UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

☒

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

For the quarterly period ended: May 31, ~~2021~~2022

☐

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

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

For the transition period from ___ to _______

Commission File No. 001-38402

(Exact name of registrant as specified in its charter)

Nevada		26-3509845
(State or other jurisdiction of incorporation or formation)		(I.R.S. Employer Identification Number)

1560 Sawgrass Corporate Parkway, Suite 130, Sunrise, Florida		33323
(Address of principal executive offices)		(Zip Code)

(954) 888-9779

(Registrant’s telephone number, including area code)

~~Monaker Group, Inc.~~

~~(Former name, former address and former fiscal year, if changed since last report)~~

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock,

~~$0.00001~~ $0.00001 Par Value Per Share

~~NXTP~~

NXTP

The NASDAQ Stock Market LLC

(Nasdaq Capital Market)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or 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 (§232.405 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, a smaller reporting company, or an emerging growth company. See the definitions of “~~large~~“large accelerated filer,” “~~accelerated filer~~”“accelerated filer” and “~~smaller~~“smaller reporting ~~company~~”company” and “~~emerging~~“emerging growth ~~company~~”company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☒	Smaller reporting company ☒
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

As of July 14, ~~2021,~~2022 the registrant had ~~87,100,403~~117,913,353 shares of its common stock, par value $0.00001 per share, outstanding.

NEXTPLAY TECHNOLOGIES, INC.,

formerlyMONAKER GROUP, INC.

FORM 10-Q

For the Quarter Ended ~~MAY~~May 31, ~~2021~~2022

TABLE OF CONTENTS

CAUTIONARYNOTE REGARDING FORWARD-LOOKING STATEMENTS	1
~~WHEREYOU CAN FIND OTHER INFORMATION~~	3ii

~~PART I – FINANCIAL~~WHERE YOU CAN FIND OTHER INFORMATION	vi

PART I~~tem~~ – FINANCIAL INFORMATION	1

Item 1. F~~inancial~~ S~~tatements~~Financial Statements	1
Condensed Consolidated balance sheets (UNAUDITED)	1
Condensed Consolidated Statements of Operations, net and comprehensive loss (UNAUDITED)	2
Condensed Consolidated Statements of Stockholders’ Equity (UNAUDITED)	3
Condensed Consolidated Statements of Cash Flows (UNAUDITED)	4
~~Consolidated Balance Sheet~~	4
~~Consolidated Statement of Operations and Comprehensive Loss (Unaudited)~~	5
~~Consolidated Statement of Stockholders’ Equity For the three months ended May 31, 2021 and 2020 (Unaudited)~~	6
~~Consolidated Statement of Cash Flows (Unaudited)~~	7
Notes to the condensed Consolidated Financial Statements (Unaudited)	85
I~~tem~~ Item 2. M~~anagement’s~~ D~~iscussion~~Management’s Discussion and A~~nalysis~~ Analysis of F~~inancial~~ C~~ondition~~ Financial Condition and R~~esults~~ Results of O~~perations~~ Operations	3544
I~~tem~~ Item 3. Quantitative and Qualitative Disclosures About Market Risk	4852
I~~tem~~ Item 4. Controls and ~~Procedures~~Procedures.	4852

PART II – OTHER INFORMATION	53

I~~tem~~ Item 1. Legal Proceedings	5053
I~~tem~~ Item 1A. Risk Factors	5053
I~~tem~~ Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	5854
I~~tem~~ Item 3. Defaults Upon Senior Securities	5954
I~~tem~~ Item 4. Mine Safety Disclosures	5954
I~~tem~~ Item 5. Other Information	5954
I~~tem~~ Item 6. Exhibits	6055

~~Table of Contents~~

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (“~~Report~~”Report”), including “~~Management’s~~“Management’s Discussion and Analysis of Financial Condition and Results of Operations,” contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, regarding future events and the future results of NextPlay Technologies, Inc., formerly Monaker Group, Inc. (the “~~Company~~”“Company”), that are based on current expectations, estimates, forecasts, and projections about the ~~industry~~industries in which the Company operates and the beliefs and assumptions of the management of the Company. Words such as “~~expects,~~“expects,” “~~anticipates,~~“anticipates,” “~~targets,~~“targets,” “~~goals,~~“goals,” “~~projects,~~“projects,” “~~intends,~~“intends,” “~~plans,~~“plans,” “~~believes,~~“believes,” “~~seeks,~~“seeks,” “~~estimates,~~“estimates,” variations of such words, and similar expressions are intended to identify such forward-looking statements. These forward-looking statements are only predictions and are subject to risks, uncertainties and assumptions that are difficult to predict. In particular, as discussed in greater detail below, our financial condition and results could be materially adversely affected by the continued impacts and disruptions caused by the novel coronavirus ~~(COVID-19)~~(“COVID-19”) global pandemic and governmental responses thereto. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking ~~statements.~~statements included in this Report. Factors that might cause or contribute to such differences include, but are not limited to, those discussed elsewhere in this Report, including under “~~Risk Factors~~”the section entitled “Risk Factors”, and in other reports the Company files with the Securities and Exchange Commission (“~~SEC~~”SEC”), including the Company’s Annual Report on Form 10-K for the year ended February 28, ~~2021,~~2022, as filed with the SEC on June ~~8, 2021~~21, 2022 (under the heading “~~Risk Factors~~”“Risk Factors” and in other parts of that report). The Company undertakes no obligation to revise or update publicly any forward-looking statements for any reason, except as otherwise required by law.

The following discussion is based upon our unaudited Condensed Consolidated Financial Statements included elsewhere in this Report, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, derivative liabilities and related disclosure of contingencies. Each of these decisions has some impact on the financial results for any given period. In making these decisions, we consider various factors including contractual obligations, customer satisfaction, competition, internal and external financial targets and expectations, and financial planning objectives. On an on-going basis, we evaluate our estimates, including those related to ~~allowances for doubtful accounts, impairment~~the fair value of ~~long-term assets, especially goodwill and~~investments, the carrying amounts of intangible assets, ~~assumptions used~~depreciation and amortization, deferred income taxes, purchase price allocation in ~~the valuation of stock-based compensation,~~connection with business combinations and ~~litigation.~~allowance for credit losses. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Report, and in other reports we file with the SEC, ~~and~~including in our most recent Annual Report on Form 10-K. All references to years relate to the ~~calendar~~Company’s fiscal year ended February 28 or 29 (during leap years) of the particular year.

Summary Risk Factors

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

~~● Combining HotPlay Enterprise Limited (“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;

● 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;

~~● 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 are secured by a security interest over substantially all of its assets;~~

	●	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 our 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;

	●	The sale of our travel and media businesses is contingent upon the satisfaction of a number of conditions, may not be completed on the currently contemplated timeline, or at all, and may not achieve the intended benefits;

	●	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;

	●	A 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;

	●	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;

	●	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 and prospects could be harmed;

	●	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;

	●	HotPlay’s go-to-market strategy and corresponding timeline are 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;

~~Table of Contents~~

~~● The Company will need to raise additional funding to support its operations, which funding may not be available on favorable terms, if at all;~~

iii

~~● 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 may have a material adverse effect on the Company;~~

● 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 lose all or part of your investment;~~

~~● The officers and directors of the Company have the ability to exercise significant influence over the Company;~~

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

~~● The market 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;~~

	●	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;

	●	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;

	●	Our success is subject to the development of new or upgraded products, services and features over time;

	●	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 requirements for 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;

~~Table of Contents~~

~~● 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, regulatory and other risks associated therewith; and

~~● Those discussed under the caption “Risk Factors” of this Report.~~

	●	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.

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.~~amended, with the SEC. The SEC maintains a website (~~https:~~(https://~~www.sec.gov~~)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.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.

3vi

~~Table of Contents~~

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

~~Monaker Group,~~NextPlay Technologies, Inc.

