’s action plans to address findings; periodically reviewing the Company’s policies with respect to legal compliance, conflicts of interest and ethical conduct; seeking to ensure the adequacy of procedures for the receipt, retention and treatment of complaints regarding accounting, internal accounting control or auditing matters, including the confidential submission of complaints by employees regarding such matters; and recommending to the Board any changes in ethics or compliance policies that the committee deems appropriate.

 


The Board has selected the members of the Audit Committee based on the Board’s determination that the members are financially literate (as required by NASDAQNasdaq rules) and qualified to monitor the performance of management and the independent auditors and to monitor our disclosures so that our disclosures fairly present our business, financial condition and results of operations.

 

The Board has also determined that Mr. LaVecchia is an “auditeach of Messrs. Gardner and Moosa and Ms. Diges qualify as “audit committee financial expertexperts” (as defined in the SEC rules) because heeach of them has the following attributes: (i) an understanding of generally accepted accounting principles in the United States of America (“GAAPGAAP”) and financial statements; (ii) the ability to assess the general application of such principles in connection with accounting for estimates, accruals and reserves; (iii) experience analyzing and evaluating financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of issues that can reasonably be expected to be raised by our financial statements; (iv) an understanding of internal control over financial reporting; and (v) an understanding of audit committee functions. Mr. LaVecchiaEach of Messrs. Gardner and Moosa and Ms. Diges has acquired these attributes by means of having held various positions that provided relevant experience, as described in histheir biographical below.information disclosures, above.

 

The Audit Committee has the sole authority, at its discretion and at our expense, to retain, compensate, evaluate and terminate our independent auditors and to review, as it deems appropriate, the scope of our annual audits, our accounting policies and reporting practices, our system of internal controls, our compliance with policies regarding business conduct and other matters. In addition, the Audit Committee has the authority, at its discretion and at our expense, to retain special legal, accounting or other advisors to advise the Audit Committee.

 


During the fiscal year ended February 28, 2021,2022, the committee held four4 meetings.

 

The Audit Committee Charter was filed as Exhibit 99.1operates pursuant to a written charter that is available on the Current Report on Form 8-K which we filed with the SEC on April 25, 2017.Company’s website at: https://www.nextplaytechnologies.com/investors/governance.

 

Compensation Committee

 

The Compensation Committee, which is comprised exclusively of independent directors, is responsible for the administration of our stock compensation plans, approval, review and evaluation of the compensation arrangements for our executive officers and directors and oversees and advises the Board on the adoption of policies that govern the Company’s compensation and benefit programs. In addition, the Compensation Committee has the authority, at its discretion and at our expense, to retain special legal, accounting or other advisors to advise the Compensation Committee.

 

During the fiscal year ended February 28, 2021,2022, the committee held three4 meetings, and took various other actions via consent to actions without meetings.

 

The Compensation Committee Charter was filed as Exhibit 99.2operates pursuant to the Current Report on Form 8-K which we filed with the SEC on April 25, 2017.

Compensation Committee Interlocks and Insider Participation

The current members of the Compensation Committee are Messrs. Robert “Jamie” Mendola, Jr. (Chairman), Pasquale “Pat” LaVecchia, Doug Checkeris, and Simon Orange, who are each independent members of our board of directors. No member of the Compensation Committeea written charter that is an employee or a former employee of the Company. During fiscal 2020, none of our executive officers servedavailable on the compensation committee (or its equivalent) or board of directors of another entity whose executive officer served on our Compensation Committee. Accordingly, the Compensation Committee members have no interlocking relationships required to be disclosed under SEC rules and regulations. Company’s website at: https://www.nextplaytechnologies.com/investors/governance.

 


Nominating and Governance Committee

 

The Nominating and Governance Committee, which is comprised exclusively of independent directors, is responsible for identifying prospective qualified candidates to fill vacancies on the Board, recommending director nominees (including chairpersons) for each of our committees, developing and recommending appropriate corporate governance guidelines and overseeing the self-evaluation of the Board.

 

In considering individual director nominees and Board committee appointments, our Nominating and Governance Committee seeks to achieve a balance of knowledge, experience and capability on the Board and Board committees and to identify individuals who can effectively assist the Company in achieving our short-term and long-term goals, protecting our stockholders’ interests and creating and enhancing value for our stockholders. In so doing, the Nominating and Governance Committee considers a person’s diversity attributes (e.g., professional experiences, skills, background, race and gender) as a whole and does not necessarily attribute any greater weight to one attribute. Moreover, diversity in professional experience, skills and background, and diversity in race and gender, are just a few of the attributes that the Nominating and Governance Committee takes into account. In evaluating prospective candidates, the Nominating and Governance Committee also considers whether the individual has personal and professional integrity, good business judgment and relevant experience and skills, and whether such individual is willing and able to commit the time necessary for Board and Board committee service.

 

While there are no specific minimum requirements that the Nominating and Governance Committee believes must be met by a prospective director nominee, the Nominating and Governance Committee does believe that director nominees should possess personal and professional integrity, have good business judgment, have relevant experience and skills, and be willing and able to commit the necessary time for Board and Board committee service. The Company does not have a formal diversity policy. However, the Nominating and Governance Committee evaluates each individual in the context of the Board as a whole, with the objective of recommending individuals that can best perpetuate the success of our business and represent stockholder interests through the exercise of sound business judgment using their diversity of experience in various areas. We believe our current directors possess diverse professional experiences, skills and backgrounds, in addition to (among other characteristics) high standards of personal and professional ethics, proven records of success in their respective fields and valuable knowledge of our business and our industry.

  

The Nominating and Governance Committee uses a variety of methods for identifying and evaluating director nominees. The Nominating and Governance Committee also regularly assesses the appropriate size of the Board and whether any vacancies on the Board are expected due to retirement or other circumstances. In addition, the Nominating and Governance Committee considers, from time to time, various potential candidates for directorships. Candidates may come to the attention of the Nominating and Governance Committee through current Board members, professional search firms, stockholders or other persons. These candidates may be evaluated at regular or special meetings of the Nominating and Governance Committee and may be considered at any point during the year.

 

The Nominating and Governance Committee evaluates director nominees at regular or special Committeecommittee meetings pursuant to the criteria described above and reviews qualified director nominees with the Board. The Nominating and Governance Committee selects nominees that best suit the Board’s current needs and recommends one or more of such individuals for election to the Board.

 


The Nominating and Governance Committee will consider candidates recommended by stockholders, provided the names of such persons, accompanied by relevant biographical information, and other information as required by the Company’s Bylaws, are properly submitted in writing to the Secretary of the Company in accordance with the Bylaws and applicable law. The Secretary will send properly submitted stockholder recommendations to the Nominating and Governance Committee. Individuals recommended by stockholders in accordance with these procedures will receive the same consideration received by individuals identified to the Nominating and Governance Committee through other means. The Nominating and Governance Committee also may, in its discretion, consider candidates otherwise recommended by stockholders without accompanying biographical information, if submitted in writing to the Secretary.

 

During the fiscal year ended February 28, 2021,2022, the committee held ten meetings1 meeting and took various other actions via consent to actions without meetings.

 


The Nominating and Governance Committee Charter was filedoperates pursuant to a written charter that is available on the Company’s website at: https://www.nextplaytechnologies.com/investors/governance.

Litigation Committee

The Litigation Committee, which is currently comprised exclusively of independent directors, is responsible for overseeing any significant arbitration, litigation or other legal process involving a dispute between the Company and a third party (“Disputes”), and assist the Board in fulfilling its oversight responsibilities with respect to such Disputes. In addition, the Litigation Committee has sole authority to retain and terminate outside counsel, or other experts or consultants, as Exhibit 99.3it deems appropriate in connection with any litigation or potential litigation matters, including sole authority to approve the Current Report on Form 8-Kfees and other retention terms for such persons. The Litigation Committee operates pursuant to a written charter.

Risk Assessment Committee

The Risk Assessment Committee, which we filedis comprised exclusively of independent directors, has been established by the Board to oversee significant internal complaints and investigations into management, and to assist the Board in fulfilling its oversight responsibility with respect to such complaints. The Risk Assessment Committee’s responsibilities include, without limitation, consulting with counsel to review, investigate, assess, and manage any relevant complaints. In addition, the Risk Assessment Committee has sole authority to retain and terminate outside counsel, or other experts or consultants, as it deems appropriate in connection with any matters or potential matters being considered by the committee, including sole authority to approve the fees and other retention terms for such persons. The Risk Assessment Committee operates pursuant to a written charter.

Board Diversity

Our Nominating Committee is responsible for reviewing with the SECBoard, on April 25, 2017. an annual basis, the appropriate characteristics, skills and experience required for the Board as a whole and its individual members. In evaluating the suitability of individual candidates (both new candidates and current members), the Nominating Committee, in recommending candidates for election, and the Board, in approving (and, in the case of vacancies, appointing) such candidates, will take into account many factors, including the following:

Personal and professional integrity, ethics and values;
Experience in corporate management, such as serving as an officer or former officer of a publicly-held company;
Experience as a board member or executive officer of another publicly-held company;
Diversity of expertise and experience in substantive matters pertaining to our business relative to other Board members;
Diversity of background and perspective, including, but not limited to, with respect to age, gender, race, sexual orientation, place of residence and specialized experience;
Experience relevant to our business industry and with relevant social policy concerns; and
Relevant academic expertise or other proficiency in an area of our business operations.


Currently, our Board evaluates each individual in the context of the Board as a whole, with the objective of assembling a group that can best maximize the success of the business and represent stockholder interests through the exercise of sound judgment using its diversity of experience in these various areas. Although we do not have a formal diversity policy in place, our Board values diversity and supports having directors of diverse gender, race, and ethnicity, along with varied skills and experiences. Information regarding the diversity of our Board members is outlined in the below table:

Board Diversity Matrix (As of May 31, 2022)
Total number of Directors 10
  Female Male Non-Binary Did Not 
Disclose
Gender
Part I: Gender Identity        
Directors  1  8 - 1
Part II: Demographic Background        
African American or Black - - - -
Alaskan Native or Native American - - - -
Asian  1 4 - -
Hispanic or Latinx - - - -
Native Hawaiian or Pacific Islander - - - -
White - 4 - -
Two or More Races or Ethnicities - - - -
LGBTQ+ - - - -
Did Not Disclose Demographic Background - - - 1

 

Stockholder Communications with the Board of Directors

 

In connection with all other matters other than the nomination of members of our board of directorsBoard (as described above)below), our stockholders and other interested parties may communicate with members of the board of directorsBoard by submitting such communications in writing to our Secretary at 1560 Sawgrass Corporate Parkway, Suite 130, Sunrise, Florida 33323, who, upon receipt of any communication other than one that is clearly marked Confidential,“Confidential,” will note the date the communication was received, open the communication, make a copy of it for our files and promptly forward the communication to the director(s) to whom it is addressed. Upon receipt of any communication that is clearly marked Confidential,“Confidential,” our Secretary will not open the communication, but will note the date the communication was received and promptly forward the communication to the director(s) to whom it is addressed. If the correspondence is not addressed to any particular member of the board of directors,Board, the communication will be forwarded to a Board member to bring to the attention of the Board.

 

Executive Sessions of the Board of Directors

 

The independent members of our board of directors meet in executive session (with no management directors or management present) from time to time. The executive sessions include whatever topics the independent directors deem appropriate.

 

Code of Ethics

We maintain a Code of Ethics and Code of Business Conduct, which are applicable to all of our directors, officers and employees. These codes set forth ethical standards to which these persons must adhere and other aspects of accounting, auditing and financial compliance, as applicable. We undertake to provide a printed copy of these codes free of charge to any person who requests. Any such request should be sent to our principal executive offices attention: Chief Financial Officer.

 

We intend to disclose any amendments to our Code of Ethics and Code of Business Conduct and any waivers with respect to our Code of Ethics and Code of Business Conduct granted to our principal executive officer, our principal financial officer, or any of our other employees performing similar functions on our website at www.monakergroup.com,https://www.nextplaytechnologies.com/, within four business days after the amendment or waiver. In such case, the disclosure regarding the amendment or waiver will remain available on our website for at least 12 months after the initial disclosure. There have been no waivers granted with respect to our Code of Ethics and Code of Business Conduct to any such officers or employees to date.

 

Whistleblower Protection Policy

On April 18, 2017, the Company adopted a Whistleblower Protection Policy (“Whistleblower PolicyPolicy”) that applies to all of its directors, officers, employees, consultants, contractors and agents of the Company. The Whistleblower Policy has been reviewed and approved by the Board. A copy of the Whistleblower Policy is available on the Company’s website at: https://www.nextplaytechnologies.com/investors/governance.

 


Policy on Equity Ownership

The Company does not have a policy on equity ownership at this time. However, as illustrated in the table set forth under Item“Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters—Principal Stockholders, Directors and ManagementManagement”, all of our Named Executive Officers and all of our directors are beneficial owners of stock of the Company.

 

Policy Against Hedging

The Company recognizes that hedging against losses in Company shares may disturb the alignment between stockholders and executives that equity awards are intended to build. Accordingly, the Company has incorporated prohibitions on ‘short’short sales’ within its insider trading policy, which applies to directors, officers and employees.

 


Compensation RecoveryConflicts of Interest

 

UnderOur directors and officers are not obligated to commit their full time and attention to our business and, accordingly, they may encounter a conflict of interest in allocating their time between our operations and those of other businesses. In the Sarbanes–Oxley Actcourse of 2002 (the “Sarbanes-Oxley Act”),their other business activities, they may become aware of investment and business opportunities which may be appropriate for presentation to us as well as other entities to which they owe a fiduciary duty. As a result, they may have conflicts of interest in the event of misconduct that results indetermining to which entity a financial restatement that would have reduced a previously paid incentive amount, we can recoup those improper payments from our Chief Executive Officer and Chief Financial Officer. We plan to implement a clawback policyparticular business opportunity should be presented. They may also in the future althoughbecome affiliated with entities that are engaged in business activities similar to those we intend to conduct.

In general, officers and directors of a corporation are required to present business opportunities to the corporation if:

the corporation could financially undertake the opportunity;
the opportunity is within the corporation’s line of business; and
it would be unfair to the corporation and its stockholders not to bring the opportunity to the attention of the corporation.

We have not yet implemented such policy.

Executive Officersadopted a Code of Business Conduct and Directors of the Combined Company Following the HotPlay share exchange

Effective as of the closing of the HotPlay Share Exchange, (i) the officers of the combined company are expected to include Co-Chief Executive Officers (1) Mr. William Kerby (the Company’s current Chief Executive Officer) and (2) Ms. Nithinan Boonyawattanapisut (who will also become a member of the Company’s board of directors, a director of HotPlay and of Red Anchor Trading Corporation, a HotPlay Stockholder which is controlled by Ms. Boonyawattanapisut (“Red Anchor”), and the spouse of Mr. J. Todd Bonner (who will become a director of the Company following the closingEthics, as discussed below)); Mr. Mark Vange (the Chief Technology Officerin further detail above, that obligates our directors, officers and employees to disclose potential conflicts of HotPlay) as Chief Technology Officer of the Company; Mr. Sirapop ‘Kent’ Taepakdee (the Company’s current Chief Financial Officer), as Chief Financial Officer of the Company;interest and Mr. Timothy Sikora (the Company’s current Chief Operating Officer and Chief Information Officer), as Chief Operating Officer and Chief Information Officer of the Company; and (ii) the combined company’s board directors will be comprised of nine members:

(1)Mr. J. Todd Bonner (who is the Chairman and a director of HotPlay and the spouse of Ms. Boonyawattanapisut);
(2)Ms. Nithinan Boonyawattanapisut;
(3)Mr. Athid Nanthawaroon (who is a director of HotPlay and the Chief Executive Officer and director of Tree Roots Entertainment Group Co., Ltd., one of the HotPlay Stockholders); and
(4)Mr. Komson Kaewkham (who is a Senior Vice President with DTGO Corporation Limited),

who have been designated by Red Anchor and the Axion Stockholders, and of whom Mr. Komson Kaewkham is anticipated to be ‘independent’;

(5)Mr. Donald P. Monaco, the current Chairman of the Company; and
(6)Mr. Kerby, the current Chief Executive Officer (who will become a Co-Chief Executive Officer following the closing),

who are both current members of the board of directors of Monaker (and were nominated by the board of directors), and of which Mr. Donald P. Monaco will be ‘independent’ under applicable NASDAQ rules; and

(7)Mr. Simon Orange, a current member of the Board of the Company, who has been agreed to mutually by Red Anchor and the Company’s board of directors, and who is ‘independent’; and
(8)Mr. Yoshihiro Obata, who has been agreed to mutually by Red Anchor and the Monaker board of directors, and will be ‘independent’; and

(9)Ms. Stacey Riddell, who has been agreed to mutually by Red Anchor and the Monaker board of directors, and will be ‘independent’.

On April 7, 2021, each of Mr. Pasquale “Pat” LaVecchia, Mr. Doug Checkeris, Mr. Rupert Duchesne, Mr. Robert “Jamie” Mendola, Jr. and Ms. Alexandra C. Zubko, each then members of the Board of Directors of the Company, provided letters of resignation to the Company, resigning as directors (andprohibits those persons from any other positions they hold with the Company), withengaging in such resignations effective automatically as of the closing of the HotPlay Exchange Agreement.transactions without our consent.

Biographical information for each of the to be appointed officers of the Company and members of the board of directors of the Company following the closing of the HotPlay Exchange Agreement, are included in the Definitive Proxy Statement on Schedule 14A filed by the Company with the Securities and Exchange Commission on March 4, 2021.

 


Delinquent Section 16(a) Reports

 

Section 16(a) of the Exchange Act requires our directors and officers, and persons who beneficially own more than 10% of a registered class of the Registrant’s equity securities, to file reports of beneficial ownership and changes in beneficial ownership of our securities with the SEC on Forms 3, 4 and 5. Officers, directors and greater than 10% stockholders are required by SEC regulation to furnish us with copies of all Section 16(a) forms they file.

 

Based solely upon our knowledge of transactions and our review of the Section 16(a) filings that have been furnished to us and filed publicly, we believe that, except as set forth below, during FYE February 28, 2021, that2022, no director, executive officer, or beneficial owner of more than 10% of our common stock failed to file a report on a timely basis, except that: Sirapop ‘Kent’ Taepakdee, our Chief Financial Officer, inadvertently failedbasis. We are aware of the following late filings, or failure to timely disclose one transaction on Form 4 and asfile a result one Form 4 was filed untimely; Rupert Duchesne, our director inadvertently failed to timely disclose two transactions on Form 4 and as a result two Form 4s were filed untimely; Alexandra Zubko, our director, inadvertently failed to timely disclose two transactions on Form 4 and as a result two Form 4s were filed untimely; Pasquale “Pat” LaVecchia, our director, inadvertently failed to timely disclose two transactions on Form 4 and as a result two Form 4s were filed untimely; Donald P. Monaco, our Chairman, inadvertently failed to timely disclose two transactions on Form 4 and as a result two Form 4s were filed untimely; Simon Orange, our director, inadvertently failed to timely disclose three transactions on Form 4 and as a result three Form 4s were filed untimely; Doug Checkeris, our director, inadvertently failed to timely disclose three transactions on Form 4 and as a result three Form 4s were filed untimely; and Robert “Jamie” Mendola, our director, inadvertently failed to timely disclose three transactions on Form 4 and as a result three Form 4s were filed untimely.report required by Section 16(a), during FYE February 28, 2022:

Nithinan Boonyawattanapisut, the Company’s Co-Chief Executive Officer and a director, and her husband Todd Bonner, Chairman of the Company’s Board, filed one late Form 4 that included one transactions that was not reported on a timely basis;

 

Nithinan Boonyawattanapisut, the Company’s Co-Chief Executive Officer and a director, also filed a late Form 3;

William Kerby, the Company’s Co-Chief Executive Officer and a director, filed two late Form 4s that included an aggregate of seven transactions that were not reported on a timely basis;

Donald Monaco, a director of the Company, filed two late Form 4s that included an aggregate of two transactions that were not reported on a timely basis;

Yoshihiro Obata, a director of the Company, filed a late Form 3 and two late Form 4s that included an aggregate of two transactions that were not reported on a timely basis;

Carmen Diges, a director of the Company, filed one late Form 4 that included one transactions that was not reported on a timely basis;

Komson Kaewkham, a director of the Company, failed to file a Form 3 and two Form 4s, which should have included an aggregate of two transactions that were not reported;
Athid Nanthawaroon, a director of the Company, failed to file a Form 3 and three Form 4s, which should have included an aggregate of three transactions that were not reported;


Farooq Moosa, a director of the Company, filed a late Form 3;
Andrew Greaves, the Company’s Chief Operating Officer, filed a late Form 3;
Stacey Riddell, a former director of the Company, filed a late Form 3;

Rupert Duchesne, a former director of the Company, filed one late Form 4 that included one transactions that was not reported on a timely basis;

Alexandra Zubko, a former director of the Company, filed one late Form 4 that included one transactions that was not reported on a timely basis;

Robert James Mendola, a former director of the Company, filed one late Form 4 that included one transactions that was not reported on a timely basis;

Simon Orange, a former director of the Company, filed one late Form 4 that included one transactions that was not reported on a timely basis; and

Pat LaVecchia, a former director of the Company, filed one late Form 4 that included one transactions that was not reported on a timely basis.