Condensed Consolidated Balance ~~Sheet~~Sheets

As of

May 31, 2021
(Unaudited)

February 28, 2021
(Audited)

Assets
Current Assets
Cash $ 7,525,898 $ 2,640,988
Prepaid expenses and other current assets 2,036,918 1,864,279
Advance for investments 17,147,856 —
Investment in unconsolidated affiliates - short-term 42,227 264,884
Security Deposits 238,704 258,296
Notes Receivable, related parties 7,657,024 7,657,024
Other Receivable, related parties 165,613 216,647
Total current assets 34,814,240 12,902,118

Non-current Assets
   Investment in unconsolidated affiliates – long term 3,016,143 4,912,111
   Website development costs and intangible assets, net 10,571,306 8,081,718
   Fixed Assets, net 121,568 101,573
   Operating lease right-of-use asset 1,257,820 —
Total assets $ 49,781,077 $ 25,997,520

Liabilities and Stockholders’ Equity
Current Liabilities
Line of Credit and Notes Payable, net $ 9,096,237 $ 1,807,462
Convertible Notes Payable, related parties 16,016,314 3,000,000
Accounts payable and accrued expenses 1,732,719 1,793,239
Other current liabilities 95,948 234,372
Operating lease liability 1,257,820 —
Total current liabilities 28,199,038 6,835,073

Total liabilities 28,199,038 6,835,073

Commitments and Contingencies

Stockholders’ equity
Series A Preferred Stock, $0.01 par value; 3,000,000 authorized; no shares issued and outstanding at May 31, 2021 and February 28, 2021, respectively — —
Series B Preferred Stock, $0.00001 par value; 10,000,000 authorized; 10,000,000 and 10,000,000 shares issued and outstanding at May 31, 2021 and February 28, 2021, respectively 100 100
Series C Preferred Stock, $0.00001 par value; 3,828,500 authorized; 3,828,500 and 3,828,500 shares issued and outstanding at May 31, 2021 and February 28, 2021, respectively 38 38
Common stock, $0.00001 par value; 500,000,000 shares authorized; 23,454,203 and 18,765,839 shares issued and outstanding at May 31, 2021 and February 28, 2021, respectively 234 187
Additional paid-in-capital 162,387,810 151,427,224
   Currency Translation 48,831 53,712
   Accumulated deficit (140,910,961 ) (132,340,979 )
Stockholders’ equity attributable to parent 21,526,052 19,140,282
    Non-Controlling Interest 55,987 22,165
Total stockholders’ equity $ 21,582,039 $ 19,162,447
Total liabilities and total stockholders’ equity $ 49,781,077 $ 25,997,520

	May 31, 2022			February 28, 2022
	(Unaudited)			(Audited)
Assets
Current assets
Cash and cash equivalents	$	2,406,475		$	4,282,110
Short term investments		305,271			304,509
Loans receivable, net		19,982,775			16,556,288
Loans receivable – related parties, net		705,000			725,000
Unbilled receivables		4,619			2,179
Other receivables		432,075			339,233
Other receivables, related parties		100,000			155,425
Prepaid expenses and other current assets		1,250,732			826,419
Advances for investments		1,977,213			3,227,117
Investments in unconsolidated affiliates: Short-term		4,188			8,722
Assets held for sale - current		28,514,136			7,332,994
Total current assets	$	55,682,484		$	33,759,996
Non-current assets
Investments in unconsolidated affiliates: Long-term		6,258			6,258
Convertible notes receivable, related party		4,594,214			4,594,214
Intangible assets, net		15,874,162			9,883,789
Goodwill		27,949,554			27,949,554
Computers, furniture and equipment, net		396,101			366,499
Operating lease right-of-use asset		1,554,144			1,894,654
Security deposits		428,943			177,972
Assets held for sale – non current		—			21,120,557
Total non-current asset	$	50,803,376		$	65,993,497
Total assets	$	106,485,860		$	99,753,493

Liabilities and stockholders’ equity
Current liabilities
Line of credit and notes payable, net	$	4,840,139		$	4,463,471
Accounts payable and accrued expenses		6,940,176			4,288,575
Accounts payable and accrued expenses – related parties		44,685			433,814
Other current liabilities		130,341			127,779
Current portion of operating lease liability		257,340			218,181
Other current liabilities - customer demand deposits payable		18,960,031			7,497,465
Notes payable - related party		733,396			765,040
Liabilities held for sale - current		9,975,136			9,708,053
Total current liabilities	$	41,881,244		$	27,502,378

Non-current liabilities
Note payable long term, related parties		—			966,314
Operating lease liability, net of current portion		1,452,347			1,543,627
Other long-term liability		8,114			6,087
Liabilities held for sale - non current		—			1,873,889
Total non-current liabilities	$	1,460,461		$	4,389,917
Total liabilities	$	43,341,705		$	31,892,295
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 May 31, 2022 and February 28, 2022, respectively		—			—
Series B Preferred stock, $0.00001 par value; 10,000,000 authorized; 0 and 0 shares issued and outstanding at May 31, 2022 and February 28, 2022, respectively		—			—
Series C Preferred stock, $0.00001 par value; 3,828,500 authorized; 0 and 0 shares issued and outstanding at May 31, 2022 and February 28, 2022, respectively		—			—
Series D Preferred stock, $0.00001 par value; 6,100,000 authorized; 0 and 0 shares issued and outstanding at May 31, 2022 and February 28, 2022, respectively		—			—
Common stock, $0.00001 par value; 500,000,000 shares authorized; 111,736,081 and 108,360,020 shares outstanding at May 31, 2022 and February 28, 2022, respectively		1,118			1,084
Treasury stock		(771,453	)		(771,453	)
Additional paid-in-capital		104,414,539			104,393,361
Accumulated other comprehensive income		(746,819	)		(218,703	)
Accumulated deficit		(44,858,461	)		(39,173,079	)
Stockholders’ equity attributable to parent	$	58,038,924		$	64,231,210
Non-Controlling Interest in consolidated subsidiaries		1,605,586			3,629,988
Non-Controlling Interest in unconsolidated affiliates held for sale		3,499,645			—
Total stockholders’ equity		63,144,155			67,861,198
Total liabilities and stockholders’ equity	$	106,485,860		$	99,753,493

The accompanying notes are an integral part of these condensed consolidated financial statements.

NextPlay Technologies, Inc.

~~Table~~

Condensed Consolidated Statements of ~~Contents~~

The accompanying notes are an integral part of these condensed consolidated financial statements.

Note 1 – Summary of Business Operations and Significant Accounting Policies

~~Monaker Group,~~NextPlay Technologies, Inc., together with its consolidated subsidiaries (collectively, “NextPlay,” “we,” “our,” “us,” or the “Company”), is building a technology solutions company, offering games, in-game advertising, digital asset products and services, and connected TV 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.

As of May 31, 2022, NextPlay is organized into two divisions: (i) NextMedia, the Company’s Interactive Digital Media Division and (ii) NextFinTech, the Company’s Finance and Technology Division.

In the Interactive Digital Media Division, NextPlay closed its acquisition of HotPlay Enterprise Limited and its ~~subsidiaries~~In-Game Advertising (“~~Monaker”, “~~we~~”, “our”, “~~us~~”, or “Company~~”IGA”) is an innovative technology company that is building next generation solutions to power the travel, gaming, and cryptocurrency industries. We believe the most promising part of the business plan is our ability to achieve shareholder value through acquisition and organic growth that presents new opportunities in the leisure space and strengthens our existing technology platforms.platform on June 30, 2021.

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 ~~operation serves three major constituents: (1) property managers, (2) travelers,~~related services such as travel finance and (3) other travel/lodging distributors. Property managers integrate their detailed property listings into the Monaker Booking Engine with the goal of reaching a broad audience of travelers seeking ALRs, through distribution channels they could not access otherwise.travel insurance, subject to regulatory approval and licensing.

~~Through our~~Our Company, in accordance with Thailand foreign ownership laws, holds an indirect control of Longroot ~~Thailand (see Note 6)~~(Thailand) Company Limited (“Longroot”), ~~we, through Longroot Thailand, offer~~which operates in financial advisory service and owns an ~~ICO~~Initial Coin Offering (“ICO”) Portal ~~that provides investors~~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 ~~digital investment product~~asset class, which the Company’s management believes will create significant opportunities to accelerate products and ~~gives suppliers~~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 ~~new digital currency financing mechanism. Monaker is planning~~$15,000 annual license fee, (ii) submission of evidence reflecting paid up capital amounting to MYR $10.0 mil (approximately to $2,260,000 US), (iii) submission of proof of registration as a member of Labuan International Insurance Association, (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 were 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 ~~technology~~general insurance license to issue primary insurance products and ~~digital asset capabilities~~the reinsurance license to ~~create regulated cryptocurrencies designed~~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.

Strategic Sale of Reinhart Digital TV (Zappware) and NextTrip to TGS Esports, Inc.

On June 28, 2022, the Company entered into a series of agreements, including a securities exchange agreement, with William Kerby, the Company’s co-Chief Executive Officer and director, Donald P. Monaco, a director of the Company, and British Columbia-based TGS E-Sports Inc. (TSX-V: TGS, OTC: TGSEF) (“TGS”), a public company whose securities are listed for trading on the Canadian TSX Venture Exchange, pursuant to which the Company has agreed to sell the Company’s travel business, NextTrip Group, LLC (“NextTrip”), and its 51% ownership of Reinhart Digital TV (the 100% owner of Zappware) to TGS in exchange for securities of TGS as discussed in further detail below. TGS, is a leading esports tournament solutions provider.

Prior to the execution of the securities exchange agreement, NextTrip issued an aggregate of 915,000 units in NextTrip to Messrs. Kerby and Monaco to resolve certain management unit issuances provided for in NextTrip’s Operating Agreement as consideration for services rendered.

As consideration for the sale of Reinhart and NextTrip, upon closing of the transaction, (i) the Company will receive 232,380,952 shares of newly created nonvoting convertible preferred stock of TGS (the “TGS Preferred”), valued at $12.2 million, and (ii) Messrs. Kerby and Monaco, both of whom hold certain equity interests in NextTrip (discussed above), will receive an aggregate of 69,714,286 shares of TGS common shares, valued at $3.66 million, of which 11,619,048 TGS common shares will be held in escrow for a period of time. The TGS Preferred shares will be redeemable in certain situations, can be sold subject to certain transfer restrictions (including a right of first refusal in favor of TGS), and may be converted into shares of TGS common shares in certain limited circumstances, including mandatory conversion upon the occurrence of certain events. In the event that the TGS Preferred shares are converted into shares of TGS common shares by the Company at any time, the Company is obligated to distributed all such shares of TGS common shares in a stock dividend to its shareholders. Concurrently with a determination to convert the TGS Preferred shares into shares of TGS common shares, if ever, the Company will set a shareholder record date for a special dividend to distribute all of the common shares of TGS held by the Company to the Company’s shareholders, on a pro-rata basis.

In addition to the securities exchange agreement, the Company, NextTrip, Reinhart and TGS also entered into a separation agreement on June 28, 2022, to further document the separation of NextTrip and Reinhart from the Company and to assign, transfer and convey certain assets and liabilities held in NextTrip or the Company’s name, respectively, to NextTrip or the Company, respectively, to allow ~~consumers~~for the separation of the businesses in accordance with the securities exchange agreement at closing of the transaction. The separation agreement also provides for the termination of certain intercompany agreements and accounts by and between the parties at closing of the transaction, sets rights related to ~~invest~~confidentiality, non-disclosure and maintenance of attorney-client privilege matters, and also provides for a mutual release by and among the Company, NextTrip and Reinhart for all pre-closing claims between themselves and their officers, directors, affiliates, successors and assigns.

In addition, the separation agreement provides for the contribution of (i) $1.5 million to NextTrip and (ii) an additional $1.5 million in ~~unique revenue streams~~ten (10) equal monthly installments beginning July 1, 2022, in ~~wholesale travel, real estate homes~~exchange for NextTrip, as of May 1, 2022, agreeing to assume the ongoing operating expenses of NextTrip and ~~hotels, gaming~~Reinhart. NextTrip has also agreed to assume payments under that certain payment obligation of the Company pursuant an Amendment to Intellectual Property Purchase Agreement effective May 18, 2021, by and between the Company, IDS Inc., TD Assets Holding LLC, and Ari Daniels in the approximate amount of $2,500,000, provided, however, that, if the Company fails to make any of the above installment payments within five (5) business days of being due, that such IDS payment obligation reverts back to the Company.

Closing of the transaction remains subject to various conditions, including (without limitation) regulatory approvals, approval of certain related matters by TGS’ shareholders and consummation of a financing by TGS, and is expected to occur in the second half of 2022. No assurances can be provided that the closing conditions will be satisfied, or that the transaction will be consummated on the anticipated timeline, or at all.

The transaction, once consummated, is expected to streamline the Company’s business operations and management, improve capital allocation, and is expected to unlock shareholder value by offering investors a pure-play investment in the Digital Media and Financial Technology sectors.

On July 23, 2020, the Company (then known as Monaker Group, Inc. (“Monaker”)) entered into a Share Exchange Agreement (as amended from time to time, the “Share Exchange Agreement”) with HotPlay Enterprise Limited (“HotPlay”) and the stockholders of HotPlay (the “HotPlay Stockholders”). Pursuant to the Share Exchange Agreement, Monaker exchanged 52,000,000 shares of its common stock for 100% of the issued 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 as a reverse acquisition with HotPlay being deemed the acquiring company for accounting purposes. The comparative figures included in the accompanying condensed consolidated financial statements for the period as from incorporation date to May 31, 2021 represents financial position and operating results of HotPlay Enterprise Ltd.

As of May 31, 2022, the Company is in the process of assessing the fair value of the identifiable assets acquired and ~~digital advertising – as well as potential token and loyalty program opportunities complementary to Monaker’s gaming (planned through~~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 ~~HotPlay (see Note 2~~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 ~~Note 14))~~recognize additional assets or liabilities, if it obtains new information about facts and ~~travel businesses.~~circumstances that existed as of the acquisition date.

These unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“US ~~GAAP~~”GAAP”) for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, the condensed consolidated financial statements do not include all of the information and footnotes required by ~~generally accepted accounting principles~~US GAAP for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included and such adjustments are of a normal recurring nature. These condensed consolidated financial statements should be read in conjunction with the financial statements for the fiscal year ended February 28, ~~2021~~2022 and notes thereto and other pertinent information contained in the Company’s Annual Report on Form 10-K, which the Company ~~has~~ filed with the Securities and Exchange Commission (the “~~SEC~~”“SEC”) on June ~~8, 2021.~~21, 2022.

The results of operations for the three months ended May 31, ~~2021,~~2022 are not necessarily indicative of the results to be expected for the full fiscal year ending February 28, ~~2022.~~2023.

The accompanying condensed consolidated financial statements include the accounts of the Company and its consolidated subsidiaries. All material ~~inter- company~~inter-company transactions and accounts have been eliminated in consolidation.

The preparation of financial statements in conformity with US 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 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 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.

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 May 31, ~~2021~~2022, and February 28, ~~2021.~~2022.

The short term investments are a short-term cash deposit with a maturity date more than three months, as required by the Office of the Commissioner of Financial Institutions (“OCIF”) for business purpose of one of the Company’s subsidiaries.

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 credit loss, and unbilled receivables are measured at the amount of consideration that the Company is entitled to, less credit loss. The Company calculates its allowance for current 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 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 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.

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 CECL in the Company’s loan portfolio over its expected life, which is the contract term being the reasonable and supportable period that we 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 susceptible to significant revision as more information becomes available. Due to potential changes in conditions, it is possible that changes in estimates will occur and that such changes could be material to the amounts reported in the Company’s financial statements.

Unbilled receivable represents costs associated with software development according to contracts with customers. Unbilled receivables mainly consist of employee and payroll related expenses and amounts recorded on a project where billing milestones have not yet been achieved.

The Company records cash paid in advance for goods and/or services to be received in the future as prepaid expenses. Prepaid expenses are expensed over time according to the period ~~where it is~~ indicated on the respective contract. ~~A straight-line amortization~~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.

Advances for investments represent cash deposits transferred to the potential seller as a deposit payment, as stipulated in the relevant investment purchase agreement, mainly for potential acquisitions of assets or businesses.

Investment in unconsolidated affiliates is recognized at cost less valuation loss.

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 useful life of 3 - 5 years, respectively. The furniture and fixtures are depreciated over a useful life of 5 and 10 years, respectively. Straight-line depreciation is used for ~~it.~~all computers, laptops, furniture and equipment.

~~The Company accounts 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 infrastructure development stage that meet specific criteria are capitalized and costs incurred in the day-to-day operation of the website are expensed as incurred. All costs associated with the websites are subject to straight-line amortization over a three-year period.

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.

The Company accounts 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 infrastructure development stage that meet specific criteria are capitalized and costs incurred in the day-to-day operation of the website are expensed as incurred. All costs associated with the websites are subject to straight-line amortization over a three-year period.

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 reporting segments which are regularly reviewed by the Company’s Chief Operating Decision Maker (“CODM”). The CODM allocates 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 the CODM regularly reviews the operating results of the components. Certain components share similar economic characteristic and are deemed to be a single reporting unit.

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. Goodwill associated with reporting units being sold are included in the carrying amount of assets held for sale at the reporting date.

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:

In impairment testing, goodwill acquired in a business combination is allocated to each of the Company’s reporting units that are expected to benefit from the synergies of the combination. The Company ~~purchases computers, laptops, furniture~~estimates the recoverable amount of each reporting unit to which the goodwill and ~~fixture. The computers~~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 ~~laptops~~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 ~~recorded as fixed assets with~~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 ~~useful life~~valuation model that, based on information available, reflects the amount that the Company could obtain from the disposal of ~~3 years. The furniture and fixture are recorded as a fixed~~the asset ~~with a useful life~~in an arm’s length transaction between knowledgeable, willing parties, after deducting the costs of ~~5 years. Straight-line depreciation is used for all fixed assets.~~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 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 payable are recognized at cost, net transaction costs. Transaction costs are amortized over the terms of notes payable using effective interest rate method.

Customer deposit represents cash demand deposits payable received from customers at NextBank.

The Company uses the acquisition method of accounting in accordance with ASC 805, Business Combinations (“ASC ~~805~~”805”). 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.

~~In accordance with ASC 350-30-65 “Goodwill and Other Intangible Assets~~”,Non-controlling interests represent the ~~Company assesses~~equity in a subsidiary that is not attributable directly or indirectly to the ~~impairment of identifiable intangible assets whenever events or changes in circumstances indicate that~~parent. At the ~~carrying value may not be recoverable. Factors~~acquisition date, the ~~Company considers important, which could trigger an impairment review include the following:~~

When the Company determines that the carrying value of an intangible asset may not be recoverable based upon the existence of one or more of the above indicators of impairment and the carrying value of the asset cannot be recovered from projected undiscounted cash flows, the Company records an impairment charge. The Company measures any impairment based on a projected discounted cash flow method using a discount rate determined by management to be commensurate with the risk inherent to the current business model. Significant management judgment is required in determining whether an indicator of impairment exists and in projecting cash flows. Intangible assets that have finite useful lives are amortized over their useful lives. The Company incurred amortization expense of $160,618 and $79,059 during the three months ended May 31, 2021 and 2020, respectively.non-controlling interest at fair value.