Pursuant to SECSEC rules, we are not required to disclose in this filing any failure to timely file a Section 16(a) report that has been disclosed by us in a prior annual report or proxy statement.

Item 11. Executive Compensation

 

Summary Executive Compensation Table

 

The following table sets forth certain information concerning compensation earned by or paid to certain persons who we refer to as our Named“Named Executive OfficersOfficers” for services provided for the fiscal years ended February 28, 2022 and 2021 and February 29, 2020 (Fiscal 20212022 and Fiscal 2020,2021, respectively). Our Named Executive Officers include persons who (i) served as our principal executive officer or acted in a similar capacity during Fiscal 2021, and Fiscal 2020, (ii) were serving at fiscal year-end as our two most highly compensated executive officers, other than the principal executive officer (“PEO”), whose total compensation exceeded $100,000 as of February 28, 2022, and (iii) if applicable, up to two additional individuals for whom disclosure would have been provided as a most highly compensated executive officer, but for the fact that the individual was not serving as an executive officer at fiscal year-end.as of February 28, 2022.

Name and
Principal
Position
 Fiscal
Year
Ended
  Salary  Bonus  

Stock

Awards (1)

 

 

Option

Awards

  

All Other

Compensation

 

 Total 
William Kerby,
CEO and Vice-Chairman of the Board
  2021  $400,000  $  $  $  $124,759(2), (3), (9) $524,759 
   2020  $400,000  $  $  $  $42,000(2), (3) $442,000 
                             

Sirapop “Kent” Taepakdee,

VP of Finance and Chief Financial Officer (4)

  2021  $157,834  $10,000  $64,850(8)  $  $11,211(9) $243,895 
   2020  $64,917  $  $  $  $  $64,917 
Timothy Sikora,
COO and CIO (5)
  2021  $200,000  $  $36,300(8)  $  $7,762(9) $244,062 
   2020  $75,769  $  $31,800(8)  $  $  $107,569 
Omar Jimenez,
Former CFO, COO and Director (6)
  2020  $297,917  $  $  $  $103,195(7) $401,112 

 


Name and  Principal
Position
 Fiscal  
Year
Ended
  Salary  Bonus  Stock 
Awards
 (1)
  All 
Other 
Compensation
  Total 
Nithinan Boonyawattanapisut,  2022  $166,667  $200,000  $46,750(4) $12,500(2)(6) $425,917 
PEO and Co-CEO  2021  $  $  $  $  $ 
                         
William Kerby,  2022  $400,000  $400,000  $  $42,000  $842,000 
Co-CEO (and former PEO)  2021  $400,000  $  $  $124,759(2)(3)(5) $524,759 
                         
Sirapop “Kent” Taepakdee,  2022  $200,000  $  $  $  $200,000 
CFO  2021  $157,834  $10,000  $64,850(4) $11,211(5) $232,684 
                         
Mark Vange  2022  $187,500  $  $2,500,000(7) $  $2,687,500 
CTO  2021  $  $  $  $  $ 
                         
Timothy Sikora,  2022  $236,000  $  $  $  $236,000 
CIO  2021  $200,000  $  $36,300(4) $7,762(5) $244,062 

*

Does not include perquisites and other personal benefits, or property, unless the aggregate amount of such compensation is more than $10,000. None of our executive officers received any change in pension value and nonqualified deferred compensation earnings during the periods presented.

(1)The value of the Stock Awards in the table above was calculated based on the fair value of such securities calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718.


(2)

Nithinan Boonyawattanapisut and William Kerby each receives additional compensation in the form of a car allowance in the amount of $1,500 per month.

(3)William Kerby received additional compensation in the form of a Merchant Banking Guarantee in the amount of $2,000 per month through November 1, 2018, when he began receiving $2,000 as a guaranty fee under his employment agreement, as discussed below.month.

(4)Appointed as the principal financial officer and principal accounting officer of the Company on October 9, 2019, and as the Vice President of Finance, acting Chief Financial Officer (since Chief Financial Officer), Treasurer, and Secretary of the Company effective February 1, 2020.
(5)Appointed as the Chief Operating Officer and the Chief Information Officer of the Company (executive positions) effective February 1, 2020. Served as the Chief Information Officer (non-executive) from October 9, 2019, to February 1, 2020, when he was appointed as an executive of the Company.
(6)Resigned as Chief Financial Officer, Chief Operating Officer, Treasurer and Secretary on January 17, 2020. Ceased serving as a member of the board of directors on August 15, 2019.
(7)Represents cash-out of unused vacation time which had accrued as of Mr. Jimenez’s resignation, which was paid in the form of cash.
(8)(4)Represents the Stock Awards to Mr.Sirapop “Kent” Taepakdee for 27,500 shares, and to Mr.Timothy Sikora for 27,000 shares (12,000 in FY 2020 and 15,000 in FY 2021).shares.

(9)(5)Includes cash-outpayment of unused vacation time, which was paid in the form of cash, totaling $82,759 for Mr.William Kerby, $11,211 for Mr.Sirapop “Kent” Taepakdee, and $7,762 for Mr. Sikora.Timothy Sikora .

 


(6)Nithinan Boonyawattanapisut received $1,000 monthly for health/medical/dental/vision insurance.

 

Outstanding Equity Awards at Fiscal Year-End

(7)Represents the Stock Awards to Mark Vange for 1,000,000 shares

 

None.

Employment and Compensation Agreements

We have the following employment contracts and compensation agreements in place with our Named Executive Officers and Chairman:

 

William Kerby,Nithinan “Jess” Boonyawattanapisut, Employment Agreement

On October 31, 2018,September 16, 2021, the Company entered into an Employment Agreement with William Kerby,Ms. Boonyawattanapisut, its ChiefCo-Chief Executive Officer and Vice Chairmanmember of its boardBoard, which agreement has an effective date of directors. The agreement was effective as of NovemberOctober 1, 2018, and replaced and superseded the terms of Mr. Kerby’s prior employment agreement dated October 15, 2006.

2021. The agreement remains in effect (renewing automatically on a month-to-month basis), until either party provides the other at least 30 days prior written notice of its intent to terminate the agreement, or until terminated as discussed below.

 

The agreement includes a non-compete provision, prohibiting Ms. Boonyawattanapisut from competing against the Company during the term of the agreement and for a period of 12 months after termination thereof (subject to certain exceptions described below), in any state or country in connection with (i) the commercial sale of products sold by the Company during the six months preceding the termination date; and (ii) any services the Company commercially offered during the six months prior to the termination date (collectively, the “Non-Compete”).

During the term of the agreement, Ms. Boonyawattanapisut is to receive a base salary of $400,000 per year, which may be increased at any time at the discretion of the Compensation Committee of the Board without the need to amend the agreement; an annual bonus payable at the discretion of the Compensation Committee; other bonuses which may be granted/approved from time to time in the discretion of the Compensation Committee; $200,000 in cash and 25,000 shares of common stock issued as a sign-on bonus under the terms of the Company’s Amended and Restated 2017 Equity Incentive Plan; up to four weeks of annual paid time off, which can be rolled-over year to year, or which in the discretion of Ms. Boonyawattanapisut, can be required to be paid in cash at the end of any year or the termination of the agreement; and a car allowance equal to an equivalent of $1,500 per month, during the term of the agreement.

The agreement provides Ms. Boonyawattanapisut with the option of receiving some or all of the base salary and/or any bonus in shares of the Company’s common stock, with such shares being based on the higher of (i) the closing sales price per share on the trading day immediately preceding the determination by Ms. Boonyawattanapisut to accept shares in lieu of cash; and (ii) the lowest price at which such issuance will not require stockholder approval under the rules of the stock exchange where the Company’s common stock is then listed or Nasdaq ((i) or (ii) as applicable, the “Share Price” and the “Stock Option”), provided that Ms. Boonyawattanapisut is required to provide the Company at least five business days prior written notice if she desires to exercise the Stock Option as to any payment of compensation, unless such time period is waived by the Company. The issuance of the shares described above is subject to the approval of the stock exchange where the Company’s common stock is then listed or Nasdaq, and where applicable, stockholder approval, and in the sole discretion of the board of directors, may be issued under, or outside of, a stockholder approved stock plan.


The agreement includes standard provisions relating to the reimbursement of business expenses, indemnification rights, rights to Company property and inventions (which are owned by the Company), dispute resolutions, tax savings, clawback rights and provisions entitling Ms. Boonyawattanapisut to receive any fringe benefits offered by the Company to other executives (subsidized in full by the Company) including, but not limited to, family coverage for health/medical/dental/vision, life and disability insurance.

The agreement terminates upon Ms. Boonyawattanapisut’s death and can be terminated by the Company upon her disability (as described in the agreement), by the Company for Cause (defined below) or Ms. Boonyawattanapisut for Good Reason (defined below). For the purposes of the agreement, (A) “Cause” means (i) Ms. Boonyawattanapisut’s gross and willful misappropriation or theft of the Company’s or any of its subsidiary’s funds or property; or (ii) Ms. Boonyawattanapisut’s conviction of, or plea of guilty or nolo contendere to, any felony or crime involving dishonesty or moral turpitude; or (iii) Ms. Boonyawattanapisut materially breaches any obligation, duty, covenant or agreement under the agreement, which breach is not cured or corrected within thirty days of written notice thereof from the Company (except for certain breaches which cannot be cured); or (iv) Ms. Boonyawattanapisut commits any act of fraud; and (B) “Good Reason” means (i) without the consent of Ms. Boonyawattanapisut, the Company materially reduces Ms. Boonyawattanapisut’s title, duties or responsibilities, without the same being corrected within ten days after being given written notice thereof; (ii) the Company fails to pay any regular installment of base salary to Ms. Boonyawattanapisut and such failure to pay continues for a period of more than thirty days; or (iii) a successor to the Company fails to assume the Company’s obligations under the agreement, without the same being corrected within thirty days after being given written notice thereof.

In the event of termination of the agreement for death or disability by Ms. Boonyawattanapisut without Good Reason, or for Cause by the Company, Ms. Boonyawattanapisut is due all consideration due and payable to her through the date of termination. In the event of termination of the agreement by Ms. Boonyawattanapisut for Good Reason or the Company for any reason other than Cause (or if Ms. Boonyawattanapisut’s employment is terminated other than for Cause within six months before or twenty-four months following the occurrence of a Change of Control (defined in the agreement) of the Company), Ms. Boonyawattanapisut is due all consideration due and payable through the date of termination; a lump sum payment equal to twelve months of base salary; continued participation in all benefit plans and programs of the Company for twelve months after termination (or at the option of the Company, reimbursement of COBRA insurance premiums for substantially similar coverage as the Company’s plans); and the Non-Compete will not apply to Ms. Boonyawattanapisut.

William Kerby, Employment Agreement

On October 31, 2018, the Company entered into an Employment Agreement with Mr. Kerby, who served as the Company’s Chief Executive Officer and Vice Chairman of the Board at that time. The agreement was effective as of November 1, 2018, and replaced and superseded the terms of Mr. Kerby’s prior employment agreement dated October 15, 2006.

The agreement remains in effect (renewing automatically on a month-to-month basis) until either party provides the other at least 30 days prior written notice of its intent to terminate the agreement, or until terminated as discussed below.

The agreement includes a non-compete provision, prohibiting Mr. Kerby from competing against the Company during the term of the agreement and for a period of 12 months after termination thereof (subject to certain exceptions described below), in any state or country in connection with (A) the offer of Alternative Lodging Rental properties (Vacation Home Rentals) which are distributed on a Business to Business Basis; (B) the commercial sale of specialty products sold by the Company during the six (6) months preceding the termination date; and (C) any services the Company commercially offered during the six (6) months prior to the termination date (collectively, the Non-Compete“Non-Compete”).


 

During the term of the agreement, Mr. Kerby is to receive a base salary of $400,000 per year, which may be increased at any time at the discretion of the Compensation Committee of the board of directors of the Company;Board; an annual bonus payable at the discretion of the Compensation Committee, of up to 100% of his base salary (50% based on meeting short term goals and 50% based on meeting long-term goals, which are determined from time to time by the Compensation Committee); other bonuses which may be granted from time to time in the discretion of the Compensation Committee; 25,000 shares of common stock issued as a sign-on bonus under the terms of the Company’s 2017 Equity Incentive Plan; up to four weeks of annual paid time off, which can be rolled-over year to year, or which in the discretion of Mr. Kerby, can be required to be paid in cash at the end of any year or the termination of the agreement; and a car allowance of $1,500 per month during the term of the agreement.

 

The agreement provides Mr. Kerby with the option of receiving some or all of the base salary and/or any bonus in shares of the Company’s common stock, with such shares being based on the higher of (a) the closing sales price per share on the trading day immediately preceding the determination by Mr. Kerby to accept shares in lieu of cash; and (b) the lowest price at which such issuance will not require stockholder approval under the rules of the stock exchange where the Company’s common stock is then listed or Nasdaq ((a) or (b) as applicable, the Share Price“Share Price” and the Stock Option“Stock Option”), provided that Mr. Kerby shall be required to provide the Company at least five business days prior written notice if he desires to exercise the Stock Option as to any payment of compensation, unless such time period is waived by the Company. The issuance of the shares described above is subject to the approval of the stock exchange where the Company’s common stock is then listed or Nasdaq, and where applicable, stockholder approval, and in the sole discretion of the board of directors,Board, may be issued under, or outside of, a stockholder approved stock plan.

 

The agreement includes standard provisions relating to the reimbursement of business expenses, indemnification rights, rights to company property and inventions (which are owned by the Company), dispute resolutions, tax savings, clawback rights and provisions entitling Mr. Kerby to receive any fringe benefits offered by the Company to other executives (subsidized in full by the Company) including, but not limited to, family coverage for health/medical/dental/vision, life and disability insurance, as well as amounts under the Company’s 401(k) Savings and Retirement.

  


Additionally, in consideration for Mr. Kerby having entered into numerous personal guarantees with the Airline Reporting Commission, sellers of travel services, merchant providers, financial institutions, associations and service providers on behalf of the Company, the Company agreed that, for as long as Mr. Kerby is employed by the Company, provides services under the agreement and is willing to continue to support the Company in connection with such guarantees, he will receive a $2,000 per month guarantee fee. In the event Mr. Kerby resigns for Good Reason (defined below), or his employment is terminated by the Company, the Company agreed to eliminate any and all guarantees within thirty days, failing which, for each month the guarantees remain in place, the monthly guarantee fee will rise to $10,000 per month, until such time as the Company has assumed or terminated all such guarantees.

 

The agreement terminates upon Mr. Kerby’s death and can be terminated by the Company upon his disability (as described in the agreement), by the Company for Cause (defined below) or Mr. Kerby for Good Reason (defined below). For the purposes of the agreement, (A) Cause“Cause” means (i) Mr. Kerby’s gross and willful misappropriation or theft of the Company’s or any of its subsidiary’s funds or property; or (ii) Mr. Kerby’s conviction of, or plea of guilty or nolo contendere to, any felony or crime involving dishonesty or moral turpitude; or (iii) Mr. Kerby materially breaches any obligation, duty, covenant or agreement under the agreement, which breach is not cured or corrected within thirty (30) days of written notice thereof from the Company (except for certain breaches which cannot be cured); or (iv) Mr. Kerby commits any act of fraud; and (B) Good Reason“Good Reason” means (i) without the consent of Mr. Kerby, the Company materially reduces Mr. Kerby’s title, duties or responsibilities, without the same being corrected within ten (10) days after being given written notice thereof; (ii) the Company fails to pay any regular installment of base salary to Mr. Kerby and such failure to pay continues for a period of more than thirty (30) days; or (iii) a successor to the Company fails to assume the Company’s obligations under the agreement, without the same being corrected within thirty (30) days after being given written notice thereof.thereof .

 


In the event of termination of the agreement for death or disability by Mr. Kerby without Good Reason, or for Cause by the Company, Mr. Kerby is due all consideration due and payable to him through the date of termination. In the event of termination of the agreement by Mr. Kerby for Good Reason or the Company for any reason other than Cause (or if Mr. Kerby’s employment is terminated other than for Cause within six (6) months before or twenty-four (24) months following the occurrence of a Change of Control (defined in the agreement) of the Company), Mr. Kerby is due all consideration due and payable through the date of termination; a lump sum payment equal to twelve (12) months of base salary; continued participation in all benefit plans and programs of the Company for twelve (12) months after termination (or at the option of the Company, reimbursement of COBRA insurance premiums for substantially similar coverage as the Company’s plans); and the Non-Compete will not apply to Mr. Kerby.

 

The terms of the agreement were approved by the Company’s Compensation Committee, consisting solely of ‘independent’“independent” members of the Company’s board of directors.our Board.

 

Sirapop Kent“Kent” Taepakdee, Employment Agreement

 

On January 30, 2020, Mr. Sirapop Kent“Kent” Taepakdee entered into an employment agreement with the Company. Pursuant to Mr. Taepakdee’s employment agreement, he agreed to provide services to the Company as the VP of Finance and Chief Financial Officer.

 

Mr. Taepakdee receives a base salary payable in cash ($200,000 per year) pursuant to his employment agreement and is also eligible to receive equity compensation, when approved by the board of directorsBoard and subject to the Company meeting certain metrics as follows – Mr. Taepakdee is eligible, for a bonus of up to (a) 5,000 shares (or $5,000 dollars), upon completion of a review of, the improvement of, the Company’s financial reporting programs, payable in the discretion of the Chief Executive Officer; (b) 7,500 shares (or $10,000) in the event the Company meets certain metrics by June 30, 2020, including achieving a minimum level of gross monthly revenues or achieving an EBITDA profit in any month, payable in the discretion of the Chief Executive Officer; (c) 2,000 shares or $2,000 (in Mr. Taepakdee’s discretion), each quarter that Mr. Taepakdee works with the Chief Executive Officer in order to prepare presentations and other public relations items, payable in the discretion of the Chief Executive Officer; and (d) 3,000 shares (or $4,000) in the event the Company raises more than $3 million during the first 12 months of the agreement, payable in the discretion of the Chief Executive Officer. All shares earned in the first 12 months of the agreement are valued at $2.00 per share. Upon the mutual approval of the executive and the Company, Mr. Taepakdee’s salary may increase to no less than $150,000 per year after the first year.

 


On September 8, 2020, the Company issued Mr. Taepakdee an aggregate of 17,500 shares of common stock of the Company as a bonus in consideration for services rendered, which vested immediately upon issuance.