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 rights are recorded as debt discount and as additional paid-in-capital. Debt discount is amortized to interest expense over the life of the debt.

The Company prepares the consolidated financial statements ~~of its foreign subsidiaries~~ using ~~the local currency~~U.S. dollars as the functional currency. The assets and liabilities of the Company’s foreign subsidiaries are translated into U.S. dollars at the rates of exchange at the balance sheet date with the resulting translation adjustments included as a separate component of stockholders’ 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.

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): 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.

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.

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 are 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 three months ended May 31, 2022 and 2021, ~~convertible notes payables~~warrants were excluded from the computation of diluted net loss per share, as the result of the computation was anti-dilutive. The Company presents earnings per share from continuing operation and discontinued operation separately.

In accordance with ASC 306, the sale of Reinhart/Zappware and NextTrip qualified as assets and liabilities held for sale as: (i) the Company has committed to a plan to sell, (ii) the disposal entities are available for immediate sale, (iii) the buyer has been identified and has committed to purchase, subject to satisfaction of certain closing conditions, and (iv) it is probable to occur within 1 year from the date of the classification. Assets and liabilities held for sale are measured at the lower of carrying amount and the fair value less cost to sell. Computer and equipment and intangible assets are not depreciated or amortized once classified as held for sale.

Assets and liabilities classified as held for sale are presented separately as current items in the statement of financial position as well as for prior period. Discontinued operations are excluded from the results of continuing operations and are presented as a single amount as profit or loss after tax from discontinued operations in the statement of comprehensive loss.

~~We recognize~~The 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 ~~customer~~performance obligation is satisfied. Types of revenue consist of:

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, bears risks on its loan products, has ~~purchased~~discretion in establishing the ~~product,~~price, hence it acts as principal, and recognizes revenues at the ~~occurrence~~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 ~~date of travel~~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 ~~date of cancellation has expired,~~cash-basis or cost recovery method, until qualifying for return to accrual. Loans are returned to accrual status when all the ~~sales price is fixed or determinable~~principal and ~~collectability is~~interest amounts contractually due are brought current and future payments are reasonably assured.

~~Revenue for customer travel packages purchased directly from the Company~~Financial services are ~~recorded gross (the amount paid to the Company by the customer is shown~~categorized as ~~revenue and the cost of providing the respective travel package is recorded to cost of revenues).~~follows:

~~We generate our revenues from sales directly to customers as well as through other distribution channels of tours and activities at destinations throughout the world.~~

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 from finance and technology mainly consists of ~~cost~~interest expense, loan related commissions, amortization of ~~the tours~~core banking software and ~~activities, commissions~~technology facilities and ~~merchant fees charged by credit card processors.~~infrastructures.

Selling and promotion expenses consist primarily of advertising and promotional expenses, expenses related to our participation in industry conferences, and public relations ~~expenses. The~~expenses; the expense ~~for the three months ended May 31, 2021 and May 31, 2020, was $356,215 and $73,205, respectively.~~is recognized when incurred.

Stock-based compensation is accounted for based on the requirements of ASC 718, “~~Compensation~~“Compensation – Stock ~~Compensation~~”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.~~award and recognizes forfeitures as when they occur.

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~~accounts for the warrants 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. Most of warrant agreements contain fixed strike prices and a ~~result, awards made to independent consultants/contractors on or subsequent to January 1, 2018 are measured based on the grant date closing price~~fixed number of shares that may be issued upon exercise of the ~~Company’s common stock consistent~~warrants at the fixed strike price, with ~~awards made~~certain provisions that may result in changes to the ~~Company’s employees and directors. Unvested awards issued~~strike price in certain circumstances, subject to ~~independent consultants/ contractors as~~stockholder approval. All such warrant agreements are exercisable at the option 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 valueholder and settled in shares of the ~~awards made to independent contractors would be measured based on the fair value~~Company. The warrants are qualified as equity-linked instrument embedded in a host instrument, whereby they do not meet definition of ~~the equity instrument as~~derivative; therefore it is more reliably measurable than the fair value of the consideration received. The Company used the grant date as the performance commencement date, 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 benot required to ~~accelerate, increase or cancel any remaining unrecognized or previously recorded stock-based compensation expense.~~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 ~~shall be~~is measured as the excess, if any, of the fair value of the modified award determined in accordance with the provisions of ~~this~~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.

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 it 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 Company uses Level 3 inputs for its valuation methodology for the warrant derivative liabilities and embedded conversion option ~~liabilities.~~liabilities, if any.

Financial instruments consist principally of cash, ~~accounts receivable,~~ investments in unconsolidated affiliates, ~~notes receivable,~~other receivables, net, 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.

The Company utilizes operating leases for its offices. 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.

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.

The Company’s chief operating decision makers of the Company 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.

As a result of the proposed strategic sale of Reinhart/Zappware and NextTrip, as of May 31, 2022, those entities were no longer consolidated nor treated as a division of the Company; accordingly, for the three-month period ended May 31, 2022, the Company had two remaining reportable business segments: NextFinTech and NextMedia.

Certain comparative figures have been reclassified to conform with the current period presentation.

~~On December 18, 2019,~~In June 2022, the FASB issued ASU 2022-03, ASC Subtopic 820 “Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions”. The FASB is issuing this Update (1) to clarify the guidance in Topic 820, Fair Value Measurement, when measuring the fair value of an equity security subject to contractual restrictions that prohibit the sale of an equity security, (2) to amend a related illustrative example, and (3) to introduce new ~~guidance~~disclosure requirements for equity securities subject to contractual sale restrictions that ~~simplifies~~are measured at fair value in accordance with Topic 820.

Stakeholders asserted that the ~~accounting for income taxes as part~~language in the illustrative example resulted in diversity in practice on whether the effects of a contractual restriction that prohibits the ~~Board’s overall initiative to reduce complexity~~sale of an equity security should be considered in ~~accounting standards. Amendments include the removal of certain exceptions~~measuring that equity security’s fair value. Some stakeholders apply a discount to the ~~general~~price of an equity security subject to a contractual sale restriction, whereas other stakeholders consider the application of a discount to be inappropriate under the 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.~~820

For public business entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal ~~years, beginning after December 15, 2020.~~years. For all other entities, the amendments are effective for fiscal years beginning after December 15, ~~2021,~~2024, and interim periods within those fiscal ~~years beginning after December 15, 2022.~~

years. Early adoption ~~of the amendments~~ is permitted ~~including adoption in any~~for both interim ~~period for (1) public business entities for periods for which~~and annual financial statements that have not yet been issued ~~and (2) all other entities for periods for which financial statements have not yet been~~or 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.

The Company ~~has adopted~~is still evaluating the ~~standard, which did not have a significant~~ impact ~~to our~~of this pronouncement on the consolidated financial statements.

As of May 31, ~~2021,~~2022, and February 28, ~~2021,~~2022, the Company had an accumulated deficit of ~~$140,910,961~~$44.9 million and ~~$132,340,979,~~$39.2 million, respectively. The accompanying condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern.

We have ~~very~~ limited financial resources. ~~We currently~~As of May 31, 2022, we have aworking capital of $13.8 million. Our monthly cash requirement is approximately $1.5 million. The monthly cash requirement decreased by approximately $0.4 million beginning May 1, 2022 as a result of ~~approximately $950,000.~~the proposed sale of NextTrip.

We will need to raise ~~substantial~~ additional capital or borrow loans to support the on-going ~~operation and increased~~operations, increase 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 cover~~including covering other operating costs until our planned revenue streams from all 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).~~ Our failure to obtain additional capital to finance our working capital needs on acceptable terms, or at all, ~~will~~would negatively impact our business, financial condition, and liquidity. ~~As of May 31, 2021, we had $28,199,038 of current liabilities.~~ We currently ~~do not~~ have ~~the~~limited 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.

~~Our current plan is to; (i) close the transactions contemplated by the Share Exchange Agreement entered into with HotPlay Enterprise Limited (“HotPlay” and the “HotPlay Exchange Agreement~~”), which has occurred to date, (ii) close the transactions contemplated by a Bill of Sale for the acquisition of 57.1% of Class A Common Stock of International Financial Enterprise Bank, Inc (“IFEB”), and (iii) to take steps to obtain control of the 51% ownership of Reinhart Interactive TV AG (“Reinhart”) acquired pursuant to the Founding Investment and Subscription Agreement entered into with Jan C. Reinhart. We currently operate in the travel and cryptocurrency industries. Upon the completion of the HotPlay Exchange Agreement which has occurred to date and the IFEB acquisition, and upon our receipt of control of the 51% interest in Reinhart, the Company plans to transition its operations to those of a travel, cryptocurrency/digital banking, and an in-game advertising company. During the period until the closing of the acquisition of IFEB, and the transfer of the ownership of the Reinhart shares, the Company intends to continue to actively operate in the travel and cryptocurrency industries as well as the gaming industry.

Management’s plans with regard to this going concern are as follows: the Company plans to 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 11. The Company is working aggressively to increase the viewership of its travel products by promoting it across other mediums which the Company hopes will result in higher revenues.~~

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.

As of May 31, 2022 and February 28, 2022, NextBank had short-term deposits of $0.3 million and $0.3 million, respectively, with an original maturity in November 2022, and an interest rate of 0.05% per annum.

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 types of lending services of NextBank. As of May 31, 2022 and February 28, 2022, the Company had loans receivable of $20.8 million and $17.4 million, respectively, and the allowance for loan losses of $0.1 million and $0.1 million, respectively. The interest rate ranges from 5.5% to 17.9%.

As of May 31, 2022, most of the loans were performing, and a general allowance was established at appropriate rate on the principal 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 such loans. As of May 31, 2022, the Company’s management deemed the reserve as sufficient when compared to the risk assessment.

As of May 31, 2022, there were loans placed on non-accrual loan of $0.04 million.

As of May 31, 2022 and February 28, 2022, the Company had unbilled receivables of $0.01 million and $0.01 million, respectively.

As of May 31, ~~2021~~2022 and February 28, ~~2021,~~2022, the Company had prepaid expenses of $0.9 million and $0.8 million, respectively. As of May 31, 2022 and February 28, 2022, the Company had other current assets of ~~$2,036,918 as compared to $1,864,279,~~$0.4 million and $0.03 million respectively. ~~The increase of $172,639 is driven by additional prepaid expenses of $124,419 and an increase of $48,220 of accrued interest receivable.~~

As of May 31, ~~2021~~2022 and February 28, ~~2021,~~2022, the Company had Convertible Notes Receivable, related party, net allowance for expected credit loss of $4.6 million relating to receivables from Axion. As of May 31, 2022 and February 28, 2022, the allowance for expected credit loss was $3.1 million.

As of May 31, 2022 and February 28, 2022, the Company had total goodwill of $27.9 million as allocated to units as follows:

As of May 31, 2022 and February 28, 2022, the Company had net ~~fixed assets~~computers, furniture and equipment of ~~$121,568~~$0.4 million and ~~$101,573,~~$0.4 million, of which $0.05 million and $0.1 million included depreciation expense, respectively. ~~The increase of $19,995 is primarily related to the addition of computer equipment.~~

The Company’s lease agreements are for office space used in its operation. The following schedule represents outstanding balance of operating lease Right-to-Use asset and operating lease liability of the Company as of May 31, and February 28, 2022, respectively:

As of May 31, ~~2021~~2022 and February 28, ~~2021,~~2022, the Company had accounts payable of $3.1 million and $1.9 million, respectively. As of May 31, 2022 and February 28, 2022, the Company had accrued expenses ~~$1,732,719~~of $3.9 million and $2.8 million, respectively.

As of May 31, 2022 and February 28, 2022, the Company had other current liabilities – customer demand deposits payable of $19.0 million and $7.5 million, respectively, relating to NextBank.

As of May 31, 2022, the Company had interest and non-interest- bearing deposits received from customers with interest rates ranging from 0% to 4% payable per annum.

As of May 31, 2022, and February 28, 2022, the Company had a short term note payable – related party of $0.7 million and $0.8 million, respectively, relating to Tree Roots Entertainment and Magnolia Quality Development Corporation Limited. The notes payable are unsecured, accrue interest at a rate of 9.00% - 9.75% per annum, and are due at call.

As of May 31, 2022 and February 28, 2022, the Company had a long term note payable – related party of $0 and $1.0 million, respectively, mainly related to note payable of preferred dividends in arrears which was repaid during the three-months ended May 31, 2022.

The note payable had an interest rate of 12% per annum, compounded monthly at the end of calendar month, with such interest payable at maturity or upon conversion.

On 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 acquiring 51% of the ownership of Reinhart, in consideration for 10,000,000 Swiss Francs (approximately $10.7 million US). On March 31, 2021, the Company paid the founder $10.7 million in cash and received the transfer of the shares on June 23, 2021. As of June 23, 2021, all the closing conditions had been satisfied and this transaction was completed.

As of May 31, 2022, the Company is in process of assessing the fair value of the identifiable assets acquired and liabilities assumed at the acquisition date, mainly in relation to ~~$1,793,239, respectively.~~its identification and valuation of intangible assets and certain tangible assets, therefore the assets acquired, and liabilities assumed were provisionally recorded. The ~~decrease~~assessment is to be completed within a period of ~~$60,520~~one year from the acquisition date, pursuant to the measurement period allowed under ASC 805. During the measurement period, the Company is ~~primarily driven~~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.

As of May 31, 2022, with regards to the strategic decision sale of Reinhart/Zappware in June 2022, assets and liabilities including goodwill of Zappware and Reinhart, were presented at its recoverable amount, included in assets and liabilities held for sale at the balance sheet date.

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, 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”), representing 57.16% 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.

On May 6, 2021, 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, pursuant to which the ~~final payment~~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.

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 1 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.

As of May 31, 2022, the Company is in 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 ~~owed~~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.

Parties are considered to be related to the Company if the Company has the ability, directly or indirectly, to control or joint control the party or exercise significant influence over the party in making financial and operating decisions, or vice versa.

Other than disclosed elsewhere, the Company had the following significant related party transactions for the three months ended May 31, 2022:

The Company had the following related party balances as of May 31, 2022 and February 28, 2022:

The comparative figure for the three months ended May 31, 2021 represents significant related party transactions of HotPlay Enterprise Ltd., as follows:

On March 24, 2021, HotPlay Thailand entered into a short-term loan with MQDC for $480,000 (15,000,000 Thai Baht) with an interest rate of 9% per annum, which is payable on demand and unsecured. Accrued interest on this loan was $6,619 as of May 31, 2022.

During June and July 2020, HotPlay Thailand entered into a short-term loan with TREG for the aggregate principal amount of $543,000 (17,000,000 Thai Baht) with an interest rate of 9.75% per annum, which is payable on demand and unsecured. Accrued interest on this loan was $4,780 as of May 31, 2022. On May 31, 2021, HotPlay Thailand repaid 7,000,000 Thai Baht (approximately $223,000 US) in connection with the ~~Longroot,~~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 Next Play Technologies. 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%. It is expected to be fully collected in Q3 FY2023 As of May 31, 2022, the outstanding balance was $705,000.

On August 19, 2021, the Company entered into Intellectual Property Purchase Agreements with Fighter Base Publishing Inc. ~~business acquisition~~(“Fighter Base”) and Inc. (“Token IQ”, and together with Fighter Base, the “IP Sellers”), dated as of ~~$450,000,~~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 ~~was partially offset~~entities are owned and controlled by ~~an increase~~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 Token IQ 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 ~~accrued interest payable related~~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.

On May 2, 2022, the Company completed such assets acquisitions from Fighter Base and Token IQ, and pursuant to the ~~Streeterville Capital, LLC~~terms of the respective IPP Agreements, the Company issued shares of its common stock as consideration for the purchase from Fighter Base and ~~HotPlay notes payable of $272,589 and an increase in accrued expenses of $126,708.~~

~~On October 10, 2018, we entered into a Promissory Note with Bettwork Industries Inc. (“Bettwork”), a related party,~~Token IQ in the amount of ~~$200,000 which was amended~~1,666,6667 and ~~superseded by an Amended Promissory Note dated October 19, 2018, in the amount of $230,000 (the “Bettwork Note”).~~1,250,000 shares, respectively. The ~~Bettwork Note bears interest~~Company recorded 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~~fair value of the ~~outstanding preferred~~common stock ~~shares held by the Chairman~~issued on May 2, 2022, at a closing price $0.415 per share, as intangible asset under development, as of the ~~Board of Directors of Bettwork (which provide for super-majority voting rights)~~recognition date 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 May 31, ~~2021 and February 28, 2021 is $190,000 and $190,000, respectively. An allowance for bad debt of $190,000 (i.e., 100%) was reserved against~~2022 the ~~Bettwork Note as of February 28, 2019 and remains unchanged as of May 31, 2021.~~balance amounted to $1,210,417.

~~On January 13, 2020, we entered into 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. 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. 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.

The outstanding principal balance of the Crystal Note as of May 31, 2021 and February 28, 2021 is $37,500 and $37,500, respectively. An allowance for bad debt of $37,500 (i.e., 100%) was reserved against the Crystal Falls Note as of February 28, 2021 and remains unchanged at May 31, 2021.

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.

~~Reinhart Interactive TV AG and Zappware N.V. Acquisition~~Letter of Intent to Acquire Axion Shares

On ~~January 15, 2021,~~October 28, 2020, the Company entered into a ~~Founding Investment and Subscription Agreement (the “Investment Agreement~~”non-binding Letter of Intent (as amended by the first amendment thereto dated March 10, 2021, the “Letter of Intent”) with ~~Reinhart Interactive TV AG, a company organized~~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 Company to date) on November 16, 2020, pursuant to the Axion Exchange Agreement (as defined in ~~Switzerland (“Reinhart”), and Jan C. Reinhart, the founder of Reinhart (“Founder~~”)Note 7, below).