Effective on January 31, 2021, the compensation of Mr. Taepakdee was increased from $154,000 to $200,000 per year.

 

On February 12, 2021, the Company issued Mr. Taepakdee an aggregate of 10,000 shares of common stock of the Company as a bonus in consideration for services rendered, which vested immediately upon issuance.

 

The agreement has a term of three years, which is mutually extendable with the consent of the parties.

 

In the event that Mr. Taepakdee desires to sell more than 10,000 shares of common stock in any one transaction when the daily volume of the Company’s common stock is 10,000 or less, Mr. Taepakdee is required to provide the Company the first right to purchase such shares.

 

If the agreement is terminated by Mr. Taepakdee for good reason (as defined in the agreement) or by the Company without cause, and other than due to Mr. Taepakdee’s death or disability, Mr. Taepakdee is due two calendar months of severance pay; and if the agreement is terminated due to Mr. Taepakdee’s disability, Mr. Taepakdee, is due compensation through the remainder of the month during which he was terminated. If he is terminated for cause, terminates his employment without good reason or dies, he (or his estate, as applicable) is paid through the date of termination. If the Company terminates the agreement within 24 months after a change in control (as described in the agreement), then the Company is required to pay Mr. Taepakdee a severance payment equal to twelve (12) months’ salary, plus continue to provide benefits equal to those provided prior to the change in control for a period of six (6) months. The agreement contains customary confidentiality requirements and work for hire language. The agreement includes a one year non-solicitation and non-competition clause following the date of the termination of the agreement, which non-competition clause prohibits Mr. Taepakdee (without the prior written consent of the Company which consent will not be unreasonably withheld) from directly or through another person or another entity carrying on or being engaged in any business within North America which is competitive with the business of the Company, however the non-compete shall terminate in the event of a termination of employment by Mr. Taepakdee for good reason or a termination by the Company other than for cause or disability.

 


Mark Vange – Employment Agreement

On July 15, 2021, Mr. Vange entered into an employment agreement with the Company. Pursuant to Mr. Vange’s employment agreement, he agreed to provide services to the Company as the Chief Technology Officer.

Mr. Vange receives a base salary payable in cash ($300,000 per year) pursuant to his employment agreement and is also eligible to receive equity compensation, when approved by the Board and subject to the Company meeting certain metrics as follows – Mr. Vange is eligible, for a bonus of up to (a) 10,000 shares (or $20,000 dollars), upon the Company achieving certain gross monthly revenue targets by August 31, 2021 or February 28, 2022, or an EBITDA profit in any month before February 28, 2022; (b) 20,000 shares (or $40,000) in the event certain milestones for product and website launches and integrations are completed payable in the discretion of the Chief Executive Officer; (c) 60,000 shares (or $155,000) in the event certain new lines of business, greater public recognition, and/or new opportunities are developed by Mr. Vange, payable in the discretion of the Chief Executive Officer, and (d) 60,000 shares (or $155,000) in the event of the successful deployment of certain digital securities offerings, successful implementation of certain online banking solutions and the successful deployment of certain key artificial intelligence capabilities throughout the Company’s business, payable in the discretion of the Chief Executive Officer.

The agreement remains in effect (renewing automatically on a month-to-month basis), until terminated by either party in accordance with its terms, as discussed below.

In the event that Mr. Vange desires to sell more than 10,000 shares of common stock in any one transaction when the daily volume of the Company’s common stock is 10,000 or less, Mr. Vange is required to provide the Company the first right to purchase such shares.

If the agreement is terminated by Mr. Vange for good reason (as defined in the agreement) or by the Company without cause, and other than due to Mr. Vange’s death or disability, Mr. Vange is due two calendar months of severance pay and all shares of Company common stock held in escrow or subject to vesting schedules shall accelerate and/or be released (as applicable); and if the agreement is terminated due to Mr. Vange’s disability, Mr. Vange, is due compensation through the remainder of the month during which he was terminated. If he is terminated for cause, terminates his employment without good reason or dies, he (or his estate, as applicable) is paid through the date of termination. The agreement contains customary confidentiality requirements and work for hire language. The agreement includes a one year non-solicitation and non-competition clause following the date of the termination of the agreement, which non-competition clause prohibits Mr. Vange (without the prior written consent of the Company, which consent will not be unreasonably withheld) from directly or through another person or another entity carrying on or being engaged in any business within North America which is competitive with the business of the Company, however the non-compete shall terminate in the event of a termination of employment by Mr. Vange for good reason or a termination by the Company other than for cause or disability.

Timothy Sikora – Employment Agreement

 

On January 30, 2020, Mr. Timothy Sikora entered into an employment agreement with the Company. Pursuant to Mr. Sikora’s employment agreement, he agreed to provide services to the Company as the Chief Information Officer and Chief Operations Officer.

 

Mr. Sikora currently receives a base salary payable in cash ($200,000236,000 per year) pursuant to his employment agreement and is also eligible to receive equity compensation, when approved by the board of directorsBoard and subject to the Company meeting certain metrics as follows – Mr. Sikora is eligible, for a bonus of up to (a) 10,000 shares (or $10,000 dollars), upon the Company achieving certain gross monthly revenue targets by June 30, 2020 or December 30, 2020, or an EBITDA profit in any month before February 28, 2021; (b) 10,000 shares (or $10,000) in the event certain milestones for product and website launches and integrations are completed during calendar 2020, payable in the discretion of the Chief Executive Officer; and (c) 25,000 shares (or $25,000) in the event the Company completes a merger or acquisition, completes a funding, accelerates profitability or achieves profitability by February 28, 2021, payable in the discretion of the Chief Executive Officer.

 

On September 8, 2020, the Company issued Mr. Sikora an aggregate of 15,000 shares of common stock of the Company as a bonus in consideration for services rendered, which vested immediately upon issuance.


 

The agreement has a term of three years, mutually extendable with the consent of the parties.


In the event that Mr. Sikora desires to sell more than 10,000 shares of common stock in any one transaction when the daily volume of the Company’s common stock is 10,000 or less, Mr. Sikora is required to provide the Company the first right to purchase such shares.

If the agreement is terminated by Mr. Sikora for good reason (as defined in the agreement) or by the Company without cause, and other than due to Mr. Sikora’s death or disability, Mr. Sikora is due two calendar months of severance pay; and if the agreement is terminated due to Mr. Sikora’s disability, Mr. Sikora, is due compensation through the remainder of the month during which he was terminated. If he is terminated for cause, terminates his employment without good reason or dies, he (or his estate, as applicable) is paid through the date of termination. If the Company terminates the agreement within 24 months after a change in control (as described in the agreement), then the Company is required to pay Mr. Sikora a severance payment equal to twelve (12) months’ salary, plus continue to provide benefits equal to those provided prior to the change in control for a period of six (6) months. The agreement contains customary confidentiality requirements and work for hire language. The agreement includes a one year non-solicitation and non-competition clause following the date of the termination of the agreement, which non-competition clause prohibits Mr. Sikora (without the prior written consent of the Company which consent will not be unreasonably withheld) from directly or through another person or another entity carrying on or being engaged in any business within North America which is competitive with the business of the Company, however the non-compete shall terminate in the event of a termination of employment by Mr. Sikora for good reason or a termination by the Company other than for cause or disability.

Donald P. Monaco, Guaranty Compensation Agreement

On October 31, 2018, and effective November 1, 2018, the Company entered into a Guaranty Compensation Agreement with Donald P. Monaco, the Chairman of the Company’s board of directors. Pursuant to the Guaranty Compensation Agreement and in consideration for Mr. Monaco previously providing a personal guaranty to a financial institution in connection with our line of credit with such financial institution, we agreed that for as long as Mr. Monaco continues to serve on the board of directors of the Company and continues to maintain the guaranty (and any future guarantees he may provide), we would pay him a $2,000 per month guarantee fee (the “Guarantee Fee”). In December 2020, the Company repaid its credit agreement with National Bank of Commerce (FKA: Republic Bank), which terminated Mr. Monaco’s guaranty and the Guaranty Compensation Agreement.

Payments Due Upon a Change of Control Under Employment Arrangements with Ms. Boonyawattanapisut, Mr. Kerby, Mr. Taepakdee and Mr. Sikora and Certain Other Employees

As described in greater detail above, the employment agreements with Mr. William Kerby,Ms. Boonyawattanapisut, our ChiefCo-Chief Executive Officer, Mr. Sirapop “KentKerby, our Co-Chief Executive Officer, Mr. Taepakdee, our Chief Financial Officer and Mr. Timothy Sikora, our Chief Operating Agreement,Officer, include provisions which provide that, if such person’s employment with the Company is terminated within twenty-four months after a Change of Control (descried below)(or (or in the case of Mr. Kerby’s agreement, within twenty-four months after, or six months prior to, a Change of Control), then Monakerthe Company is required to pay such executives a severance payment:

As to Ms. Boonyawattanapisut and Mr. Kerby, equal to (i) a lump sum payment in an amount equal to twelve months of histheir base salary at the then current rate (currently $400,000 per year); (ii) all amounts earned, accrued or owing through the date histheir employment is terminated but not yet paid; and (iii) continued participation in all employee benefit plans, programs or arrangements available to the Company executives in which he wasthey were participating on such date of termination of until the earliest of: (a) twelve months after the date of termination of employment; (b) the date the employment agreement would have expired but for the occurrence of the date of termination; or (c) the date, or dates, Ms. Boonyawattanapisut or Mr. Kerby (as applicable) receives similar coverage under a subsequent employer plan. Such payment is required to be made in a lump sum on or before the date ending on the expiration of three months following the date of termination; and

 

 As to Mr. Taepakdee and Mr. Sikora, a severance payment equal to twelve months salary ($200,000 as to Mr. Taepakdee and $200,000$236,000 as to Mr. Sikora), plus continued benefits equal to those provided prior to the Change of Control event for a period of six months.

 


For the purposes of the employment agreements, Change“Change of Control” (‘Control” (“Change in Control’Control” under Mr. Kerby’s agreement) means (a) any entity or person who becomes either individually or, pursuant to an express agreement among all of the members of such group, as part of a control group“control group” (as such term is used in Section 13(d) of the Exchange Act) the beneficial owner of 50% or more of the Company’s voting securities (other than an employee, officer or stockholder of the Company as of the date of such applicable employment agreement) or (b) there is a liquidation of all or substantially all of the Company’s assets or the Company dissolves. We anticipate that the closing of the exchange agreements will constitute a Change of Control under the employment agreements.

It is also grounds for a Good Reason“Good Reason” termination under each of the employment agreements of our officers if, in the case of Ms. Boonyawattanapisut’s and Mr. Kerby’s agreement,agreements, without his consent, the Company materially reduces histheir title, duties or responsibilities and in the case of Mr.Messrs. Taepakdee’s, Sikora’s and Mr. Sikora’sVange’s employment agreements, there is a significant reduction of their duties, position or responsibilities relative to the their duties, position or responsibilities in effect immediately prior to such reduction, or the removal of the executive from such position, duties and responsibilities.

Additionally, in the event Mr. Kerby resigns for Good Reason, we are required to immediately eliminate any and all guarantees which Mr. Kerby has provided on behalf of the Company (which total an aggregate of approximately $2 million as of the date of this Report)Proxy Statement), and in the event we are unable to eliminate all such guarantees within 30 days, we are required to pay Mr. Kerby $10,000 per month in guaranty fees (compared to $2,000 per month under the current terms of the employment agreement) until such time as such guarantees are eliminated. Finally, in the event Mr. Kerby resigns for Good Reason, Mr. Kerby is due the same severance compensation described above in connection with a Change of Control termination.

In the event Mr.Messrs. Taepakdee, Sikora or Mr. SikoraVange terminates his employment agreement for Good Reason, we are required to pay such applicable executive his salary and other benefits earned or accrued through the date of termination, and continue to pay them two additional months of salary.

Certain employment agreements of other non-executive officers of the Company contain similar provisions as Mr.Messrs. Taepakdee’s, Sikora’s and Mr. Sikora’sVange’s agreements, discussed above.

Outstanding Equity Awards at Fiscal Year-End

None. 


 

There will be no changes to Mr. Kerby’s, Mr. Taepakdee’s or Mr. Sikora’s employment agreements in connection with the closing of the HotPlay Exchange Agreement and it is anticipated that each of such persons will, as part of such assumption, agree to waive any Change of Control or Good Reason termination rights associated with the share exchanges, the Change of Control associated therewith, provided that in the event any such persons refuse to waive such terms, the Company could owe such persons significant consideration upon a termination of their employment prior to, or subsequent to, the HotPlay Exchange Agreement.

  

Director Compensation

The following table sets forth information concerning the total compensation that we have paid or that has accrued on behalf of our non-executive directors during the fiscal year ended February 28, 2021.2022. Our executive directors do not receive compensation for their service on the board of directors separate from the compensation they receive as an executive officer of the Company, as described above.

Name 

Fiscal 

Year 

  

Fees 

Earned 

  

Stock  

Awards* 

  

Option 

Awards 

  All other Compensation  Total 
Pasquale “Pat” LaVecchia, Director  2021  $  $53,563  $  $  $53,563 
Donald P. Monaco, Chairman  2021  $  $64,275  $  $18,000(1) $82,275 
Doug Checkeris, Director  2021  $  $53,563  $  $  $53,563 
Simon Orange, Director  2021  $  $42,850  $  $  $42,850 
Rupert Duchesne, Director  2021  $  $42,850  $  $  $42,850 
Robert “Jamie” Mendola, Jr., Director  2021  $  $53,563  $  $  $53,563 
Alexandra C. Zubko, Director  2021  $  $42,850  $  $  $42,850 

 


Name Fiscal
Year
 Fee 
Earned
  Stock
Awards
  All other
Compensation
  Total 
J. Todd Bonner 2022 $  $  $  $ 
Donald P. Monaco, Director 2022 $  $41,917  $  $41,917 
Athid Nanthawaroon 2022 $  $40,000  $  $40,000 
Komson Kaewkham 2022 $  $44,292  $  $44,292 
Yoshihiro Obata 2022 $  $50,000  $  $50,000 
Carmen Diges 2022 $  $50,000  $  $50,000 
Farooq Moosa 2022 $  $16,333  $  $16,333 
Edward Terrence Gardner, Jr. 2022 $  $16,125  $  $16,125 
Stacey Riddell(1) 2022 $  $26,875  $  $26,875 

No director received any Non-Equity Incentive Plan Compensation or Non-Qualified Deferred Compensation for the period above.
*The value of the Stock Awards in the table above was calculated based on the fair value of such securities calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718.

(1)Represents amounts paid underMs. Riddell resigned from her position as a director on the Guaranty Compensation Agreement described above under “Donald P. Monaco, Guaranty Compensation Agreement”, which agreement was terminated automatically uponBoard on November 9, 2021. She received pro rata compensation for services provided prior to her resignation in the repayment of the Company’s debt owed to National Bank of Commerce (FKA: Republic Bank) in December 2020.fiscal year ended February 28, 2022.

 

No director received any Non-Equity Incentive Plan Compensation or Non-Qualified Deferred Compensation for the period above.

Director Compensation Policy

 

ThePrior to July 1, 2021, the compensation payable to the board of directors currently consistsBoard consisted solely of equity, and includesincluded (a) compensation of 20,000 shares per year, issuable at the rate of 1/4th of such sharesin equal quarterly installments, to each non-executive member of the Board; (b) compensation of 5,000 shares per year, issuable at the rate of 1/4th of such sharesin equal quarterly installments, to each Chairpersonchairperson of each Board committee of the Board;committee; and (c) compensation of 10,000 shares per year, issuable at the rate of ¼th of such sharesin equal quarterly (provided that compensation for the 2022 fiscal year were issued in April 2021, and vest at the rate of 1/4th of such shares quarterly),installments, to the Chairman of the Board, each under the terms of the Company’s 2017 Equity Incentive Plan (collectively, the “Board Compensation Terms”).

Effective July 1, 2021, we implemented changes to our Board Compensation Terms”).Terms. The compensation currently payable to the Board currently consists of a mix of equity and cash, subject to certain exceptions (as discussed below), and includes (a) compensation in the amount of $60,000 per year, payable in equal quarterly installments, to each non-executive member of the Board; (b) compensation in the amount of $15,000 per year, payable in equal quarterly installments, to the chairperson of each committee of the Board; and (c) compensation in the amount of $30,000 per year, payable in equal quarterly installments, to the chairman of the Board. The foregoing amounts shall be paid out as follows: (i) in the event that the company is profitable for the two quarters prior to any given quarterly payment, then (a) 30% of the compensation is to paid in cash and (b) 70% of the compensation is issued in shares of Company common stock, calculated based on the closing price of the Company’s common stock on the date of the award; or (ii) in the event that the company is not profitable for the two quarters prior to any given quarterly payment, then 100% of the relevant quarterly payment will be issued in shares of Company common stock, calculated based on the closing price of the Company’s common stock on the date of the award. All equity issued to our directors as compensation for their services is issued under the Company’s equity incentive plans.

Director compensation for the 2022 fiscal year (based on the old compensation policy) was paid in shares of Company common stock in April 2021 (for those directors who were members of the Board as of such date), which shares vest in equal quarterly installments. Our directors are entitled to receive additional compensation payable under the new compensation policy for fiscal 2022, which shall be payable on a pro rata basis starting on July 1, 2021 and shall take into account the payments already made to them under the old compensation policy in April 2021.


Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 

Principal Stockholders, Directors and Management

The following table sets forth, certain information regardingas of May 31, 2022, the beneficial ownershipnumber and percentage of outstanding shares of our common stock as of May 29, 2021 (the “Date of Determination”), by (i) each Named Executive Officer, (ii) each member of our board of directors, (iii)beneficially owned by: (a) each person deemedwho is known by us to be the beneficial owner of more than five percent (5%) of any class5% of our capital stock, and (iv) alloutstanding shares of common stock; (b) each of our directors; (c) our named executive officers; and (d) all current directors, our director nominees and executive officers, and directors as a group. As May 31, 2022, there were 117,436,081 shares of common stock issued and outstanding.

 

Beneficial ownership has been determined in accordance with Rule 13d-3 under the Exchange Act. Under this rule, certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire shares (for example, upon exercise of an option or warrant or upon conversion of a convertible security) within 60 days of the Date of Determination.May 31, 2022. In computing the percentage ownership of any person, the amount of shares is deemed to include the amount of shares beneficially owned by such person by reason of such acquisition rights. As a result, the percentage of outstanding shares of any person as shown in the following table does not necessarily reflect the person’s actual voting power at any particular date.

 

The Company’s Series B Preferred Stock and Series C Preferred Stock is non-voting, and is not convertible into common stock until the HotPlay Exchange Agreement has closed, the timing of which is unknown, and as such, the ownership of such preferred stock has not been included in the table below.

To our knowledge, except as indicated in the footnotes to this table and pursuant to applicable community property laws, (a) the persons named in the table have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them, subject to applicable community property laws; and (b) no person owns more than 5% of our common stock. Unless otherwise indicated, the address for each of the officers or directors listed in the table below is 1560 Sawgrass Corporate Parkway, Suite 130, Sunrise, Florida 33323.