~~The Investment Agreement contemplated~~Pursuant to the Letter of Intent, the Company ~~acquiring 51% of~~agreed, subject to certain condition precedents, including regulatory approvals and 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 connectionentry into material agreements with the ~~transaction. Additionally,~~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 ~~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 advanced the Founder $10,707,760 in cash in anticipation~~combination of ~~completing the transactions contemplated by the Investment Agreement as of March 31, 2021. 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~~stock 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.

cash. In connection with our entry into the ~~Investment Agreement,~~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 sellers 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 ~~a Founding Shareholders’ Agreement with the Founder (the “Shareholders’ Agreement”). The Shareholders’ Agreement set forth certain rules for the governance~~and/or which have not been completed, to date.

As of May 31, 2022, total payment of cash 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 appointedshares already paid by the Company ~~which include William Kerby,~~to the ~~Company’s Co-Chief Executive Officer, and Mark Vange,~~sellers was $937,117. The Company plans to make the ~~Company’s Chief Technology Officer; that any material shareholder matters are required to be approved by shareholders holding at least 66 2/3%~~final payment of 50% of the ~~total outstanding vote of Reinhart; that in the event Reinhart issues, within five years~~purchase price after the ~~closing date, any equity~~BCSC lifts a cease trade order on Axion’s shares, provided that the Company cannot estimate when, or ~~convertible equity,~~if, such cease trade order will be lifted. There is no further update as of May 31, 2022 and the recoverable amount was $937,117.

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 ~~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 rightexecution 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 ~~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~~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 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~~parties with respect to the ~~Company, at which time~~acquisition unless and until the ~~Company~~parties enter into a definitive agreement with respect thereto. Closing of the transaction 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~~regulatory approvals, amongst other things. The balance as of May 31, 2022 was in ~~connection with certain initial public offerings. As of June 23, 2021, all the closing conditions had been satisfied and this transaction has been completed.~~

~~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 of $6,400,000 was advanced to the Sellers on April 1, 2021 in anticipation of the completion of the transaction.amount $1,000,000.

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 within the quarter ending August 31, 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 July 23, 2021, previously by June 30, 2021, the Preferred Exchange Agreement can be terminated by either party with written notice to the other. As not all the closing conditions had been satisfied, for accounting purposes, this transaction is considered a subsequent event. We anticipate it will close within the 2^nd ~~quarter.~~

~~Verus International, Inc and NestBuilder.com Corp (OTCMKTS: VRUS)~~Soma Innovation Lab Joint Venture

WeOn 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 ~~recognized an impairment loss~~a term of two years. The Company also agreed to use Soma for certain work to be performed on ~~investment~~its websites and travel magazine and agreed to pay Soma $75,000 per month ($225,000 in ~~unconsolidated affiliate.~~aggregate) for such work, payable by way of the issuance of 90,000 shares of restricted common stock. As of May 31, ~~2021,~~2022, no development and ~~February 28, 2021, Monaker owned 3,845,101 and 3,845,101 shares of Verus International, Inc. (formerly known as RealBiz Media Group, Inc. (“Verus”)) Series A Preferred Stock, respectively. This interest was written down~~activity has been started. Soma is anticipated to ~~zero ($0) as of February 28, 2015.~~

~~On December 22, 2017, we entered into a Settlement Agreement~~continue the project 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 partNextTrip after completion of the ~~Settlement Agreement, Monaker agreed~~sale thereof 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”).~~

~~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 had 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 1 to 500 reverse stock split (not retroactively adjusted above). 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 common stock 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. For the three months ended May 31, 2021 and February 28, 2021, the Company had no investment in Verus common stock.

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 has a readily determinable fair value ~~as it is quoted on~~in the ~~OTC Pink~~ market under the symbol “BETW.”.

On ~~February 28, 2021,~~May 31, 2022, the 6,142,856 shares of Bettwork’s common stock held by the Company were trading at ~~$0.09~~$0.0003 per share, valued at ~~$55,286. On May 31, 2021, the 6,142,856 shares~~an aggregate of ~~Bettwork’s common stock held by the Company were trading at $0.015 per share valued at $92,143. The~~$1,843. Any change in fair value ~~of $36,857~~ is recognized ~~in net loss~~ as other expense in statement of income ~~valuation loss, net for the three months ended~~as of May 31, ~~2021.~~2022.

On August 31, 2016, ~~Monaker~~the Company entered into a Marketing and Stock Exchange Agreement with Recruiter.com (“~~Recruiter~~”Recruiter”). The ~~Agreement~~agreement required ~~Monaker~~the Company to issue to Recruiter 75,000 shares of ~~Monaker~~the Company’s common stock in exchange for 2,200 shares of Recruiter common stock. ~~Also, Monaker~~The Company issued to Recruiter an additional 75,000 shares of ~~Monaker~~Company 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.

During the ~~quarter~~year ended ~~May 31, 2021,~~February 28, 2022, the Company sold in open market transactions 68,083 shares of ~~Recruiter~~Recruiter.com common stock. The sale of these shares resulted in a realized gain of $28,028 for the ~~three months~~year ended ~~May 31, 2021.~~February 28, 2022.

~~On February 28, 2021, the~~The Company owned ~~78,137 shares of Recruiter’s common stock compared to 10,054~~3,461 shares of Recruiter’s common stock as of May 31, ~~2021.~~2022. As of May 31, ~~2021,~~2022, each share of ~~Recruiter.com’s~~Recruiter’s common stock was valued at ~~$4.20~~$1.21 per share, which changed the fair value of the ~~10,054~~3,461 shares of ~~Recruiter.com~~Recruiter common stock to ~~$42,227.~~ $4,188.

The net change in the fair value ~~of $10,156~~ is recognized ~~in net income~~ as other expense in statement of income as of May 31, ~~2021.~~2022.

The investment in affiliate at cost of $4,856,825 ~~as of February 28, 2021,~~ represents the Company’s acquisition of ~~33.8%~~approximately 33.85% of Axion ~~Ventures, Inc. (“Axion”),~~ on November 16, 2020. Pursuant to ~~a Share~~the Axion Exchange Agreement ~~(the “Axion Exchange Agreement”) entered into with certain stockholders of Axion,~~(as defined in Note 7, below), which closed on November 16, 2020, the Axion ~~stockholders,~~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~~converted into 7,417,700 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.~~on June 30, 2021. As of May 31, ~~2021,~~2022, the ~~value~~outstanding amount of this investment ~~decreased by $2,869,942 from $4,856,825 to $1,986,883, due to the change in the market price of Axion shares.~~

~~Also pursuant to the Axion Exchange Agreement, which closed on November 16, 2020, certain creditors of Axion (the “Axion Creditors~~”) exchanged debt owed to them by 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 closing of the HotPlay Share Exchange, on a one-for-one basis. Asas of May 31, ~~2021,~~2022 was $4,415; there was no change in market price during the ~~values associated with the assumed debt has remained unchanged.~~three-month period ended May 31, 2022.

Also pursuant to the Axion Exchange Agreement, which closed on November 16, 2020, the Company granted a warrant to Cern One Limited (one of the Axion ~~stockholders)~~Stockholders), to purchase 1,914,250 shares of the Company’s common ~~stock.~~stock, with an exercise price of $2.00 per share. The warrants vest on ~~the later of (a) the date 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 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. AsBecause 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 May 31, 2022, these warrants are no longer outstanding.

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, ~~there has been no activity related~~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 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 amount of $7,657,024 (the “Axion Debt”), for (i) 3,828,500 shares of Series C Convertible Preferred Stock of the Company (the “Series C Preferred Stock”); and (ii) a warrant, ~~and~~granted to Cern One, to purchase 1,914,250 shares of the ~~warrant has not vested.~~

On Although the Axion Share Exchange closed on November 16, 2020, the Company ~~acquired 100% of Longroot, Inc. (“Longroot”), which in turn owned 57% of Longroot Limited, a Cayman Islands company (“Longroot Cayman”). Longroot Cayman owns 49%~~has yet to formally complete the transfer of the ~~outstanding ordinary shares (with 51%~~ownership of the ~~Preferred~~Axion shares ~~owned~~into its name, due to a Cease Trade Order issued 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.~~the BCSC, which impacts Axion.