 


Name of Beneficial Owner 

 

Shares of Common Stock 

Beneficially Owned (1) 

 

  

 

Percent of 

Common Stock 

(2) 

 

 
Executive Officers and Directors      
William Kerby  2,999,072(3)(4)  12.7%
Sirapop “Kent” Taepakdee  27,500  ��  *  
Tim Sikora  27,000     *  
Donald P. Monaco  1,994,034(5)  8.5%
Simon Orange  481,649(6)  2.0%
Pasquale “Pat” LaVecchia  177,232     *  
Doug Checkeris  161,250     *  
       Rupert Duchesne  50,833     *  
       Robert “Jamie” Mendola, Jr.  526,439   2.2%
Alexandra C. Zubko  47,055     *  
         
All Executive Officers and Directors as a Group (10 persons)  6,492,064   27.7%
         
5% Stockholders        
         
IDS, Inc. (7)  1,968,000(4)  8.4%
Name of Beneficial Owner Shares of
Common
Stock
Beneficially
Owned (1)
  Percent of
Common
Stock
Outstanding (2)
 
Named Executive Officers and Directors      
William Kerby, Co-Chief Executive Officer & Director  651,173(3)  * 
Nithinan Boonyawattanapisut, Co-Chief Executive Officer & Director  19,928,658(4)  16.9%
Sirapop “Kent” Taepakdee, Chief Financial Officer  27,500   * 
Tim Sikora, Chief Information Officer  31,000(5)  * 
Andrew Greaves, Chief Operating Officer  100,000   * 
Mark Vange, Chief Technology Officer  3,916,667(6)  3.3 
Donald P. Monaco, Director  2,028,520(7)  1.7%
John Todd Bonner, Chairman of the Board  19,928,658(4)  16.9%
Athid Nanthawaroon, Director  147,065   * 
Carmen Diges, Director  58,831   * 
Komson Kaewkham, Director  53,910   * 
Yoshihiro Obata, Director  808,831(8)  * 
Farooq Moosa, Director  25,338   * 
Edward Terrence Gardner, Jr., Director  657,203   * 
All Named Executive Officers and Directors as a Group (14 persons)  28,434,696(9)  24.1%
         
5% Stockholders        
Red Anchor Trading Corp. Limited (10)  15,000,269   12.7%

 

* Less than 1%.

*Less than 1%.

  

(1)Includes options, warrants and convertible securities exercisable or convertible for common stock within 60 days of the Date of Determination.May 31, 2022.

(2)Before offering percentages are based
(2)Based on 24,454,203117,436,081 shares of common stock outstanding as of the Date of Determination.May 31, 2022.

 


(3)William Kerby holds 670,872555,873 shares of common stock and warrants to purchase 15,300 shares of common stock of the Company individually. Mr. Kerby is deemed to own 80,000 shares held by In-Room Retail Systems, LLC, which entity he owns. On April 7, 2021, the board of directors of the Company, consistent with Mr. Kerby’s employment agreement, which provides for Mr. Kerby to receive a base salary of $400,000 per year, and an annual bonus payable at the discretion of the board of directors, of up to 100% of his base salary (50% based on meeting short term goals and 50% based on meeting long-term goals), and other bonuses which may be granted from time to time in the discretion of the board of directors, agreed to award Mr. Kerby a discretionary bonus for fiscal 2021 of $400,000, which is payable in cash or shares of common stock, at Mr. Kerby’s option, under the Company’s Amended and Restated 2017 Equity Incentive Plan (the “Plan”), with a conversion price of $3.02 per share, the closing sales price of the Company’s common stock on the date the board of directors approved such bonus. If Mr. Kerby exercises his right to receive the entire bonus in shares of common stock, he would be due 132,450 shares of common stock, which shares of common stock are included in his beneficial ownership above. Does not include any shares of common stock issuable upon conversion of that certain Convertible Promissory Note in the amount of $430,889, which accrues interest at the rate of 12% per annum, compounded monthly at the end of each calendar month, with such interest payable at maturity or upon conversion. The principal and accrued interest owed under the Convertible Promissory Note is convertible, at the option of the holder thereof, into shares of the Company’s common stock, at any time beginning seven days after the date the HotPlay Exchange Agreement closes and prior to the payment in full of such Convertible Promissory Note by the Company, at a conversion price equal to the greater of (i) the closing consolidated bid price of the Company’s common stock on April 8, 2021 (which was $3.02); and (ii) the five-day volume weighted average price of the Company’s common stock for the five trading days following the date that the HotPlay Exchange Agreement closes. The Convertible Promissory Notes are unsecured, have a maturity date of April 7, 2022, and include standard and customary events of default.  As the closing date of the HotPlay Exchange Agreement is currently unknown, such shares of common stock issuable upon conversion of the Convertible Promissory Note has not been included in the shareholders beneficial ownership in the table above.


(4)Effective on May 18, 2021, IDS entered into a Shareholder Voting Representation Agreement with Mr. Kerby. Pursuant to the Shareholder Voting Agreement, IDS provided Mr. Kerby the right to, and an irrevocable proxy to, vote all of the IDS Shares held by IDS at any meeting of stockholders of the Company and/or via any written consent of stockholders of the Company. The Shareholder Voting Agreement remains in place until the earlier of the fifth anniversary of the Shareholder Voting Agreement; the disposition of the IDS Shares pursuant to the IP Purchase Amendment; a change of control of Monaker resulting in persons prior to such transaction obtaining more than 50% voting control of the Company following such transaction; the sale of all or substantially all of the assets of the Company; or termination of the agreement by Mr. Kerby. Mr. Kerby may also assign his rights under the agreement to another party and/or the Company may assign Mr. Kerby’s rights under the agreement if Mr. Kerby is unable to make such assignment due to his death or disability. Mr. Kerby was provided the voting rights as the shareholder representative of, and for the benefit of, the Company. The 1,968,000 shares of common stock are included both in Mr. Kerby’s ownership above, due to his rights to vote such shares, and IDS’ ownership above, because IDS has the power to dispose of such shares, subject to certain contractual lockup rights.  
  
(5)(4)Nithinan Boonyawattanapisut and John Todd Bonner are married. Accordingly, they beneficially own the same securities of the Company. Ms. Boonyawattanapisut’s and Mr. Bonner’s holdings consist of the following: (i) 2,300,204 shares of common stock held directly by Ms. Boonyawattanapisut; (ii) 27,500 shares of common stock held directly by Mr. Bonner; (iii) 13,666,936 shares of common stock held by Red Anchor Trading Corporation (“Red Anchor”), 10.91% of which is owned by Ms. Boonyawattanapisut and 19.77% of which is owned by Mr. Bonner; (iv) 1,333,333 shares of common stock NextPlay Holdings LLC, 73.3% of which is owned by Red Anchor; (v) 1,558,046 shares of common stock held by Cern One Limited, 100% of which is owned by Ms. Boonyawattanapisut, and (vi) 1,042,639 shares of common stock held by Found Side Ltd., 50% of which is owned by Ms. Boonyawattanapisut and 48% of which is owned by Mr. John Todd Bonner.
(5)Tim Sikora holds 28,000 shares of common stock individually, and is deemed to own 3,000 shares of common stock held by Beachfront Travel Consulting, LLC, a company that is 50% owned by Mr. Sikora’s spouse. Mr. Sikora disclaims beneficial ownership of those shares held by Beachfront.
(6)Mark Vange beneficially owns (i) 1,666,667 shares of common stock owned by Fighter Base Publishing, Inc (“Fighter Base”), and (ii) 1,250,000 shares owned by Token IQ, Inc. (“Token IQ”). Mr. Vange is the Chief Executive Officer and a majority stockholder of both Fighter Base and Token IQ, and disclaims beneficial ownership of all shares owned by Fighter Base and Token IQ, except to the extent of his pecuniary interest therein. Mr. Vange also individually owns 1,000,000 shares of common stock of the Company.
(7)Donald P. Monaco beneficially owns (i) 934,224 shares of common stock owned by the Donald P. Monaco Insurance Trust (the Trust“Trust”), and (ii) 822,302 shares are beneficially owned by Monaco Investment Partners II, LP (“MI PartnersPartners”). Mr. Monaco also individually owns 237,508271,994 shares of common stock of the Company. Mr. Monaco is the managing general partner of MI Partners and trustee of the Trust. Mr. Monaco disclaims beneficial ownership of all shares held by the Trust and MI Partners in excess of his pecuniary interest, if any. Does not include any
(8)Yoshihiro Obata’s holdings consist of 808,831 shares of common stock issuable upon conversion of that certain Convertible Promissory Note inheld by Global Networking, LLC, an entity owned and controlled by Mr. Obata.
(9)Because Ms. Boonyawattanapisut and Mr. Bonner beneficially own the amount of $585,425, which accrues interest at the rate of 12% per annum, compounded monthly at the end of each calendar month, with such interest payable at maturity or upon conversion. The principal and accrued interest owed under the Convertible Promissory Note is convertible, at the option of the holder thereof, into shares of the Company’s common stock, at any time beginning seven days after the date the HotPlay Exchange Agreement closes and priorsame securities due to the payment in fullfact that they are married, such securities have only been included once for purposes of such Convertible Promissory Note bycalculating the Company, at a conversion price equal to the greaternumber of (i) the closing consolidated bid price of the Company’s common stock on April 8, 2021 (which was $3.02); and (ii) the five-day volume weighted average price of the Company’s common stock for the five trading days following the date that the HotPlay Exchange Agreement closes. The Convertible Promissory Notes are unsecured, have a maturity date of April 7, 2022, and include standard and customary events of default.  As the closing date of the HotPlay Exchange Agreement is currently unknown, such shares of common stock issuable upon conversion ofheld by all executive officers and directors as a group.
(10)Address: Morgan & Morgan Building, Pasea Estate, PO Box 958, Road Town, Tortola, BVI. The shares are also beneficially owned by Ms. Boonyawattanapisut’s and Mr. Bonner, as discussed in footnote 4, above. Based on information reported on Schedule 13D/A filed by Red Anchor (and others) with the Convertible Promissory NoteSEC on March 28, 2022, which has not been included in the shareholders beneficial ownership in the table above.independently verified.

(6)Simon Orange holds 234,542 shares of common stock individually. Mr. Orange is deemed to own 186,557 shares of common stock and warrants to purchase 60,550 shares of common stock of the Company held by Charcoal Investment LTD, which entity he owns.

(7)Address: 21781 Ventura Blvd Ste. 231, Woodland Hills, California 91634. The shares held in the name of IDS, Inc. are beneficially owned by Ari Daniels, the Chief Executive Officer of IDS, Inc. (“IDS”). Effective on May 18, 2021, the Company, IDS, TD Asset and Ari Daniels, the principal of IDS, entered into an Amendment to Intellectual Property Purchase Agreement. Pursuant to the IP Purchase Agreement, the parties amended the IP Purchase Agreement, with the Company agreeing to make a payment to IDS in the amount of $2,850,000, payable by way of an initial payment of $500,000, and twelve monthly payments of approximately $195,833, with such monthly payments beginning 30 days after the initial payment, which is due seven days after the date of the IP Purchase Amendment, which has been made to date. Such monthly payments may be pre-paid at any time without penalty. At the Company’s option, any portion of the amount due may be paid to IDS by a party separate from the Company (either a related party of Monaker or a third-party), for the benefit of Monaker, which shall be treated for all purposes as a payment by Monaker. As consideration for such Paying Party making such payment on behalf of Monaker, IDS agreed to transfer the Paying Party a number of the IDS Shares equal to the amount of the cash payment(s) made by a Paying Party multiplied by 0.6888 as to the first $500,000 payment (which payment has been made, but which shares have not been transferred to the Company to date), and 0.691 as to the monthly payments (as applicable, the “Applicable Portion” of the IDS Shares).Upon each payment of amounts due to IDS pursuant to the terms of the IP Agreement Amendment as discussed above by Monaker (instead of a Paying Party), IDS agreed to transfer the portion of the IDS Shares equal to the Applicable Portion, to the Company. Until such time as the IDS Shares are no longer held by IDS, IDS agreed not to transfer or encumber any of such shares, except pursuant to the terms of the IP Purchase Amendment. See also Footnote (4).

 


Changes in Control

The Company is not currently aware of any arrangements which may at a subsequent date result in a change of control of the Company, except that as in connection with the Share Exchanges, as discussed above under “Item 1. Business—Recent Material Events—HotPlay and Axion Share Exchanges”, which provide that, upon the closing of the HotPlay Share Exchange, the former HotPlay Stockholders will be issued 52,000,000 shares of the Company’s common stock in exchange for 100% of the outstanding shares of HotPlay, and the outstanding shares of Series B Convertible Preferred Stock and Series C Convertible Preferred Stock (certain of which are also HotPlay Stockholders) will automatically convert into an aggregate of 11,246,200 shares of our common stock, which will result in such former HotPlay Stockholders obtaining voting control over the Company.

As part of the closing of the HotPlay Share Exchange, and effective upon the closing of such HotPlay Share Exchange, the board of directors will consist of a combination of current members and new members of the board of directors, subject to the terms of the HotPlay Exchange Agreement as may be amended from time to time.

The closing of the HotPlay Share Exchange is subject to customary closing conditions as discussed above.

Equity Compensation Plan Information

 

2017 Equity Incentive Plan

On August 25, 2017, the board of directorsBoard adopted, subject to the ratification by the majority stockholders, which occurred effective on September 13, 2017, the Company’s Amended and Restated 2017 Equity Incentive Plan (the Plan” or the “2017 Plan“2017 Plan”). The 2017 Plan is intended to secure for the Company the benefits arising from ownership of the Company’s common stock by the employees, officers, directors and consultants of the Company, all of whom are, and will be, responsible for the Company’s future growth. The 2017 Plan is designed to help attract and retain for the Company, qualified personnel for positions of exceptional responsibility, to reward employees, officers, directors and consultants for their services to the Company and to motivate such individuals through added incentives to further contribute to the success of the Company.

 


The 2017 Plan provides an opportunity for any employee, officer, director or consultant of the Company, subject to any limitations provided by federal or state securities laws, to receive (i) incentive stock options (to eligible employees only); (ii) nonqualified stock options; (iii) restricted stock; (iv) stock awards; (v) shares in performance of services; or (vi) any combination of the foregoing. Incentive stock options granted under the 2017 Plan are intended to qualify as incentive“incentive stock optionsoptions” within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the Code“Code”). Nonqualified (non-statutory stock options) granted under the 2017 Plan are not intended to qualify as incentive stock options under the Code.

 

No incentive stock option may be granted under the 2017 Plan to any person who, at the time of the grant, owns (or is deemed to own) stock possessing more than 10% of the total combined voting power of our Company or any affiliate of our Company, unless the exercise price is at least 110% of the fair market value of the stock subject to the option on the date of grant and the term of the option does not exceed five years from the date of grant.

 

The 2017 Plan is administered by the board of directors of the CompanyBoard and/or the Company’s Compensation Committee. Subject to adjustment in connection with the payment of a stock dividend, a stock split or subdivision or combination of the shares of common stock, or a reorganization or reclassification of the Company’s common stock, the maximum aggregate number of shares of common stock which may be issued pursuant to awards under the 2017 Plan is 2,000,000 shares. Such shares of common stock shall be made available from the authorized and unissued shares of the Company.

 

2021 Equity Incentive Plan

On April 7, 2021, stockholders approved the adoption of the Company’s 2021 Equity Incentive Plan (the 2021 Plan“2021 Plan”), which is intended to secure for the Company and its affiliates the benefits arising from ownership of the Company’s common stock by the employees, officers, directors and consultants of the company and its affiliates, all of whom are and will be responsible for the Company’s future growth. The 2021 Plan is designed to help attract and retain for the Company and its affiliates personnel of superior ability for positions of exceptional responsibility, to reward employees, officers, directors and consultants for their services and to motivate such individuals through added incentives to further contribute to the success of the Company and its affiliates. Awards under the 2021 Plan may be made to an eligible person in the form of (i) incentive stock options (to eligible employees only); (ii) nonqualified stock options; (iii) restricted stock; (iv) stock awards; (v) performance shares; or (vi) any combination of the foregoing. TheNonqualified (non-statutory stock options) granted under the 2021 Plan are not intended to qualify as incentive stock options under the Code.

Subject to adjustment in connection with the payment of a stock dividend, a stock split or subdivision or combination of the shares eligible for futureof common stock, or a reorganization or reclassification of the Company’s common stock, the aggregate number of shares of common stock which may be issued pursuant to awards under the 2021 will bePlan is the sum of (i) 13,065,060 shares, which amount is equal (i)to 15% of the Company’s total outstanding shares of common stock of the Company outstanding immediately after the closing of the HotPlay Share Exchange and conversion of the Axion preferred stock, and (ii) an annual increase on April 1st of each calendar year, beginning in 2022 and ending in 2030, in each case subject to the approval of the board of directorsBoard or the compensation committeeCompensation Committee of the Company on or prior to the applicable date, equal to the lesser of (A) 5% of the total shares of common stock of the Company outstanding on the last day of the immediately preceding fiscal year; (B) 5,000,000 shares of common stock;stock (which number is not subject to adjustment in connection with any reverse stock split affected prior to the closing); and (C) such smaller number of shares as determined by the board of directors or Compensation Committee (the Share Limit“Share Limit”), also known as an “evergreen” provision. Notwithstanding the foregoing, shares added to the Share Limit are available for issuance as incentive stock options only to the extent that making such shares available for issuance as incentive stock options would not cause any incentive stock option to cease to qualify as such. In the event that the board of directors or the Compensation Committee does not take action to affirmatively approve an increase in the Share Limit on or prior to the applicable date provided for under the plan, the Share Limit remains at its then current level. Notwithstanding the above, no more than 50,000,000 (which number is not subject to adjustment in connection with any reverse stock split affected prior to the closing) incentive stock options may be granted pursuant to the terms of the 2021 Plan. The Company’s Board and Compensation Committee did not elect to increase the number of shares authorized for issuance under the 2021 Plan on April 1, 2022 in accordance with the evergreen” provision. provision, discussed above.

 


The 2021 Plan is administered by the Board and/or the Company’s Compensation Committee. The 2021 Plan will automatically terminate on the 10th anniversary of original approval date of the 2021 Plan (January 5, 2031).

Equity Compensation Plan Information

The following table provides certain aggregate information with respect to all of our equity compensation plans in effect as of February 28, 2021: 2022:

 

Plan category Number of securities
to be issued upon
exercise of
outstanding options,
warrants and rights as
of February 28, 2021
 Weighted-average
exercise price of
outstanding options,
warrants and rights
 Number of
securities remaining
available for future
issuance under
equity
compensation plans
(excluding securities
reflected in column
(a))
  (a) (b) (c)
Equity compensation plans approved by security holders   $  1,336,279
Equity compensation plans not approved by security holders  206,720 $3.10  
Total  206,720 $3.10  1,336,279
Plan category Number of securities
to be issued upon
exercise of
outstanding warrants
as
of February 28,
2022
  Weighted-average
exercise price of
outstanding warrants
  Number of
securities remaining
available for future
issuance under
equity
compensation plans
(excluding securities
reflected in column
(a))
 
  (a)  (b)  (c) 
Equity compensation plans approved by security holders  15,300  $        2.05        — 
Equity compensation plans not approved by security holders         
Total  15,300  $2.05    

Item 13. Certain Relationships and Related Transactions, and Director Independence.

 

Except as discussed below or otherwise disclosed above under Item“Item 11. Executive CompensationCompensation”Summary“Summary Executive Compensation TableTable”, Employment“Employment and Compensation AgreementsAgreements”, and Director Compensation“Director Compensation”, which information is incorporated by reference where applicable in this Certain“Certain Relationships and Related Transactions, and Director IndependenceIndependence” section, the following sets forth a summary of all transactions, since the beginning of the fiscal year of 2019, or any currently proposed transaction, in which the Company was to be a participant since the beginning of the Company’s 2021 fiscal year and the amount involved exceeded or exceeds the lesser of $120,000 or one percent of the average of the Company’s total assets at the fiscal year-end for 20212022 and 2020,2021, and in which any Related Person had or will have a direct or indirect material interest. We believe the terms obtained or consideration that we paid or received, as applicable, in connection with the transactions described below were comparable to terms available or the amounts that would be paid or received, as applicable, in arm’s-length transactions. Related Persons“Related Persons” include each of our Named“Named Executive OfficersOfficers” as defined under Item“Item 11. Executive CompensationCompensation”Summary“Summary Executive Compensation TableTable”, above, each person who was serving on our board of directors as of the date that the related party transaction occurred, and IDS, Inc., which is a greater than 5% shareholder of the Company.above.

 

Related Party Transactions

Dividends in arrears on the previously outstanding Series A Preferred Stock shares totaled $1,102,066 as of August 21, 2020, May 31, 2020, February 29, 2020 and February 28, 2019. These dividends were payable when and if declared by the board of directors.Board. The dividends were owed to an entity controlled by Donald P. Monaco, our director (and prior Chairman of the Board), and William Kerby, our CEOCo-Chief Executive Officer and a director. On April 8, 2021, the Company entered into an Exchange Agreement with WilliamMr. Kerby its Chief Executive Officer and director and Monaco Investment Partners II, LP (“MI PartnersPartners”), of which Donald P.Mr. Monaco (who served as the Chairman of our Board at that time) is the managing general partner and the Chairman of the board of directors of the Company (the Exchange Agreement“Exchange Agreement”). Pursuant to the Exchange Agreement, the terms of which were approved by the board of directors of the Company,Board, Mr. Kerby and MI Partners exchanged their right to an aggregate of $1,016,314 in accrued dividends (the Accrued Dividends“Accrued Dividends”), which had accrued on the Company’s outstanding Series A Preferred Stock, which had been held by Mr. Kerby and MI Partners prior to the conversion of such Series A Preferred Stock into common stock of the Company in August 2017, for Convertible Promissory Notes. Specifically, Mr. Kerby exchanged rights to $430,889 of accrued dividends on the Series A Preferred Stock for a Convertible Promissory Note with a principal balance of $430,889 and MI Partners exchanged rights to $585,425 of accrued dividends on the Series A Preferred Stock for a Convertible Promissory Note with a principal balance of $585,425 (the Convertible“Convertible Promissory NotesNotes”).

 


The Convertible Promissory Notes accrueaccrued interest at the rate of 12% per annum, compounded monthly at the end of each calendar month, with such interest payable at maturity or upon conversion. The principal and accrued interest owed under the Convertible Promissory Notes iswas convertible, at the option of the holders thereof, into shares of the Company’s common stock, at any time beginning seven days after the Closing Date (defined below) and prior to the payment in full of such Convertible Promissory Notes by the Company, at a conversion price equal to the greater of (i) the closing consolidated bid price of the Company’s common stock on April 8, 2021 (which was $3.02); and (ii) the five-day volume weighted average price of the Company’s common stock for the five trading days following the date that the HotPlay Exchange Agreement closes.

(i)the closing consolidated bid price of the Company’s common stock on April 8, 2021 (which was $3.02); and
(ii)(ii) the five-day volume weighted average price of the Company’s common stock for the five trading days following the date that the HotPlay Exchange Agreement closes (the “Closing Date”). The Convertible Promissory Notes were unsecured, had a maturity date of April 7, 2022, and included standard and customary events of default.

The Convertible Promissory Notes are unsecured, have a maturity date of April 7, 2022, and include standard and customary events of default.

On October 29, 2019, the Company entered into Promissory Notes with Robert “Jamie” Mendola, Jr. (a Director of the Company) and Pasquale “Pat” LaVecchia (a Director of the Company) in the amounts of $150,000 and $25,000, respectively (the “Director Notes”). The Director Notes have an interest rate of 12% per annum (18% upon the occurrence of an event of default) and were originally due and payable on February 1, 2020, but were subsequently extended as discussed below, provided that the notes may be prepaid at any time without penalty (provided that all interest that would have been due had the notes remained outstanding through maturity must be paid at the time of repayment). The Company paid a 2% original issue discount in connection with the notes.

On December 9, 2019, the Company entered into an Amended and Restated Promissory Note with the Monaco Trust, in the amount of up to $2,700,000 (the “Revolving Monaco Trust Note”). The Revolving Monaco Trust Note amended and restated a previous promissory Note entered into by the Company in favor of the Monaco Trust on February 4, 2019 (the 2019 Monaco Trust Note discussed above), in the amount of up to $700,000, which had a balance as of December 9, 2019 of $700,000. On the same date, the Company borrowed $200,000 from the Monaco Trust under the Revolving Monaco Trust Note. On December 27, 2019 and February 12, 2020, the Company borrowed an additional $300,000 and $200,000, respectively, from the Monaco Trust under the Revolving Monaco Trust Note, which had a balance of $1,200,000 as of February 29, 2020.

On January 22, 2020, the Company entered into Stock Purchase Agreements with William Kerby, the Chief Executive Officer and director of the Company (“Kerby”), (the “Purchaser” and the “Stock Purchase Agreement”). Pursuant to the Stock Purchase Agreement, the Company agreed to sell the Purchaser 1,562,500 shares of restricted Series A Convertible Preferred Stock of Verus International, Inc. (formerly known as RealBiz Media Group, Inc. (“Verus”), which the Company then held (out of the 31,970,101 shares of Series A Convertible Preferred Stock of Verus which the Company then held) for an aggregate of $25,000, or $0.016 per share. The purchase price for the Verus shares was determined by the Board of Directors of the Company, based on among other things, the recent trading prices of Verus’ common stock on the OTCQB Market, as publicly reported. The sale contemplated by the Stock Purchase Agreement closed on January 22, 2020.

On January 29, 2020, the Company entered into first amendments to the Director Notes and Revolving Monaco Trust Note with the directors and the Monaco Trust, respectively, to extend the maturity date of such notes from February 1, 2020 to April 1, 2020 (the “Note Amendments”). No other changes were made to such notes as a result of such amendments.


On March 13, 2020 and March 26, 2020, the Company borrowed an additional $100,000 and $75,000, respectively, from the Monaco Trust pursuant to the terms of the Revolving Monaco Trust Note.

On March 27, 2020, the Company entered into second amendments to the Director Notes to extend the maturity date of such Director Notes from April 1, 2020 to June 1, 2020, and entered into an amendment to extend the due date of the Revolving Monaco Trust Note from April 1, 2020 to December 1, 2020. All remaining terms of the promissory notes remained unchanged.

On April 17, 2020, the Company paid off the Promissory Note with Pasquale “Pat” LaVecchia, a member of the board of directors, in the amount of $26,225 (the principal of $25,000 and the interest of $6,225).

On April 27, 2020, the Company filed a verified complaint for injunctive relief against IDS (a greater than 5% stockholder of the Company) and certain other defendants affiliated with IDS in the Circuit Court of the Seventeenth Judicial Circuit in and for Broward County, Florida. Pursuant to the complaint, the Company alleges causes of action against the defendants, including IDS, based on among other things, fraud, conspiracy to commit fraud, aiding and abetting fraud, rescission, and breach of contract, and seeks a temporary and permanent injunction against the defendants, requiring such persons to return the 1,968,000 shares of common stock disclosed above to the Company and preventing such persons from selling or transferring any shares, seeks damages from the defendants, rescission of the IP Purchase Agreement pursuant to which the shares were issued, attorneys fees and other amounts. The complaint was filed as a result of IDS’s failure to deliver certain intellectual property assets which were acquired by the Company from IDS in August 2019, certain other actions of IDS and the other defendants which the Company alleges constitutes fraud and to seek to unwind the IP Purchase Agreement and provide damages to the Company due to IDS’s and the other defendants’ breaches thereunder.

On March 13, 2020 and March 26, 2020, the Company borrowed an additional $100,000 and $75,000, respectively, from the Monaco Trust pursuant to the terms of the Revolving Monaco Trust. On June 9, 2020 and June 10, 2020, the Company borrowed an additional $300,000 and $50,000, respectively, from the Monaco Trust. On July 7, 2020 and July 20, 2020, the Company borrowed an additional $250,000 and $50,000, respectively, from the Monaco Trust. On July 27, 2020, the Company paid principal of $50,000 and accrued interest of $49,784. On September 22, 2020, the Company made a payment of $200,000 under the Revolving Monaco Trust Note, including $142,408 of principal and $57,592 of interest owed thereunder.

On May 1, 2020, the Company paid off the Promissory Note with Robert “Jamie” Mendola, Jr., in the amount of $157,595 (the principal of $150,000 and the interest of $7,595).

On June 9, 2020, June 10, 2020, July 7, 2020, we borrowed an additional $300,000, $50,000 and $250,000 from the Monaco Trust under the Revolving Monaco Trust Note.

On November 6, 2020, the Company entered into a third amendment to the Revolving Trust Note with the Monaco Trust, to extend the maturity date of such Revolving Monaco Trust Note to February 28, 2021. No other changes were made to such note as a result of such amendment.

On November 16, 2020, the Company entered into a fourth amendment to the Revolving Trust Note with the Monaco Trust, to increase the amount available under such Revolving Monaco Trust Note to $2,800,000. No other changes were made to such note as a result of such amendment.

On December 1, 2020, the Company paid $800,000 of principal and interest due under the Revolving Trust Note.

The Revolving Trust Note was subsequently repaid in full in December 2020, with funds raised through our December 2020 underwritten offering.

On September 8, 2020, the Company issued Sirapop “Kent” Taepakdee, then Acting Chief Financial OfficerMarch 2022, and Vice President of Finance (Principal Financial and Accounting Officer) and Timothy Sikora, the Chief Operating Officer and Chief Information Officer of the Company, an aggregate of 17,500 and 15,000 shares of common stock of the Company, respectively, as a bonus in consideration for services rendered. The issuances were authorized by the board of directors and the Compensation Committee of the board of directors of the Company, and granted under the Company’s 2017 Amended and Restated Equity Incentive Plan. The shares vested immediately upon issuance.are no longer outstanding.

 


On September 1, 2020, the Company entered into a consulting agreement with Beachfront Travel Consulting LLC for their services and expertise in Call Center and Sales Operations. The consultant agreed to assist the Company in the development and design of a Call Center Operation to support the Company’s brand. The Company agreed to pay the consultant compensation of 1,500 restricted shares of common stock per month, with a price equal to the closing price on the last day of the month and the consultant agreed to advise the Company on policies and procedures, performance metrics and reporting, operational standards and training of call center staff. The Company issued the consultant 1,500 shares of restricted common stock for the month of December 2020. The agreement was terminated on December 7, 2020, and the parties entered into as a new consulting agreement, with an annual fee of $110,000 instead of the 1,500 per month stock compensation. A consultant to Beachfront is Beth Sikora, the wife of the COO of the Company, Tim Sikora. The agreement provides that Mrs. Sikora will manage the Consumer Programs and Call Center operations based on her experience and background.

 

On November 16, 2020, the Company acquired 100% of Longroot, which was in turn owned 57% of Longroot Cayman. Longroot Cayman owned 49% of the outstanding ordinary shares (with 51% of the Preferred shares owned by two Thai citizen nominee shareholders) of Longroot Thailand, provided that Longroot Cayman controls 90% of Longroot Thailand’s voting shares and therefore effectively controls Longroot Thailand. Subsequent to this acquisition, the Company signed a service contract with Atato, an IT provider of cryptocurrency website maintenance. As of November 30, 2020,February 28, 2022, Miss Worapin Tatun, wife of the CEO of Atato and Mr. Pongsabutra Viraseranee, an employee and developer employed by Atato, both are minority shareholders of Longroot Thailand with a 25.5% interest of preferred stock in Longroot Thailand each.

In December 2020 and January 2021, Sabby Management, LLC, which previously filed a Schedule 13G with the SEC disclosing its ownership of over 5% of our outstanding shares of common stock, exercised warrants to purchase 125,000 shares of our common stock with an exercise price of $2.00 per share, paid the aggregate $250,000 exercise price for such shares, and was issued 125,000 shares of common stock, which were covered under a registration statement filed under the Securities Act. Sabby is no longer a greater than 5% shareholder of the Company.

 

On April 7, 2021, each of Mr. Pasquale “Pat” LaVecchia, Mr. Doug Checkeris, Mr. Rupert Duchesne, Mr. Robert “Jamie” Mendola, Jr. and Ms. Alexandra C. Zubko, each then members of the board of directors of the Company, provided letters of resignation to the Company, resigning as directors (and from any other positions they hold with the Company), with such resignations effective automatically as of the closing of the HotPlay Exchange Agreement.

Such resignations were solely in connection with the required terms and conditions of the HotPlay Exchange Agreement, which requires that the board of directors of the Company at the closing thereof increase to nine members, with four appointed by HotPlay, two appointed by Monaker, and three appointed mutually by Monaker and HotPlay.

Also on April 7, 2021, the board of directors of the Company ratified the current compensation payable to members of the board of directors, which provides that each non-executive member of the Board be paid (a) compensation of 20,000 shares per year; (b) compensation of 5,000 shares per year, if they are the chairperson of any committee of the board of directors; and (c) compensation of 10,000 shares per year, to the Chairman of the Board (collectively, the “Board Compensation Terms”), except that all shares due to the Directors serving as of March 1, 2021, for the fiscal year ending February 28, 2022, were agreed to be issued up front and to be fully-vested/earned on the date of grant, instead of vesting over time, as previously awarded. In total, an aggregate of 165,000 shares of common stock were issued to the non-executive directors on April 8, 2021 for compensation for fiscal 2022 (such shares, the “Fiscal 2022 Board Compensation Shares”). The Fiscal 2022 Board Compensation Shares were issued under the Company’s Amended and Restated 2017 Equity Incentive Plan (the “Plan”).

On April 7,March 17, 2021, the Company entered into a Lock-Up Agreementmaster development and license agreement with eachHotPlay Enterprises Limited (“HPE”) to license software frameworks “HotNow Platform” from HPE and to engage HPE, using the HotNow Platform as the foundation, to develop for the Company assets and extra features required for the Company’s travel platform. On or about May 21, 2021, the Company and HPE expanded the agreement through additional statements of the non-executive memberswork for a total investment of the board of directors. Pursuant to the Lock-Up Agreements, each non-executive director agreed not to transfer, sell, pledge or assign any of their applicable Fiscal 2022 Board Compensation Shares until March 1, 2022.approximately $2.0 million.

 


On April 7,March 31, 2021, the board of directors of the Company, consistent with the employment agreement of Mr. William Kerby, the Chief Executive Officer of the Company, which provides for Mr. Kerby to receive a base salary of $400,000 per year, and an annual bonus payable at the discretion of the board of directors, of up to 100% of his base salary (50% based on meeting short term goals and 50% based on meeting long-term goals), and other bonuses which may be granted from time to time in the discretion of the board of directors, agreed to award Mr. Kerby a discretionary bonus for fiscal 2021 of $400,000, which is payable in cash or shares of common stock, at Mr. Kerby’s option, under the Plan, with a conversion price of $3.02 per share, the closing sales price of the Company’s common stock on the date the board of directors approved such bonus. If Mr. Kerby exercises his right to receive the entire bonus in shares of common stock he would be due 132,450 shares of common stock.

On August 15, 2019, the CompanyHotPlay Thailand entered into an Intellectual Property Purchase Agreementasset purchase agreement with IDS Inc. (“IDS” andHotNow, a related party, which is also under the IP Purchase Agreement”). Pursuantsame common control of HotPlay Thailand, to the agreement, the Company purchased certain proprietary technology from IDS for the reservation and booking of air travel, hotel accommodations, car rentals, and ancillary products, services, and amenities, integrationpurchase some of the sameassets, all software used in the business including all rights under licenses and other agreements and employees with the providersaggregate price of such products and services, associated functions, including website addresses, patents, trademarks, copyrights and trade secrets relating thereto, and all goodwill associated therewith (collectively, the “IP Assets19,500,000 Thai Baht (inclusive of 7% value added tax (VAT)) (approximately $624,000 US). In consideration for the purchase, the Company issued IDS 1,968,000 shares of restricted common stock (the “IDS Shares”) valued at $2.50 per share, or $4,920,000 in aggregate.

On April 27, 2020, the Company filed a verified complaint for injunctive relief against IDS and TD Assets Holding, LLC (“TD Asset”), Navarro McKown, Aaron McKown and Ari Daniels (“Daniels”), which parties are affiliated with IDS,30, 2021, HotPlay Thailand made an advanced payment to HotNow in the Circuit Courtamount of 5,000,000 Thai Baht (approximately $149,533 US). On June 7, 2021, HotPlay Thailand paid the remaining cost of the Seventeenth Judicial Circuitasset purchase to HotNow in and for Broward County, Florida (Case No. CACE-20-007088). Pursuant to the complaint, the Company alleged causesamount of action against the defendants, including IDS, based on among other things, fraud, conspiracy to commit fraud, aiding and abetting fraud, rescission, and breach of contract, and sought a temporary and permanent injunction against the defendants, requiring such persons to return the 1,968,000 IDS Shares issued14,500,000 Thai Baht (approximately $474,467 US) pursuant to the terms of the IP Purchase Agreement and preventing such persons from selling or transferring any IDS Shares, sought damages from the defendants, rescission of the IP Purchase Agreement, attorneys fees and other amounts. The defendants subsequently filed various counterclaims against the Company.asset purchase agreement.

 

The complaint was filed because of IDS’s failure to deliver the IP Assets, certain other actions of IDS and the other of the defendants whichOn March 24 2021, the Company alleged constituted fraud. The Company sought to unwind the IP Purchase Agreemententered into a short-term loan with Magnolia Quality Development Corporation Limited for $480,000 (15,000,000 Thai Baht) with an accrued interest rate of 9% per annum, which is payable on demand and sought damages for the Company due to IDS’sunsecured.

During June and the other defendants’ breaches thereunder. IDS, through its counsel, sent a letter threatening to bring a shareholders’ derivative action and/or direct suit against the Company. In response to such letter, the board of directors empowered the governance committee to conduct an investigation into the claims. The results of the investigation, conducted by several law firms, were presented to the Board and the Board concluded that no fraudulent activities occurred. The investigation concluded in October 2020.

On April 29, 2020, the Company filed a Verified Motion for Temporary Injunction (the “Injunction Motion”). Defendants IDS, TD Assets, and Ari Daniels filed an answer, affirmative defenses, and counterclaims (the “Answer and Counterclaim”). The Answer and Counterclaim included alleged breach of contract and tort claims against the Company. On September 17, 2020, the Company moved to strike the affirmative defenses and dismiss the counterclaims. On October 15, 2020, defendants IDS, TD Assets, and Ari Daniels filed an amended Answer and Counterclaim, including alleged breach of contract, tort, and federal securities claims against the Company, Mr. William Kerby, our Chief Executive Officer and an employee of the Company.

On July 27, 2020, the Company entered into a confidential settlementshort-term loan with Tree Roots Entertainment Group Company Limited (“TREG”) for $543,000 (17,000,000 Thai Baht) with an accrued interest rate of 9.7% per annum, which was payable on demand and unsecured. On May 31, 2021, HP Thailand repaid 7,000,000 Thai Baht (approximately $223,000) in connection with the short-term loan from TREG.


Next Bank International currently holds a $705,000 loan that was purchased in 2020 at a discounted purchase price of $647,776, when the Bank was not partially or wholly owned by the Company. The borrower is an entity affiliated with a current member of the Bank’s Board of Directors. The Loan bears interest at an annual rate of 10%.

On June 1, 2021, the Company entered into an agreement with certainSomething Great LLC (“Something Great”), a company owned and controlled by Mr. Kerby’s son, for their services. Something Great agreed to provide the content creation including writing, editing, designing and publishing the articles monthly. The Company agreed to pay Something Great of $19,200 per month for their service. The period of service is 6 months, periodically renewable.