The ~~acquisition was made pursuant to a November 2, 2020~~closing of the HotPlay Exchange Agreement on June 30, 2021 triggered the automatic conversion of the Company’s outstanding Series B Convertible Preferred Stock ~~Purchase Agreement (“SPA”) entered~~and Series C Convertible Preferred Stock into ~~with Dr. Jason Morton, and for certain limited purposes set forth therein, Longroot. Pursuant to~~common stock of the ~~SPA,~~Company. Specifically, effective June 30, 2021, the ~~Company purchased, 100% of Longroot, in consideration for (a) $1,650,000 in cash; and (b) 200,000~~10,000,000 shares of ~~restricted common stock at $2.14 per share for a total value of $428,000 as well as 150,000~~outstanding Series B Convertible Preferred Stock and 3,828,500 shares of ~~restricted common stock at $3.00 per share for a total value of $450,000.~~

~~Up to~~outstanding Series C Convertible Preferred Stock automatically converted into 7,417,700 and included in the closing, as part of the cash consideration paid, the Company paid $1,200,000 to Longroot which was used for working 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 Dr. Morton pursuant to the terms of the SPA was payable in three installments of $300,000 each, due on or prior to (i) December 16, 2020 (30 days after the closing); March 16, 2021 (120 days after the closing); and (iii) April 15, 2021 (150 days after the closing). 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 in3,828,500 shares of common stock of the Company, respectively, in accordance with the terms of ~~which the Company issued 150,000 shares at~~such preferred stock ~~price 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%(the “Preferred Conversion”).

~~Pursuant to the SPA, Morton agreed not to compete for~~The Creditor Warrants had cashless exercise rights, an exercise price of $2.00 per share and, a ~~period~~term of two years, ~~following~~beginning on the ~~closing date, in connection with~~Vesting Date (defined below). The Creditor Warrants were scheduled to vest on the operation of an initial coin offering portal in Thailand, subject to customary exceptions. The SPA also contains an indemnification obligation whereby the Company agreed to indemnify 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.earlier of:

Because 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 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 purchase of Longroot, Inc.~~vesting conditions had not been satisfied as of November 16, ~~2020: total consideration~~2021, the warrants terminated automatically on such date pursuant to ~~selling shareholder~~their terms. Accordingly, as of ~~$2,528,000 (and $2,250,636, net~~May 31, 2022, these warrants are no longer outstanding.

On August 20, 2021, our counsel sent a demand letter for payment to Axion Ventures Inc., but the Company has not received a response in related to the demand letter.

On September 1, 2021, the Company filed a claim in the Supreme Court of ~~cash acquired)~~British Columbia demanding payment of $7,657,024.

In November 2021, the Company commenced a new claim for the debt claimed to reflect the difference between what was owed and what the ~~purchase price has been provisionally allocated as follows. The fair value of net assets acquired were $219,940~~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 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 butdetermined that it will be ~~tested for impairment annually in alignment~~further resolved together with ~~the Company’s~~ other intangible asset impairment analysis. The business combination accounting is provisionally complete for all assets and liabilities acquired on the acquisition date and we will continue to evaluate the asset values within the 1-year timeframe as providedAxion issues in the ~~guidance.~~

next trial. The summary trial judge has advised that he wishes to take case management over this and several related proceedings. It is anticipated that the trial of this action would be reset for 12 weeks sometime in 2023 or early 2024, a new trial date has not been determined. 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.

~~Table~~As of ~~Contents~~May 31, 2022, the recoverable amount of Axion receivables net allowance for credit loss were $4.6 million.

The following table sets forth the intangible assets, both acquired and developed, including accumulated amortization as of May 31, ~~2021:~~2022:

During the quarter ended May 31, 2021, the Company purchased a total of $2,200,000 of the intellectual property including the development of electronic games under a master development and license with HotPlay Enterprise Limited (Thailand). The cost of purchases was recorded as Capital in Progress (CIP).

Intangible assets are amortized on a straight-line basis over their expected useful lives, which is estimated to be 31-20 years. The expected useful lives are determined as to reflect the expected pattern of consumption of the future economic benefits embedded in the assets.

Amortization expense related to website development costs and intangible assets, excluding amortization of debt issuance costs, was ~~$160,618~~$0.1 million and ~~$79,059~~$0.5 million for the ~~quarters~~three-month periods ended May 31, ~~2021~~2022 and ~~May 31, 2020,~~2021, respectively.

Based on the carrying value of definite-lived intangible assets as of May 31, ~~2021,~~2022, we estimate our amortization expense for the next five years will be as follows:

~~Note 8~~CIP – ~~Line of Credit~~Software under development acquired from Go Game

On ~~May 7, 2020,~~June 30, 2021, the Company entered into a ~~Promissory Note~~Securities Purchase Agreement (the “Go Game SPA”) with ~~National Bank~~David Ng, an individual (the “~~Note~~”“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 ~~Note replaced a prior promissory note~~Go Game SPA also includes an option whereby the Company ~~had~~can acquire additional shares of Go Game, as described in ~~place~~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 ~~National Bank~~$1.25 million paid on June 30, 2021, $1.25 million payable on or before July 31, 2021, and ~~extended~~$2.5 million payable on or before September 30, 2021.

Pursuant to the ~~due~~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 ~~prior note~~Go Game SPA. The Go Game Option is exercisable from ~~June 30, 2020~~time to ~~December 31, 2020. The Note also amended~~time after the ~~interest rate~~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 ~~note~~ to ~~provide~~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 ~~amounts due~~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 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 (including shares of common stock issuable upon conversion shares of Series D Preferred Stock held by Seller).

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 (but only to the extent such liabilities arise solely from activities or events that occur after the closing date) related to the goPlay platform (the “Go Game Assets”), together with a perpetual license to the goPay payment gateway (the “goPay License”).

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

No stock consideration of Go Game or the Company is being exchanged, as was previously contemplated under the ~~Note accrue~~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 (as defined below), 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 potential customers to the Company, in exchange for a right to receive fifty percent (50%) of net revenues attributable to such 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 ~~rate of prime plus 3% (which rate was 6.25%)(the interest rate~~time of the ~~prior note was prime plus 1%), subject~~closing and for a period of time thereafter in order to ~~a floor of 4.5%. The Note may be prepaid at any time without penalty. The Note contains standard~~protect the Company’s legitimate business interests and ~~customary events of default. On December 1, 2020,~~goodwill in connection with the ~~Company repaid the Note in full according to its terms.~~Asset Purchase Agreement.

AsThe 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. The acquired asset had a balance, as of May 31, 2022, in the amount $5,000,000 presented as intangible asset under development as it needed further development to align with its business use and purpose. The consideration paid as of May 21, 2022 amounted to $2,950,000.

On August 19, 2021, the ~~principal balance~~Company entered into the IPP Agreements with Fighter Base and Token IQ Inc., dated as of the ~~note payable was $0. Interest expense charged~~same date. Pursuant to ~~operations relating~~the IPP Agreements, the Company agreed to ~~this line~~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 ~~credit was $0~~which entities are owned and ~~$74,858, respectively~~controlled by Mark Vange, the Chief Technology Officer of the Company.

On May 2, 2022, the Company completed such assets acquisition from Fighter Base and Token IQ, and pursuant to the terms of the respective IPP Agreements, the Company issued shares of its common stock as consideration for the ~~quarters ended~~purchase from Fighter Base and Token IQ in the amount of 1,666,6667 and 1,250,000 shares, respectively. The Company recorded at fair value of the common stock issued on May 2, 2022, at a closing price $0.415 per share. As of the recognition date and as of May 31, ~~2021~~2022, the total balance amounted to $1,210,417, presented as intangible asset under development as it needed further development to align with its business use and ~~May 31, 2020.~~purpose.

On November 23, 2020, the Company entered into a Note Purchase Agreement (the “~~November~~“November 2020 Note Purchase ~~Agreement~~”Agreement”) with Streeterville Capital, LLC (“~~Streeterville~~”Streeterville”), pursuant to which the Company sold Streeterville a Secured Promissory Note in the original principal amount of $5,520,000 (the “~~November~~“November 2020 Streeterville ~~Note~~”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~~“November 2020 Investor ~~Note~~”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, ~~giving~~resulting in net proceeds to the Company of $3,255,000.