On June 9, 2021, GLM Consulting Ltd (the “Consultant”), of which Andrew Greaves, the Company’s Chief Operating Officer, serves as the sole officer and director, entered into a Consulting Agreement with the Company to assist the Company in growing a connected subscriber base and ecosystem across all devices: Digital TV, Set Top Box, Streaming Devices, PC, Laptop, Tablet and Smartphones, by providing a range of operational expertise. The term of the defendantsagreement started on July 6, 2021 and is effective until June 30, 2022, provided that the agreement may be terminated at any time, by either party, with two weeks written prior notice. The Company agreed to pay the Consultant a daily consulting fee of $1,000, for each day of service up to a maximum amount of 20 days per month unless previously agreed in writing with the IDS matter, Navarro Hernandez, P.L., Aaron M. McKown, and Jeffery S. Bailey.Company. Each day of service shall include a minimum of 8 hours. The settlement provided for mutual releasesConsulting Agreement included confidentiality obligations of the parties and amounts payable from such parties to the Company in four tranches, in considerationcustomary work for such settlement, of which all such payments have been timely paid pursuant to the terms of the settlement.hire language.

The remaining parties to the litigation subsequently attempted to mediate their pursuant to a court ordered mediation in February 2021.

 


Effective on May 18,On August 19, 2021, the Company IDS, TD Asset and Ari Daniels, the principal of IDS, entered into an Amendment to Intellectual Property Purchase Agreements with Fighter Base Publishing Inc. (“Fighter Base”) and Token IQ Inc. (“Token IQ,” and together with Fighter Base, the “IP Sellers”), dated as of the same date (each an “IPP Agreement, (the “IP Purchase Amendment and together the “IPP Agreements”). Pursuant to the IP PurchaseIPP Agreements, the Company agreed to acquire certain intellectual property owned by Fighter Base (relating to the games industry) and by Token IQ (relating to the distributed ledger industry), both of which entities are owned and controlled by Mark Vange, the Chief Technology Officer of the Company. Pursuant to the IPP Agreements, in the event that the shares of Company common stock issued in connection with the foregoing transactions are still restricted six months after closing of such transactions, Fighter Base and Token IQ will have piggyback registration rights with respect to such shares. The Token IQ IPP Agreement includes the right for Token IQ to license the intellectual property purchased thereunder to third parties, with the approval of the Company, which shall not be unreasonable withheld, provided that any licenses are non-transferable, non-sublicensable and non-exclusive, and that the licenses will not compete with the Company. Any consideration received by Token IQ from such licenses will be split 50/50 between the Company and Token IQ.

Pursuant to the Fighter Base IPP Agreement, the parties amendedintellectual property to be acquired thereunder has a mutually agreed upon value of $5 million, which was paid by the IP Purchase Agreement, with the Company agreeing to make a payment to IDS in the amount of $2,850,000 (the “Payment”), payable by way of an initial paymentthe issuance to Fighter Base of $500,000,1,666,667 restricted shares of Company common stock (valued at $3 per share of common stock) at closing, which has been paid to date, and twelve monthly payments of approximately $195,833 (collectively, the “Required Payments”), with such monthly payments beginning 30 days after the initial payment, which is due seven days after the date of the IP Purchase Amendment. Such monthly payments may be pre-paid at any time without penalty. At the Company’s option, any portion of the amount due may be paid to IDS by a party separate from the Company (either a related party of Monaker or a third-party) (a “Paying Party”), for the benefit of Monaker, which shall be treated for all purposes as a payment by Monaker. As consideration for such Paying Party making such payment on behalf of Monaker, IDS agreed to transfer the Paying Party a number of the IDS Shares equal to the amount of the cash payment(s) made by a Paying Party multiplied by 0.6888 as to the first $500,000 payment (which payment has been made, but which shares have not been transferred to the Company to date), and 0.691 as to the monthly payments (as applicable, the “Applicable Portion” of the IDS Shares).

In the event the Company fails to make any payment timely, and the Company does not cure such default within seven days of written notice of default being provided by IDS, IDS is entitled to entry of a default judgment against the Company in the amount of the differential, if any, between the realized value of the IDS Shares upon the future sale thereof in the open market by IDS, and the unpaid amount of any payment due. In the event of any such default, IDS will be entitled to attorneys’ fees incurred to obtain said judgment.

Upon each payment of amounts due to IDS pursuant to the terms of the IP Agreement Amendment as discussed above by Monaker (instead of a Paying Party), IDS agreed to transfer the portion of the IDS Shares equal to the Applicable Portion, to the Company.

Until such time as the IDS Shares are no longer held by IDS, IDS agreed not to transfer or encumber any of such shares, except pursuant to the terms of the IP Purchase Amendment.

IDS also agreed to transfer certain unbranded travel videos back to the Company which were previously purchased by IDS from Monaker, pursuant to the IP Purchase Agreement.

A further requirement of the IP Purchase Amendment was that IDS enter into a Shareholder Voting Representation Agreement with William Kerby, our Chief Executive Officer and director (the “Shareholder Voting Agreement”), which was entered into effectiveoccurred on May 18, 2021. 2, 2022.

Pursuant to the Shareholder VotingToken IQ IPP Agreement, IDS provided Mr. Kerby the rightintellectual property to and an irrevocable proxy to, vote allbe acquired thereunder has a mutually agreed upon value of $5 million, which was paid by the Company by way of the IDS Shares heldissuance to Fighter Base of 1,250,000 restricted shares of Company common stock (valued at $4 per share of common stock) at closing, which occurred on May 2, 2022.

Closing of the transactions contemplated by IDSthe IPP Agreements was subject to customary closing conditions, which include, due to Mr. Vange’s status as an officer of the Company, the approval of the Company’s shareholders of the transactions contemplated by the IPP Agreements and the issuance of shares of Company common stock thereunder (which was obtained at anythat special meeting of stockholders of the Company and/or via any written consent of stockholders of the Company. The Shareholder Voting Agreement remains in place until the earlier of the fifth anniversary of the Shareholder Voting Agreement; the disposition of the IDS Shares pursuant to the IP Purchase Amendment; a change of control of Monaker resulting in persons prior to such transaction obtaining more than 50% voting control of the Company following such transaction; the sale of all or substantially all of the assets of the Company; or termination of the agreement by Mr. Kerby. Mr. Kerby may also assign his rights under the agreement to another party and/or the Company may assign Mr. Kerby’s rights under the agreement if Mr. Kerby is unable to make such assignment due to his death or disability. Mr. Kerby was provided the voting rights as the shareholder representative of, and for the benefit of, the Company.

Also effectiveheld on May 18, 2021, the Company, IDS, TD Asset and Ari Daniels, entered into a Confidential Settlement Agreement and Mutual Release, whereby (a) we provided a general release to IDS, TD Asset and Mr. Daniels, and (b) IDS, TD Asset and Mr. Daniel provided a general release to us; the parties agreed to file a Joint Notice of Voluntary Dismissal to dismiss the pending lawsuit discussed above; and the parties agreed that a prior Web Based Booking Engine Development Agreement dated October 24, 2017, was terminated.January 28, 2022).

We expect the parties to the litigation above to file a joint notice for voluntary dismissal of the lawsuit shortly after the date of this Report.

 


Review and Approval of Related Party Transactions

The Audit Committee of the board of directors of the CompanyBoard is tasked with reviewing and approving any issues relating to conflicts of interests and all related party transactions of the Company (“Related Party TransactionsTransactions”). The Audit Committee, in undertaking such review and approval, will analyze the following factors, in addition to any other factors the Audit Committee deems appropriate, in determining whether to approve a Related Party Transaction: (1)(i) the fairness of the terms for the Company (including fairness from a financial point of view); (2)(ii) the materiality of the transaction; (3) bids / (iii) bids/terms for such transaction from unrelated parties; (4)(iv) the structure of the transaction; (5)(v) the policies, rules and regulations of the U.S. federal and state securities laws; (6)(vi) the policies of the Committee; and (7)(vii) interests of each related party in the transaction.

 

The Audit Committee will only approve a Related Party Transaction if the Audit Committee determines that the terms of the Related Party Transaction are beneficial and fair (including fair from a financial point of view) to the Company and are lawful under the laws of the United States. In the event multiple members of the Audit Committee are deemed a related party, the Related Party Transaction will be considered by the disinterested members of the board of directors in place of the Audit Committee.

 

In addition, our Code of Ethics, (described above under “Item 10. Directors, Executive Officers and Corporate Governance—Corporate Governance—Code of Ethics”), which is applicable to all of our employees, officers and directors, requires that all employees, officers and directors avoid any conflict, or the appearance of a conflict, between an individual’s personal interests and our interests.

Item 14. Principal Accountant Fees and Services.

 

The following table presents fees for professional audit and merger and acquisition related services performed by TPS Thayer, LLC (“TPSTPS”) and other professional firms for the audit of our annual financial statements, review of our quarterly financial statements, and all merger and acquisition related activities from September 19, 2020 for the years ended February 28, 20212022 and February 29, 2020.2021.

 

Prior to the appointment of TPS on September 30, 2021, Thayer O’Neal Company, LLC (“Thayer”) served as our independent auditregistered accounting firm from May 16, 2019 to September 19, 2020, and audited our financial statements for the years ended February 29, 2020 and February 28, 2019.30, 2020.

 

  TPS Others
  2021 2020 2021 2020
Audit Fees(1) $39,500  $  $48,500   89,000 
Audit-Related Fees(2)             
M&A Fees(3)  10,000          
All Other Fees(4)  17,000      20,000    
Total $66,500  $0  $68,500   89,000 
  TPS  Others 
  2022  2021  2022  2021 
Audit Fees(1) $234,000  $39,500  $  $48,500 
Audit-Related Fees(2)            
Tax Fees(3)     10,000   4,300    
All Other Fees(4)  103,000   17,000   41,213   20,000 
Total $337,000  $66,500  $45,513  $68,500 

 

(1)Audit fees include professional services rendered for (1)(i) the audit of our annual financial statements for the fiscal years ended February 28, 20212022 and February 29, 202028, 2021 and (ii) the reviews of the financial statements included in our quarterly reportsQuarterly Reports on Form 10-Q for such years.

 

(2)Audit-related fees consist of fees billed for professional services that are reasonably related to the performance of the audit or review of our consolidated financial statements, but are not reported under Audit“Audit fees.

 

(3)FeesTax fees include professional services.

(4)Other fees include professional services relating to merger and acquisition related activities.

(4)Other fees include professional servicesactivities and for review of various filings and issuance of consents.

 

Pre-Approval Policies

 

It is the policy of our board of directorsBoard that all services to be provided by our independent registered public accounting firm, including audit services and permitted audit-related and non-audit services, must be pre-approved by our board of directors.Board. Our board of directorsBoard pre-approved all services, audit and non-audit, provided to us by TPS for fiscal 20212022 and from Thayer O’Neal Company, LLC for fiscal 2020.2021.

 

 158


 

 

PART IV

Item 15. Exhibits, Financial Statement Schedules.

 

(a)Documents filed as part of this Annual Report:

(a) Documents filed as part of this Annual Report:

 

The following is an index of the financial statements, schedules and exhibits included in this Annual Report on Form 10-K or incorporated herein by reference.

 

(1)All Financial Statements

 

Description Page
Reports of Independent Registered Public Accounting Firms (PCAOB ID No. is 6706.) 86F-2
Consolidated Balance Sheets 87F-3
Consolidated Statements of Operations 88F-4
Consolidated Statement of Cash Flows 89F-6
Consolidated Statements of Stockholders’ Equity 90F-5
Notes to Consolidated Financial Statements 91F-7

 

(2)Consolidated Financial Statement Schedules

 

Except as provided above, all financial statement schedules have been omitted, since the required information is not applicable or is not present in amounts sufficient to require submission of the schedule, or because the information required is included in the consolidated financial statements and notes thereto included in this Annual Report on Form 10-K.

 

(3)Exhibits

      Incorporated By Reference
Exhibit No. Description Furnished or Filed Form Exhibit Filing Date File No. 
Herewith
1.1 Underwriting Agreement, dated December 28, 2020, by and between Monaker Group, Inc., Kingswood Capital Markets, division of Benchmark Investments, Inc. and Aegis Capital Corp.   8-K 1.1 12/31/2020 001-38402 
1.2 Underwriting Agreement, dated May 13, 2021, by and between Monaker Group, Inc. and Kingswood Capital Markets, division of Benchmark Investments, Inc.   8-K 1.1 5/18/2021 001-38402 

 


2.1+ Intellectual Property Purchase Agreement by and between Monaker Group, Inc., as Buyer and IDS Inc., as Seller, dated August 15, 2019   8-K 2.1 8/22/2019 001-38402 
2.2+ Share Exchange Agreement by and among Monaker Group, Inc., HotPlay Enterprise Limited and the Stockholders of HotPlay Enterprise Limited, dated as of July 21, 2020   8-K 2.1 7/23/2020 001-38402 
2.3 First Amendment to Share Exchange Agreement by and among Monaker Group, Inc., HotPlay Enterprise Limited and the Stockholders of HotPlay Enterprise Limited, entered into October 28, 2020, and dated as of October 23, 2020   8-K 2.2 10/29/2020 001-38402 
2.4 Second Amendment to Share Exchange Agreement by and among Monaker Group, Inc., HotPlay Enterprise Limited and the Stockholders of HotPlay Enterprise Limited, dated November 12, 2020   8-K 2.3 11/18/2020 001-38402 
2.5 Third Amendment to Share Exchange Agreement by and among Monaker Group, Inc., HotPlay Enterprise Limited and the Stockholders of HotPlay Enterprise Limited, dated January 6, 2021   8-K 2.4 1/11/2021 001-38402 
2.6+ Share Exchange Agreement by and among Monaker Group, Inc. and the Stockholders Holding Shares or Debt of Axion Ventures, Inc., dated as of July 21, 2020   8-K 2.2 7/23/2020 001-38402 
2.7 First Amendment to Share Exchange Agreement by and among Monaker Group, Inc., HotPlay Enterprise Limited and the Stockholders of HotPlay Enterprise Limited, entered into October 28, 2020, and dated as of October 23, 2020   8-K 2.4 10/29/2020 001-38402 

    Incorporated by Reference  
Exhibit
No.
 Exhibit Description Form  Exhibit Filing Date Filed
Herewith
           
2.1+ Intellectual Property Purchase Agreement by and between Monaker Group, Inc., as Buyer and IDS Inc., as Seller, dated August 15, 2019. 8-K 2.1 8/22/2019  
2.2+ Share Exchange Agreement by and among Monaker Group, Inc., HotPlay Enterprise Limited and the Stockholders of HotPlay Enterprise Limited, dated as of July 21, 2020. 8-K 2.1 7/23/2020  
2.3+ Share Exchange Agreement by and among Monaker Group, Inc. and the Stockholders Holding Shares or Debt of Axion Ventures, Inc., dated as of July 21, 2020. 8-K 2.2 7/23/2020  
2.4 First Amendment to Share Exchange Agreement by and among Monaker Group, Inc., HotPlay Enterprise Limited and the Stockholders of HotPlay Enterprise Limited, entered into October 28, 2020, and dated as of October 23, 2020. 8-K 2.2 10/29/2020  
2.5 First Amendment to Share Exchange Agreement by and among Monaker Group, Inc., HotPlay Enterprise Limited and the Stockholders of HotPlay Enterprise Limited, entered into October 28, 2020, and dated as of October 23, 2020. 8-K 2.4 10/29/2020  
2.6 Second Amendment to Share Exchange Agreement by and among Monaker Group, Inc., HotPlay Enterprise Limited and the Stockholders of HotPlay Enterprise Limited, dated November 12, 2020. 8-K 2.3 11/18/2020  
2.7 Amended and Restated Share Exchange Agreement by and among Monaker Group, Inc. and the Stockholders Holding Shares or Debt of Axion Ventures, Inc., dated as of November 12, 2020. 8-K 2.6 11/18/2020  
2.8 Stock Purchase Agreement dated November 2, 2020, by and between Dr. Jason Morton (seller), Monaker Group, Inc. (purchaser), and Longroot, Inc., for certain limited purposes. 8-K 2.1 11/19/2020  
2.9 December 11, 2020 Letter Agreement between Monaker Group, Inc. and Dr. Jason Morton relating to the November 2, 2020 Stock Purchase Agreement. 8-K 2.2 12/18/2020  
2.10 Third Amendment to Share Exchange Agreement by and among Monaker Group, Inc., HotPlay Enterprise Limited and the Stockholders of HotPlay Enterprise Limited, dated January 6, 2021. 8-K 2.4 1/11/2021  
2.11 First Amendment to Amended and Restated Share Exchange Agreement by and among Monaker Group, Inc. and the Stockholders Holding Shares or Debt of Axion Ventures, Inc., dated as of January 6, 2021. 8-K 2.7 1/11/2021  

 


2.8+ Amended and Restated Share Exchange Agreement by and among Monaker Group, Inc. and the Stockholders Holding Shares or Debt of Axion Ventures, Inc., dated as of November 12, 2020   8-K 2.6 11/18/2020 001-38402 
2.9 Stock Purchase Agreement dated November 2, 2020, by and between Dr. Jason Morton (seller), Monaker Group, Inc. (purchaser), and Longroot, Inc., for certain limited purposes   8-K 2.1 11/19/2020 001-38402 
2.10 December 11, 2020 Letter Agreement between Monaker Group, Inc. and Dr. Jason Morton relating to the November 2, 2020 Stock Purchase Agreement   8-K 2.2 12/18/2020 001-38402 
2.11 First Amendment to Amended and Restated Share Exchange Agreement by and among Monaker Group, Inc. and the Stockholders Holding Shares or Debt of Axion Ventures, Inc., dated as of January 6, 2021   8-K 2.7 1/11/2021 001-38402 
2.12 Fourth Amendment to Share Exchange Agreement by and among Monaker Group, Inc., HotPlay Enterprise Limited and the Stockholders of HotPlay Enterprise Limited, dated February 22, 2021   8-K 2.5 2/26/2021 001-38402 

 


2.13 Amendment to Intellectual Property Purchase Agreement by and between Monaker Group, Inc., IDS, Inc. a/k/a IDS International Inc. a/k/a Internet Distribution Systems a/k/a International Distribution Systems, TD Asset Holdings, LLC, and Ari Daniels, dated effective May 18, 2021   8-K 2.2 05/21/2021 001-38402 
2.1 Articles of Incorporation of Maximum Exploration Corporation   SB-2 3.1 8/14/2006 333-136630 
2.2 Certificate of Amendment to Articles of Incorporation (changing name to Next 1 Interactive, Inc. and increasing authorized shares)   S-1/A 3.1.2 3/12/2009 333-154177 
2.3 Certificate of Amendment to Articles of Incorporation (increasing authorized shares)   S-1 3.3 9/25/2017 333-220619 
2.4 Certificate of Amendment to Articles of Incorporation (increasing authorized shares)   S-1 3.4 9/25/2017 333-220619 
2.5 Certificate of Change Filed Pursuant to NRS 78.209   8-K 3.1 5/21/2012 000-52669 
2.6 Certificate of Amendment to Articles of Incorporation (increasing authorized shares)   S-1 3.6 9/25/2017 333-220619 
2.7 Amendment to the Articles of Incorporation of Next 1 Interactive, Inc. changing its name to Monaker Group, Inc. and affect a 1-for-50 reverse stock split   8-K 3.1 6/26/2015 000-52669 
2.12 Fourth Amendment to Share Exchange Agreement by and among Monaker Group, Inc., HotPlay Enterprise Limited and the Stockholders of HotPlay Enterprise Limited, dated February 22, 2021. 8-K 2.5 2/26/2021  
2.13 Amendment to Intellectual Property Purchase Agreement by and between Monaker Group, Inc., IDS, Inc. a/k/a IDS International Inc. a/k/a Internet Distribution Systems a/k/a International Distribution Systems, TD Asset Holdings, LLC, and Ari Daniels, dated effective May 18, 2021. 8-K 2.2 05/21/2021  
2.14+ Securities Purchase Agreement dated June 30, 2021, by and between Monaker Group, Inc. and David Ng 8-K 2.1 7/7/2021  
2.15+ Asset Purchase Agreement, dated March 30, 2022, by and among NextPlay Technologies, Inc., Go Game Pte Ltd and David Ng. 8-K 2.1 4/5/2022  
3.1 Articles of Incorporation of Maximum Exploration Corporation, dated December 29, 2005. SB-2 3.1 8/14/2006  
3.2 Certificate of Amendment to Articles of Incorporation (changing name to Next 1 Interactive, Inc. and increasing authorized shares). S-1/A 3.1.2 3/12/2009  
3.3 Certificate of Amendment to Articles of Incorporation (increasing authorized shares), dated November 28, 2011. S-1 3.3 9/25/2017  
3.4 Certificate of Amendment to Articles of Incorporation (increasing authorized shares), dated March 12, 2012. S-1 3.4 9/25/2017  
3.5 Certificate of Change Filed Pursuant to NRS 78.209, dated May 15, 2012. 8-K 3.1 5/21/2012  
3.6 Certificate of Amendment to Articles of Incorporation (increasing authorized shares), dated July 23, 2012. S-1 3.6 9/25/2017  
3.7 Amended and Restated Certificate of Designations of Series A 10% Cumulative Convertible Preferred Stock of Next 1 Interactive, Inc., dated July 9, 2013. 8-K 3.1 7/22/2013  
3.8 Amendment to the Articles of Incorporation of Next 1 Interactive, Inc. changing its name to Monaker Group, Inc. and affect a 1-for-50 reverse stock split, dated June 22, 2015. 8-K 3.1 6/26/2015  
3.9 Amended and Restated Bylaws of Monaker Group, Inc., effective July 27, 2017. 8-K 3.1 8/1/2017  
3.10 Certificate of Amendment to Articles of Incorporation (1-for-2.5 Reverse Stock Split of Common Stock) filed with the Nevada Secretary of State on February 8, 2018 and effective on February 12, 2018. 8-K 3.1 2/12/2018  
3.11 Certificate of Designation of Monaker Group, Inc. Establishing the Designation, Preferences, Limitations and Relative Rights of Its Series C Convertible Preferred Stock as filed with the Secretary of State of Nevada on November 13, 2020. 8-K 3.2 11/18/2020  

 


2.8 Amended and Restated Certificate of Designations of Series A 10% Cumulative Convertible Preferred Stock of Next 1 Interactive, Inc.   8-K 3.1 7/9/2013 000-52669 
2.9 Amendment to Certificate of Designation of Series A 10% Cumulative Convertible Preferred Stock, filed with the Secretary of State of Nevada on October 22, 2009   S-1 3.6 9/23/2016 333-213753 
2.10 Certificate of Amendment to Articles of Incorporation (1-for-2.5 Reverse Stock Split of Common Stock) filed with the Nevada Secretary of State on February 8, 2018 and effective on February 12, 2018   8-K 3.1 2/12/2018 000-52669 
2.11 Certificate of Designation of Monaker Group, Inc. Establishing the Designation, Preferences, Limitations and Relative Rights of Its Series B Convertible Preferred Stock as filed with the Secretary of State of Nevada on November 13, 2020   8-K 3.1 11/18/2020 001-38402 
2.12 Certificate of Designation of Monaker Group, Inc. Establishing the Designation, Preferences, Limitations and Relative Rights of Its Series C Convertible Preferred Stock as filed with the Secretary of State of Nevada on November 13, 2020   8-K 3.2 11/18/2020 001-38402 
2.13 Amended and Restated Certificate of Designation of Monaker Group, Inc. Establishing the Designation, Preferences, Limitations and Relative Rights of Its Series B Convertible Preferred Stock as filed with the Secretary of State of Nevada on January 8, 2021   8-K 3.1 1/11/2021 001-38402 

 


2.14 Operating Agreement of NextTrip Holdings, LLC   8-K 3.1 1/13/2021 001-38402 
2.15 Amended and Restated Bylaws of Monaker Group, Inc., effective July 27, 2017   8-K 3.1 8/1/2017 000-52669 
4.1 Description of Registrant’s Securities   10-K 4.1 5/29/2020 001-38402 
10.1 Form of Warrant (February and March 2017 Subscriptions)   8-K 10.2 3/10/2017 000-52669 
10.2 $750,000 Promissory Note dated May 16, 2016, between Crystal Falls Investments, LLC as borrower and the Company as Lender   10-K 10.35 2/28/2017 000-52669 
10.3 $2.9 million Secured Convertible Promissory Note dated August 31, 2017, by Bettwork Industries Inc., as borrower in favor of Monaker Group, Inc., as payee   8-K 10.3 9/5/2017 000-52669 
10.4 Assignment and Novation Agreement dated and effective August 31, 2017, by and between Monaker Group, Inc., Crystal Falls Investments, LLC, and Bettwork Industries Inc.   8-K 10.4 9/5/2017 000-52669 
10.5 $1.6 Million Secured Convertible Promissory Note owed by Bettwork Industries Inc. to Monaker Group, Inc.   8-K 10.5 6/6/2018 001-38402 
10.6 Debt Conversion Agreement Between Monaker Group, Inc. and Bettwork Industries Inc. dated July 3, 2018   8-K 10.1 7/6/2018 001-38402 
3.12 Amended and Restated Certificate of Designation of Monaker Group, Inc. Establishing the Designation, Preferences, Limitations and Relative Rights of Its Series B Convertible Preferred Stock as filed with the Secretary of State of Nevada on January 8, 2021. 8-K 3.1 1/11/2021  
3.13 Operating Agreement of NextTrip Holdings, LLC, dated January 11, 2021. 8-K 3.1 1/13/2021  
3.14 Articles of Exchange as filed with the Secretary of State of Nevada on July 2, 2021 (relating to the HotPlay Share Exchange Agreement) 8-K 3.1 7/7/2021  
3.15 Certificate of Amendment to Articles of Incorporation filed with the Secretary of State of Nevada on July 2, 2021 and effective on July 9, 2021 (changing name to NextPlay Technologies, Inc.) 8-K 3.1 7/9/2021  
3.16 Certificate of Correction to July 2021 Certificate of Amendment filed with the Secretary of State of Nevada on July 6, 2021 8-K 3.2 7/9/2021  
3.17 Certificate of Designation of NextPlay Technologies, Inc. Establishing the Designation, Preferences, Limitations and Relative Rights of Its Series D Convertible Preferred Stock as filed with the Secretary of State of Nevada on July 21, 2021 8-K 3.1 7/27/2021  
4.1 Form of Warrant (February and March 2017 Subscriptions). 8-K 10.2 3/10/2017  
4.2 Form of Common Stock Purchase Warrant to be provided to each investor (September 2018). 8-K 4.1 10/2/2018  
4.3 Common Stock Purchase Warrant dated November 16, 2020 (exercisable upon certain events for 1,914,250 shares of common stock and granted to Cern One Limited) 8-K 10.5 11/6/2020  
4.4*** Form of Warrant to Purchase Common Stock (March 2021 Grants) 8-K 10.1 4/9/2021  
4.5 Form of Common Stock Purchase Warrant (November 2021) 8-K 4.1 11/3/2021  
4.6 Description of Registrant’s Securities 10-K 4.1 5/29/2020  
10.1*** Employment Agreement dated October 31, 2018, by and between Monaker Group, Inc. and William Kerby. 8-K 10.1 11/2/2018  
10.2 Form of First Amendment to Securities Purchase Agreement and Warrants dated January 15, 2019, by and between Monaker Group, Inc. and the investors party thereto. 10-Q 10.14 1/17/2019  
10.3*** Monaker Group, Inc. 2017 Equity Incentive Plan - Form of Stock Incentive Plan Stock Option Award. S-8 4.2 1/25/2019  
10.4*** Monaker Group, Inc. 2017 Equity Incentive Plan - Form of Stock Incentive Plan Restricted Stock Grant Agreement. S-8 4.3 1/25/2019  
10.5*** Amended and Restated Monaker Group, Inc. 2017 Equity Incentive Plan, dated August 15, 2019. 8-K 10.1 8/19/2019  
10.6*** $2,700,000 Amended and Restated Promissory Note dated December 9, 2019, entered into by Monaker Group, Inc. and the Donald P. Monaco Insurance Trust. 8-K 10.1 12/9/2019  

 


10.7 Form of Common Stock Purchase Warrant to be provided to each investor (September 2018)   8-K 4.1 10/2/2018 001-38402 
10.8*** Employment Agreement dated October 31, 2018, by and between Monaker Group, Inc. and William Kerby   8-K 10.1 11/2/2018 001-38402 
10.9 Amended Promissory Note in the amount of $230,000, by Bettwork industries Inc., as borrower and Monaker Group, Inc., as lender, dated October 19, 2018   10-Q 10.13 11/30/2018 001-38402 
10.10 Form of First Amendment to Securities Purchase Agreement and Warrants dated January 15, 2019, by and between Monaker Group, Inc. and the investors party thereto   10-Q 10.14 11/30/2018 001-38402 
10.11*** Monaker Group, Inc. 2017 Equity Incentive Plan - Form of Stock Incentive Plan Stock Option Award   S-8 4.2 1/25/2019 333-229370 
10.12*** Monaker Group, Inc. 2017 Equity Incentive Plan - Form of Stock Incentive Plan Restricted Stock Grant Agreement   S-8 4.3 1/25/2019 333-229370 
10.13 First Amendment to Amended Promissory Note in the original amount of $230,000, by Bettwork industries Inc., as borrower and Monaker Group, Inc., as lender, dated March 12, 2019 and effective February 28, 2019   8-K 10.2 3/15/2019 001-38402 
10.14*** Amended and Restated Monaker Group, Inc. 2017 Equity Incentive Plan   8-K 10.1 8/19/2019 001-38402 

 


10.15# Asset Management Services Agreement by and between TD Assets Holding, LLC, as Operator, and Monaker Group, Inc., as Owner, dated August 15, 2019   8-K 10.1 8/22/2019 001-38402 
10.16 Second Amendment to Amended Promissory Note in the original amount of $230,000, by Bettwork industries Inc., as borrower and Monaker Group, Inc., as lender, dated October 10, 2019 and effective August 31, 2019   10-Q 10.4 10/15/2019 001-38402 
10.17*** $2,700,000 Amended and Restated Promissory Note dated December 9, 2019, entered into by Monaker Group, Inc. and the Donald P. Monaco Insurance Trust   10-Q 10.1 12/9/2019 001-38402 
10.18 Business Loan Agreement dated January 7, 2020, by and between Monaker Group, Inc. and National Bank of Commerce, formerly Republic Bank, Inc.   10-Q 10.11 1/13/2020 001-38402 
10.19*** First Amendment to Amended and Restated Promissory Note dated January 29, 2020, by and between Monaker Group, Inc. and the Donald P. Monaco Insurance Trust   8-K 10.2 1/31/2020 001-38402 
10.20*** Second Amendment to Amended and Restated Promissory Note dated March 27, 2020, by and between Monaker Group, Inc. and the Donald P. Monaco Insurance Trust   8-K 10.3 3/30/2020 001-38402 
10.21 $1,200,000 Promissory Note payable by Monaker Group, Inc. to National Bank of Commerce dated May 7, 2020   8-K 10.1 5/13/2020 001-38402 
10.7 Business Loan Agreement dated January 7, 2020, by and between Monaker Group, Inc. and National Bank of Commerce, formerly Republic Bank, Inc. 10-Q 10.11 1/13/2020  
10.8*** First Amendment to Amended and Restated Promissory Note dated January 29, 2020, by and between Monaker Group, Inc. and the Donald P. Monaco Insurance Trust. 8-K 10.2 1/31/2020  
10.9*** Second Amendment to Amended and Restated Promissory Note dated March 27, 2020, by and between Monaker Group, Inc. and the Donald P. Monaco Insurance Trust. 8-K 10.3 3/30/2020  
10.10 $1,200,000 Promissory Note payable by Monaker Group, Inc. to National Bank of Commerce dated May 7, 2020. 8-K 10.1 5/13/2020  
10.11 $176,534 U.S. Small Business Administration Paycheck Protection Plan Note dated May 8, 2020 8-K 10.2 5/13/2020  
10.12#*** Employment Agreement dated January 30, 2020 by and between Monaker Group, Inc. and Sirapop “Kent” Taepakdee 10-K 10.61 5/29/2020  
10.13#*** Employment Agreement dated January 30, 2020 by and between Monaker Group, Inc. and Timothy Sikora 10-K 10.62 5/29/2020  
10.14 First Amendment to Promissory Note dated April 16, 2020 and effective April 14, 2020, between Monaker Group, Inc. and Crystal Falls Investments LLC 10-Q 10.11 7/13/2020  
10.15 Form of Share Purchase Agreement, dated July 24, 2020, by and between the Company and the Purchaser thereunder 8-K 10.1 7/27/2020  
10.16 $300,000 Convertible Note by and among Monaker Group, Inc. and HotPlay Enterprise Limited, dated as of September 1, 2020 8-K 10.1 9/8/2020  
10.17 $700,000 Convertible Note by and among Monaker Group, Inc. and HotPlay Enterprise Limited, effective as of September 18, 2020 8-K 10.1 9/24/2020  
10.18 $1,000,000 Convertible Note by and among Monaker Group, Inc. and HotPlay Enterprise Limited, effective as of September 30, 2020 8-K 10.1 10/1/2020  
10.19 Second Amendment to Promissory Note dated September 15, 2020 and effective August 14, 2020, between Monaker Group, Inc. and Crystal Falls Investments LLC 10-Q 10.16 10/15/2020  
10.20 $400,000 Convertible Note by and among Monaker Group, Inc. and HotPlay Enterprise Limited, effective as of November 3, 2020 8-K 10.1 11/6/2020  
10.21*** Third Amendment to Amended and Restated Promissory Note dated November 6, 2020, by and between Monaker Group, Inc. and the Donald P. Monaco Insurance Trust 8-K 10.5 11/6/2020  
10.22*** Fourth Amendment to Amended and Restated Promissory Note dated November 16, 2020, by and between Monaker Group, Inc. and the Donald P. Monaco Insurance Trust 8-K 10.5 11/19/2020  

 


10.22 $176,534 U.S. Small Business Administration Paycheck Protection Plan Note dated May 8, 2020   8-K 10.2 5/13/2020 001-38402 
10.23#*** Employment Agreement dated January 30, 2020 by and between Monaker Group, Inc. and Sirapop “Kent” Taepakdee   10-Q 10.61 5/29/2020 001-38402 
10.24#*** Employment Agreement dated January 30, 2020 by and between Monaker Group, Inc. and Timothy Sikora   10-Q 10.62 5/29/2020 001-38402 
10.25 First Amendment to Promissory Note dated April 16, 2020 and effective April 14, 2020, between Monaker Group, Inc. and Crystal Falls Investments LLC   10-Q 10.11 7/13/2020 001-38402 
10.26 Form of Share Purchase Agreement, dated July 24, 2020, by and between the Company and the Purchaser thereunder   8-K 10.1 7/27/2020 001-38402 
10.27 $300,000 Convertible Note by and among Monaker Group, Inc. and HotPlay Enterprise Limited, dated as of September 1, 2020   8-K 10.1 9/8/2020 001-38402 
10.28 $700,000 Convertible Note by and among Monaker Group, Inc. and HotPlay Enterprise Limited, effective as of September 18, 2020   8-K 10.1 9/24/2020 001-38402 
10.29 $1,000,000 Convertible Note by and among Monaker Group, Inc. and HotPlay Enterprise Limited, effective as of September 30, 2020   8-K 10.1 10/1/2020 001-38402 
10.30 Second Amendment to Promissory Note dated September 15, 2020 and effective August 14, 2020, between Monaker Group, Inc. and Crystal Falls Investments LLC   10-Q 10.16 10/15/2020 001-38402 

 


10.31 $400,000 Convertible Note by and among Monaker Group, Inc. and HotPlay Enterprise Limited, effective as of November 3, 2020   8-K 10.1 11/6/2020 001-38402 
10.32*** Third Amendment to Amended and Restated Promissory Note dated November 6, 2020, by and between Monaker Group, Inc. and the Donald P. Monaco Insurance Trust   8-K 10.5 11/6/2020 001-38402 
10.33 Common Stock Purchase Warrant dated November 16, 2020 (exercisable upon certain events for 1,914,250 shares of common stock and granted to Cern One Limited)   8-K 10.1 11/18/2020 001-38402 
10.34*** Fourth Amendment to Amended and Restated Promissory Note dated November 16, 2020, by and between Monaker Group, Inc. and the Donald P. Monaco Insurance Trust   8-K 10.5 11/19/2020 001-38402 
10.35+ Note Purchase Agreement dated November 23, 2020, by and between Monaker Group, Inc. and Streeterville Capital, LLC   8-K 10.1 11/27/2020 001-38402 
10.36+ $5,520,000 Secured Promissory Note dated November 23, 2020, evidencing amounts owed by Monaker Group, Inc. to Streeterville Capital, LLC   8-K 10.2 11/27/2020 001-38402 
10.37 $1,500,000 Investor Note dated November 23, 2020, evidencing amounts owed by Streeterville Capital, LLC to Monaker Group, Inc.   8-K 10.3 11/27/2020 001-38402 

10.23+ Note Purchase Agreement dated November 23, 2020, by and between Monaker Group, Inc. and Streeterville Capital, LLC 8-K 10.1 11/27/2020  
10.24+ $5,520,000 Secured Promissory Note dated November 23, 2020, evidencing amounts owed by Monaker Group, Inc. to Streeterville Capital, LLC 8-K 10.2 11/27/2020  
10.25 $1,500,000 Investor Note dated November 23, 2020, evidencing amounts owed by Streeterville Capital, LLC to Monaker Group, Inc. 8-K 10.3 11/27/2020  
10.26 Security Agreement dated November 23, 2020, by Monaker Group, Inc. in favor of Streeterville Capital, LLC 8-K 10.4 11/27/2020  
10.27 $100,000 Convertible Note by and among Monaker Group, Inc. and HotPlay Enterprise Limited, effective as of November 24, 2020 8-K 10.5 11/27/2020  
10.28 $350,000 Convertible Note by and among Monaker Group, Inc. and HotPlay Enterprise Limited, executed December 14, 2020 and effective as of December 11, 2020 8-K 10.1 12/14/2020  
10.29 $150,000 Convertible Note by and among Monaker Group, Inc. and HotPlay Enterprise Limited, dated January 6, 2021 8-K 10.1 1/7/2021  
10.30 Subsidiary Formation and Funding Agreement dated and effective January 12, 2021, by and between Monaker Group, Inc., NextTrip Group, LLC, HotPlay Enterprise Limited, and the stockholders of HotPlay 8-K 10.1 1/13/2021  
10.31+@ Founding Investment and Subscription Agreement dated January 15, 2021, by and between Monaker Group, Inc., Jan C. Reinhart, and Reinhart Interactive IV AG 10-Q 10.30 1/19/2021  
10.32+ Founding Shareholders’ Agreement dated January 15, 2021, by and between Monaker Group, Inc., Jan C. Reinhart, certain other shareholders of Reinhart Interactive IV AG, certain directors of Reinhart Interactive IV AG and Reinhart Interactive IV AG 10-Q 10.31 1/19/2021  
10.33 Voting Agreement, dated and effective February 22, 2021, by and between William Kerby and Donald P. Monaco; each of the shareholders of preferred stock, common stock and/or future shareholders of shares of common stock, of Monaker Group, Inc., part thereto, and for certain limited purposes, each of the affiliates of such parties’ party thereto 8-K 10.1 2/26/2021  
10.34 $9,000,000 Convertible Note by and among Monaker Group, Inc. and HotPlay Enterprise Limited, dated March 16, 2021 8-K 10.1 3/22/2021  
10.35 $1,000,000 Convertible Note by and among Monaker Group, Inc. and HotPlay Enterprise Limited, dated March 19, 2021 8-K 10.2 3/22/2021  
10.36 Joint Venture Agreement dated March 8, 2021, by and between Monaker Group, Inc. and Soma Innovation Lab 8-K 10.3 3/22/2021  

 


10.38 Security Agreement dated November 23, 2020, by Monaker Group, Inc. in favor of Streeterville Capital, LLC   8-K 10.4 11/27/2020 001-38402 
10.39 $100,000 Convertible Note by and among Monaker Group, Inc. and HotPlay Enterprise Limited, effective as of November 24, 2020   8-K 10.5 11/27/2020 001-38402 
10.40 $350,000 Convertible Note by and among Monaker Group, Inc. and HotPlay Enterprise Limited, executed December 14, 2020 and effective as of December 11, 2020   8-K 10.1 12/14/2020 001-38402 
10.41*** Form of Lock-Up Agreement (December 2020 Offering)   8-K 10.1 12/31/2020 001-38402 
10.42 $150,000 Convertible Note by and among Monaker Group, Inc. and HotPlay Enterprise Limited, dated January 6, 2021   8-K 10.1 1/7/2020 001-38402 
10.43 Subsidiary Formation and Funding Agreement dated and effective January 12, 2021, by and between Monaker Group, Inc., NextTrip Group, LLC, HotPlay Enterprise Limited, and the stockholders of HotPlay   8-K 10.1 1/13/2020 001-38402 
10.44+@ Founding Investment and Subscription Agreement dated January 15, 2021, by and between Monaker Group, Inc., Jan C. Reinhart, and Reinhart Interactive IV AG   10-Q 10.3 1/19/2021 001-38402 
10.45+ Founding Shareholders’ Agreement dated January 15, 2021, by and between Monaker Group, Inc., Jan C. Reinhart, certain other shareholders of Reinhart Interactive IV AG, certain directors of Reinhart Interactive IV AG and Reinhart Interactive IV AG   10-Q 10.31 1/19/2021 001-38402 

 


10.46 Voting Agreement, dated and effective February 22, 2021, by and between William Kerby and Donald P. Monaco; each of the shareholders of preferred stock, common stock and/or future shareholders of shares of common stock, of Monaker Group, Inc., part thereto, and for certain limited purposes, each of the affiliates of such parties’ party thereto   8-K 10.1 2/26/2021 001-38402 
10.47 $9,000,000 Convertible Note by and among Monaker Group, Inc. and HotPlay Enterprise Limited, dated March 16, 2021   8-K 10.1 3/22/2021 001-38402 
10.48 $1,000,000 Convertible Note by and among Monaker Group, Inc. and HotPlay Enterprise Limited, dated March 19, 2021   8-K 10.2 3/22/2021 001-38402 
10.49 Joint Venture Agreement dated March 8, 2021, by and between Monaker Group, Inc. and Soma Innovation Lab   8-K 10.3 3/22/2021 001-38402 
10.50+ Note Purchase Agreement dated March 23, 2021, by and between Monaker Group, Inc. and Streeterville Capital, LLC   8-K 10.1 3/26/2021 001-38402 
10.51+ $9,370,000 Secured Promissory Note dated March 23, 2021, evidencing amounts owed by Monaker Group, Inc. to Streeterville Capital, LLC   8-K 10.1 3/26/2021 001-38402 

10.37+ Note Purchase Agreement dated March 23, 2021, by and between Monaker Group, Inc. and Streeterville Capital, LLC 8-K 10.1 3/26/2021  
10.38+ $9,370,000 Secured Promissory Note dated March 23, 2021, evidencing amounts owed by Monaker Group, Inc. to Streeterville Capital, LLC 8-K 10.2 3/26/2021  
10.39 $1,500,000 Investor Note dated March 23, 2021, evidencing amounts owed by Streeterville Capital, LLC to Monaker Group, Inc. 8-K 10.3 3/26/2021  
10.40 Security Agreement dated March 23, 2021, by Monaker Group, Inc. in favor of Streeterville Capital, LLC 8-K 10.4 3/26/2021  
10.41 March 23, 2021 Forbearance Letter between Monaker Group, Inc. and Streeterville Capital, LLC 8-K 10.5 3/26/2021  
10.42 Form of Agreement For Consulting Services to be Provided dated March 25, 2021, and entered into March 26, 2021 between Monaker Group, Inc. and the consultants party thereto 8-K 10.1 4/6/2021  
10.43 Form of Bill of Sale for Common Stock dated April 1, 2021, by and between Group, Inc. and the Sellers party thereto 8-K 10.1 4/7/2021  
10.44*** Form of Lock-Up Agreement (2020 Fiscal Year End Non-Executive Board Member Shares) 8-K 10.2 4/9/2021  
10.45*** Exchange Agreement dated April 8, 2021, by and between Monaker Group, Inc., William Kerby and Monaco Investment Partners II, LP 8-K 10.3 4/9/2021  
10.46*** Convertible Promissory Note in the amount of $430,889 dated April 8, 2021, by and between Monaker Group, Inc. and William Kerby 8-K 10.4 4/9/2021  
10.47*** Convertible Promissory Note in the amount of $585,425 dated April 8, 2021, by and between Monaker Group, Inc. and Monaco Investment Partners II, LP 8-K 10.5 4/9/2021  
10.48 $2,000,000 Convertible Note by and among Monaker Group, Inc. and HotPlay Enterprise Limited, dated April 15, 2021 8-K 10.1 4/19/2021  
10.49*** Monaker Group 2021 Equity Incentive Plan 8-K 10.2 4/19/2021  
10.50 Preferred Stock Exchange Agreement dated May 6, 2021, by and between Monaker Group, Inc. and International Financial Enterprise Bank, Inc. 8-K 10.1 5/11/2021  
10.51 First Amendment to Preferred Stock Exchange Agreement dated May 10, 2021, by and between Monaker Group, Inc. and International Financial Enterprise Bank, Inc. 8-K 10.2 5/11/2021  
10.52 Monaker Letter of Intent to Purchase Radiant Entities’ Axion Shares, by and between Monaker Group, Inc., and Radiant Ventures Limited S-3 10.98 5/13/2021  
10.53 Monaker Letter of Intent to Purchase Radiant Entities’ AXV Shares Amendment As of March 10, 2021, by and between Monaker Group, Inc., and Radiant Ventures Limited S-3 10.99  5/13/2021  
10.54 Form of Lockup (May 2021 Offering) 8-K 10.1 5/18/2021  
10.55 Shareholder Voting Representation Agreement by and among Monaker Group Inc., IDS, Inc. a/k/a IDS International Inc. a/k/a Internet Distribution Systems a/k/a International Distribution Systems, and Bill Kerby, dated effective May 18, 2021 8-K 10.3 5/21/2021  

 


10.52 $1,500,000 Investor Note dated March 23, 2021, evidencing amounts owed by Streeterville Capital, LLC to Monaker Group, Inc.   8-K 10.3 3/26/2021 001-38402 
10.53 Security Agreement dated March 23, 2021, by Monaker Group, Inc. in favor of Streeterville Capital, LLC   8-K 10.4 3/26/2021 001-38402 
10.54 March 23, 2021 Forbearance Letter between Monaker Group, Inc. and Streeterville Capital, LLC   8-K 10.5 3/26/2021 001-38402 
10.55 Form of Agreement For Consulting Services to be Provided dated March 25, 2021, and entered into March 26, 2021 between Monaker Group, Inc. and the consultants party thereto   8-K 10.1 4/6/2021 001-38402 
10.56 Form of Bill of Sale for Common Stock dated April 1, 2021, by and between Group, Inc. and the Sellers party thereto   8-K 10.1 4/7/2021 001-38402 
10.57*** Form of Warrant to Purchase Common Stock (March 2021 Grants)   8-K 10.1 4/9/2021 001-38402 
10.58*** Form of Lock-Up Agreement (2020 Fiscal Year End Non-Executive Board Member Shares)   8-K 10.2 4/9/2021 001-38402 
10.59*** Exchange Agreement dated April 8, 2021, by and between Monaker Group, Inc., William Kerby and Monaco Investment Partners II, LP   8-K 10.3 4/9/2021 001-38402 
10.60*** Convertible Promissory Note in the amount of $430,889 dated April 8, 2021, by and between Monaker Group, Inc. and William Kerby   8-K 10.4 4/9/2021 001-38402 

 


10.61*** Convertible Promissory Note in the amount of $585,425 dated April 8, 2021, by and between Monaker Group, Inc. and Monaco Investment Partners II, LP   8-K 10.5 4/9/2021 001-38402 
10.62 $2,000,000 Convertible Note by and among Monaker Group, Inc. and HotPlay Enterprise Limited, dated April 15, 2021   8-K 10.1 4/19/2021 001-38402 
10.63*** Monaker Group 2021 Equity Incentive Plan   8-K 10.2 4/19/2021 001-38402 
10.64 Preferred Stock Exchange Agreement dated May 6, 2021, by and between Monaker Group, Inc. and International Financial Enterprise Bank, Inc.   8-K 10.1 5/11/2021 001-38402 
10.65 First Amendment to Preferred Stock Exchange Agreement dated May 10, 2021, by and between Monaker Group, Inc. and International Financial Enterprise Bank, Inc.   8-K 10.2 5/11/2021 001-38402 
10.66 Monaker Letter of Intent to Purchase Radiant Entities’ Axion Shares, by and between Monaker Group, Inc., and Radiant Ventures Limited   S-3 10.98 5/13/2021 333-256060 
10.67 Monaker Letter of Intent to Purchase Radiant Entities’ AXV Shares Amendment As of March 10, 2021, by and between Monaker Group, Inc., and Radiant Ventures Limited   S-3 10.99  5/13/2021 333-256060 
10.68 Form of Lockup (May 2021 Offering)   8-K 10.1 5/18/2021 001-38402 

10.56 Master Development and Licensing Agreement by and between Monaker Group, Inc. and HotPlay Enterprise Limited, dated March 17, 2021 8-K 10.1 6/11/2021  
10.57 Amendment to Development Agreement by and between Monaker Group, Inc. and HotPlay Enterprise Limited, dated May 20, 2021 8-K 10.2 6/11/2021  
10.58 Master Development and Licensing Agreement by and between Monaker Group, Inc. and HotPlay Enterprise Limited, dated May 20, 2021 8-K 10.3 6/11/2021  
10.59 Exchange Agreement between Streeterville Capital, LLC and Monaker Group, Inc. dated June 22, 2021 8-K 10.1 6/25/2021  
10.60 Lock-Up Agreement dated June 30, 2021, by and between Monaker Group, Inc. and David Ng 8-K 10.1 7/7/2021  
10.61 Exchange Agreement between Streeterville Capital, LLC and NextPlay Technologies, Inc. dated July 15, 2021, and effective July 21, 2021 8-K 10.1 7/27/2021  
10.62# Share Exchange Agreement effective July 21, 2021, by and between NextPlay Technologies, Inc., formerly Monaker Group, Inc., and each of the sellers party thereto 8-K 10.2 7/27/2021  
10.63# Intellectual Property Purchase Agreement dated August 19, 2021, by and between NextPlay Technologies, Inc. and Fighter Base Publishing Inc.   8-K 10.1 8/23/2021  
10.64# Intellectual Property Purchase Agreement dated August 19, 2021, by and between NextPlay Technologies, Inc. and Token IQ Inc. 8-K 10.1 8/25/2021  
10.65 Consulting Agreement dated June 9, 2021, by and between GLM Consulting, Ltd., and NextPlay Technologies, Inc. 8-K 10.1 8/25/2021  
10.66 Exchange Agreement between Streeterville Capital, LLC and NextPlay Technologies, Inc. 8-K 10.1 9/3/2021  
10.67 Form of Exchange Agreement dated September 22, 2021, between NextPlay Technologies, Inc. and Hudson Bay Master Fund Ltd. 8-K 10.1 9/24/2021  
10.68 $900,000 Promissory Note dated September 22, 2021, by NextPlay Technologies, Inc. in favor of Hudson Bay Master Fund Ltd. 8-K 10.2 9/24/2021  
10.69 Preferred Stock Exchange Agreement dated and effective September 28, 2021, by and between, NextPlay Technologies, Inc. and NextBank International, Inc. 8-K 10.1 10/4/2021  
10.70# Note Purchase Agreement dated October 22, 2021, by and between NextPlay Technologies, Inc. and Streeterville Capital, LLC 8-K 10.1 10/25/2021  
10.71 $1,665,000 Secured Promissory Note dated October 22, 2021, evidencing amounts owed by NextPlay Technologies, Inc. to Streeterville Capital, LLC 8-K 10.2 10/25/2021  
10.72 Security Agreement by NextPlay Technologies, Inc. in favor of Streeterville Capital, LLC dated October 22, 2021 8-K 10.3 10/25/2021  

 


10.69 Shareholder Voting Representation Agreement by and among Monaker Group Inc., IDS, Inc. a/k/a IDS International Inc. a/k/a Internet Distribution Systems a/k/a International Distribution Systems, and Bill Kerby, dated effective May 18, 2021   8-K 10.1 5/21/2021 001-38402 
14.1 Code of Ethics   S-1/A 14.1 3/12/2009 333-154177 
14.2 Code of Business Conduct   S-1/A 14.2 3/12/2009 333-154177 
14.3 Whistleblower Protection Policy   8-K 14.1 4/25/2017 000-52669  
21.1* Subsidiaries X  8-K 16.1 5/21/2019 001-38402 
23.1* Consent of TPS Thayer, LLC X         
23.2* Consent of Thayer O’Neal Company, LLC X         
31.1* Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act X         
31.2* Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act X         
32.1** Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 X         
32.2** Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 X         
99.1 Charter of the Audit Committee    8-K 99.1 4/25/2017 000-52669  
99.2 Charter of the Compensation Committee    8-K 99.2 4/25/2017 000-52669  
99.3 Charter of the Nominating and Corporate Governance Committee    8-K 99.3 4/25/2017 000-52669  

 


10.73 Form of Securities Purchase Agreement, dated November 1, 2021, by and between NextPlay Technologies, Inc. and the investors party thereto. 8-K 10.1 11/3/2021  
10.74 Placement Agency Agreement, dated November 1, 2021, by and between NextPlay Technologies, Inc. and EF Hutton, a division of Benchmark Investments, LLC. 8-K 10.2 11/3/2021  
10.75 At the Market Offering Agreement, dated March 4, 2022, between NextPlay Technologies, Inc. and H.C. Wainwright & Co., LLC 8-K 10.1 3/4/2022  
10.76 Revenue Share Agreement, by and between NextPlay Technologies, Inc. and Go Game Pte Ltd. 8-K 10.1 4/5/2022  
10.77 Restrictive Covenant Agreement, by and between NextPlay Technologies, Inc. and David Ng. 8-K 10.2 4/5/2022  
10.78 Standstill Agreement, dated May 5, 2022, by and between NextPlay Technologies, Inc. and Streeterville Capital, LLC 8-K 10.1 5/11/2022  
10.79+ Note Purchase Agreement, dated May 5, 2022, by and between NextPlay Technologies, Inc. and Streeterville Capital, LLC 8-K 10.2 5/11/2022  
10.80 Secured Promissory Note, dated May 5, 2022, by and between NextPlay Technologies, Inc. and Streeterville Capital, LLC 8-K 10.3 5/11/2022  
10.81 Security Agreement, dated May 5, 2022, by NextPlay Technologies, Inc. in favor of Streeterville Capital, LLC 8-K 10.4 5/11/2022  
14.1 Code of Ethics S-1/A 14.1 3/12/2009  
14.2 Code of Business Conduct S-1/A 14.2 3/12/2009  
21.1* Subsidiaries       X
23.1* Consent of TPS Thayer, LLC       X
31.1** Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act       X
31.2** Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act       X
32.1** Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002       X
32.2** Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002       X
101.INS** XBRL Instance Document       X
101.SCH** XBRL Schema Document       X
101.CAL** XBRL Calculation Linkbase Document       X
101.DEF** XBRL Definition Linkbase Document       X
101.LAB** XBRL Label Linkbase Document       X
101.PRE** XBRL Presentation Linkbase       X
104** Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101 attachments)       X

101.INSXBRL Instance DocumentX
101.SCHXBRL Schema DocumentX
101.CALXBRL Calculation Linkbase DocumentX
101.DEFXBRL Definition Linkbase DocumentX
101.LABXBRL Label Linkbase DocumentX
101.PREXBRL Presentation Linkbase DocumentX

*Filed herewith.

**Furnished herewith.

***Indicates a management contract or any compensatory plan, contract or arrangement.

 

+ Certain schedules, exhibits, annexes and similar attachments have been omitted pursuant to Item 601(a)(5) and/or Item 601(b)(2) of Regulation S-K. A copy of any omitted schedule or exhibit will be furnished supplementally to the Securities and Exchange Commission upon request; provided, however that Monaker Group,NextPlay Technology, Inc. may request confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended, for any schedule or exhibit so furnished.

 

# Certain confidential portions of this Exhibit were omitted by means of marking such portions with brackets (“[****]”) because the identified confidential portions (i) are not material and (ii) would be competitively harmful if publicly disclosed.

 

@ Certain information has been redacted from the exhibit pursuant to Item 601(a)(6) of Regulation S-K (and replaced with #’s) as the disclosure of such information would constitute a clearly unwarranted invasion of personal privacy. A copy of any omitted information will be furnished supplementally to the Securities and Exchange Commission upon request; provided, however that Monaker Group,NextPlay Technology, Inc. may request confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended, for any information so furnished.

 

Item 16. Form 10–K Summary.

None.

 

None.

 174


 

 

SIGNATURES

 

Pursuant to the requirements of Section 13 or 15(d) 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.

 

Date: June 7, 202117, 2022MONAKER GROUP,NEXTPLAY TECHNOLOGIES, INC.
   

By:/s/ William KerbyNithinan “Jess” Boonyawattanapisut
  William KerbyNithinan “Jess” Boonyawattanapisut
  ChiefCo-Chief Executive Officer and Vice Chairman
  (Principal Executive Officer)

 

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

Signature Title Date
     
/s/ William KerbyNithinan “Jess” Boonyawattanapisut ChiefCo-Chief Executive Officer and Vice Chairman June 7, 202117, 2022
William KerbyNithinan “Jess” Boonyawattanapisut (Principal Executive Officer) and Director  
     
/s/ Sirapop “Kent” TaepakdeeWilliam Kerby Chief FinancialCo-Chief Executive Officer and Vice President of FinanceDirector June 7, 202117, 2022
Sirapop “Kent” Taepakdee(Principal Financial and Accounting Officer)
/s/ Pasquale “Pat” LaVecchiaDirectorJune 7, 2021
Pasquale “Pat” LaVecchiaWilliam Kerby    
     
/s/ Donald P. MonacoSirapop “Kent” Taepakdee ChairmanChief Financial Officer June 7, 202117, 2022
Donald P. MonacoSirapop “Kent” Taepakdee  (Principal Financial and Accounting Officer)
/s/ J. Todd BonnerCo-Chairman of the Board of DirectorsJune 17, 2022
J. Todd Bonner    
     
/s/ Doug CheckerisDonald P. Monaco Director June 7, 202117, 2022
Doug CheckerisDonald P. Monaco    
     
/s/ Simon OrangeKomson Kaewkham Director June 7, 202117, 2022
Simon OrangeKomson Kaewkham    
     
/s/ Rupert Duchesne /s/ Athid “Tom” Nanthawaroon  Director June 7, 202117, 2022
Rupert DuchesneAthid “Tom” Nanthawaroon      
     
/s/ Robert “Jamie” Mendola, Jr.Yoshihiro Obata Director June 7, 202117, 2022
Robert “Jamie” Mendola, Jr.Yoshihiro Obata      
     
/s/ Alexandra C. ZubkoCarmen Diges Director June 7, 202117, 2022
Alexandra C. ZubkoCarmen Diges  
/s/ Farooq MoosaDirectorJune 17, 2022
Farooq Moosa  
/s/ Edward Terrence Gardner, Jr.DirectorJune 17, 2022
Edward Terrence Gardner, Jr.    

  


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