The November 2020 Streeterville Note ~~bears~~bore interest at a rate of 10% per annum and ~~matures~~was scheduled to mature 12 months after the date of the note (i.e., on November 23, 2021). From time to time, beginning ~~six~~6 months after issuance, Streeterville ~~may~~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 ~~has~~had not been funded and $1.25 million if the November 2020 Investor Note ~~has~~had been funded. In the event we dodid not pay the amount of any requested redemption within three trading days, an amount equal to 25% of such redemption amount iswas to be added to the outstanding balance of the November 2020 Streeterville Note. Under certain circumstances the Company ~~may~~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 ~~is increased~~would increase by 2%. Subject to the terms and conditions set forth in the November 2020 Streeterville Note, the Company ~~may~~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 ~~remains~~remained outstanding, the Company ~~has~~ agreed to pay to Streeterville 20% of the gross proceeds that the Company ~~receives~~received from the sale of any of its common stock or preferred stock, which payments ~~will~~were to be applied towards, and ~~will~~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 November 2020 Streeterville Note (each an “~~Equity Payment~~”“Equity Payment”). Each time that we ~~fail~~failed to pay an Equity Payment, the outstanding balance of the November 2020 Streeterville Note would automatically ~~increases~~increase by 10%. Additionally, in the event we were to fail to timely pay any such Equity Payment, Streeterville ~~may~~had the right to seek an injunction which would prevent us from issuing common or preferred stock until or unless we ~~pay~~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) ~~increases~~would increase by an amount equal to 25% of the then-current outstanding balance thereof (the “~~April~~“April 2021 Note ~~Increase~~”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 certain Share Exchange Agreement entered into with HotPlay and the HotPlay stockholders dated July 23, 2020, as amended from time 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”). The Company has completed the acquisition of HotPlay, effective as of June 30, 2021, and as such, the November 2020 Note Transaction Conditions have been satisfied.~~

Pursuant to the November 2020 Streeterville Note, we provided Streeterville a right of first refusal to purchase any promissory note, debenture or other debt instrument which we ~~propose~~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 ~~provide~~provided Streeterville such right, and Streeterville ~~does~~did not exercise such right to provide such funding, the outstanding balance of the November 2020 Streeterville Note ~~increases~~would increase by 3%. Each time, if ever, that we ~~fail~~failed to comply with the terms of the right of first refusal, the outstanding balance of the November 2020 Streeterville Note ~~increases~~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 ~~increases~~increase by 15%, and for each other default, the outstanding balance of the November 2020 Streeterville Note would automatically ~~increases~~increase by 5%, provided such increase ~~can~~could only occur three times each as to major defaults and minor defaults, and that such aggregate increase ~~cannot~~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 ~~has~~ entered into a Security Agreement with Streeterville (the “~~Security Agreement~~”“Security Agreement”), pursuant to which the obligations of the Company ~~are~~were secured by substantially all the assets of the Company, subject to a priority lien and security interest in the collateral of the Company.

The November 2020 Investor Note, in the principal amount of $1,500,000, ~~evidences~~evidenced the amount payable by Streeterville to the Company as partial consideration for the acquisition by the Company of the November 2020 Streeterville Note. The November 2020 Investor Note ~~accrues~~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 ~~may~~could 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 November 2020 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 November 2020 Note Purchase Agreement, or (iii) if the Company sells, transfers, assigns, pledges or hypothecates the November 2020 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 November 2020 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 November 2020 Investor Note). The November 2020 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 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.

On ~~May 8, 2020,~~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 ~~obtained~~sold Streeterville a ~~$176,534 loan~~Secured Promissory Note in the original principal amount of $9,370,000 (the “~~Loan~~”“March 2021 Streeterville Note”) ~~from The Commercial Bank (the “Lender”), pursuant to~~. Streeterville paid consideration of (a) $7,000,000 in cash; and (b) issued the ~~Paycheck Protection Program (the “PPP”) under the “CARES Act”. The Loan is evidenced by~~Company a promissory note in the amount of $1,500,000 (the “~~PPP Note~~”“March 2021 Investor Note”), ~~dated effective May 8, 2020, issued~~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 ~~the Company to the Lender. The Note is unsecured with a 2-year term, matures~~Streeterville, which occurred on May ~~8, 2022, and~~26, 2021.

The March 2021 Streeterville Note bears interest at a rate of ~~1.00%~~10% per annum ~~payable monthly commencing~~and matures 12 months after its issuance date (i.e., on ~~November 8, 2020, following~~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 ~~initial~~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 ~~period as specified under~~ the ~~PPP. The PPP~~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 ~~be prepaid~~prepay all or any portion of the outstanding balance of the March 2021 Streeterville Note at any time ~~prior~~subject to ~~maturity with no~~a prepayment ~~penalties. Proceeds~~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 ~~Loan were available~~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 ~~fund designated expenses, including certain payroll costs, rent, utilities~~HotPlay must have either been forgiven by HotPlay or converted into the Company’s common stock; and ~~other permitted expenses, in accordance with~~(d) HotPlay must have become a co-borrower on the ~~PPP. Under~~March 2021 Streeterville Note (collectively, 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)“March 2021 Note Transaction Conditions”).

~~On August 14, 2020,~~The March 2021 Note Purchase Agreement required that we complete 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.

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 termspurchase of the ~~HotPlay Exchange Agreement. The advances were evidenced by convertible promissory notes (“HotPlay Convertible Notes~~”Reinhart (the “Reinhart Interest”) ~~in the amount of each advance, and an effective date as~~, within 10 days of the date of ~~each advance. The HotPlay Convertible Notes totaled $3.0 million as~~the sale of ~~February 28, 2021.~~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.

OnAlso on May 26, 2021, Streeterville funded the 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, inInvestor Note (in the amount of ~~$9,000,000, $1,000,000, and $2,000,000, respectively. With~~$1.5 million) in full.

We made a required Equity Payment of $1,857,250 to Streeterville under the ~~April 15,~~March 2021 ~~loan, HotPlay has loaned the Company all $15 million~~Streeterville Note on May 26, 2021, with funds raised through a May 2021 underwritten offering, which represented approximately 20% of the funds ~~required~~raised in such offering.

We failed to ~~be funded pursuant~~timely meet the November 2020 Note Transaction Conditions; however, on June 1, 2021, Streeterville agreed to ~~the terms~~defer 50% of the ~~HotPlay Exchange Agreement.~~

~~The advances, and the entry into the HotPlay Convertible Notes, were required conditions~~April 2021 Note Increase which was otherwise to the HotPlay Exchange Agreement, pursuant to which HotPlay 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 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 and with the loan of the full $15 million, it is not expected that HotPlay will loan the Company any additional funds).

~~The HotPlay Notes were automatically forgiven by HotPlay as intracompany loans upon the closing of the HotPlay Exchange Agreement which occurred on June 30, 2021.~~

On March 17, 2021, the Company entered into a master development and license agreement with HotPlay 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 work for a total investment of approximately $2,000,000.

~~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 will be 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.

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~~occur due to the ~~Directors serving~~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 ~~March 1,~~April 30, 2021, ~~for~~and the ~~fiscal year ending February 28, 2022, were agreed to~~remaining $506,085 of the April 2021 Note Increase would only 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~~added to the ~~non- executive directors on April 8,~~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 ~~for compensation for fiscal 2022 (such shares,~~Note Transaction Conditions by June 30, 2021, the “~~Fiscal 2022 Board Compensation Shares”).~~March 2021 Streeterville Note would be subject to the June 2021 Note Increase. The ~~Fiscal 2022 Board Compensation Shares~~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 ~~issued under the Company’s Amended and Restated 2017 Equity Incentive Plan (the “Plan”).~~satisfied.

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 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 exercised his right to receive the entire bonus in shares of common stock, he would be due 132,450 shares of common stock. 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.

The Company declared dividends in arrears of $1,102,068 on previously outstanding Series A Preferred Stock, that were converted into common stock with the Series A Preferred Stock being returned. 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, William Kerby, our CEO and a director, and Warren Kettlewell, a former Board Member.

~~On April 8,~~June 22, 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”),~~Streeterville, pursuant to which Streeterville exchanged $600,000 of ~~which Donald P. Monaco is the managing general partner and the Chairman~~a June 2021 requested redemption 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”).~~

On July 21, 2021, the ~~closing date of the HotPlay~~Company entered into an Exchange Agreement ~~and prior to the payment in full of such Convertible Promissory Notes by the Company, at~~with Streeterville, whereby Streeterville exchanged $400,000 owed under a ~~conversion price equal to the greater of (i) the closing consolidated bid price~~November 2020 promissory note (which amount was partitioned into a separate promissory note) for 200,000 shares of the Company’s common ~~stock on April 8,~~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 ~~$3.02); and (ii) the five-day volume weighted average price~~partitioned into a separate promissory note) for 135,000 shares of the Company’s common stock for the five trading days following the date that the HotPlay Exchange Agreement 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.stock.

On October ~~29, 2019,~~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 ~~Notes with Robert “Jamie” Mendola, Jr. (a Director~~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 ~~Company) and Pasquale “Pat” LaVecchia (a Director~~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 ~~Company)~~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 ~~amounts~~October 2021 Streeterville Note, the Company may prepay all or any portion of ~~$150,000~~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 ~~$25,000, respectively (the “Director Notes~~”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 ~~Director~~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 “2020-2021 Streeterville Notes”). If HotPlay has not become a co-borrower on the 2020-2021 Streeterville Notes ~~have~~by the Deadline, the outstanding balance on the October 2021 Streeterville Note automatically increases by an ~~interest rate~~amount equal to 25% of ~~12% per annum (18%~~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 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 were originally due and payable~~default (and upon written notice from Streeterville), interest on ~~February 1, 2020, but were subsequently extended as discussed below, provided~~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.

On November 3, 2021, the Company closed a registered direct offering of its securities, resulting in gross proceeds to the Company of approximately $30 million. This offering triggered the provisions of the 2020-2021 Streeterville Notes requiring the Company to pay to Streeterville 20% of the gross proceeds that the ~~notes may be prepaid at~~Company receives from the sale of any ~~time without penalty (provided that all interest that would have been due had the notes remained outstanding through maturity~~of its common stock or preferred stock within ten days of receiving such amount, which payments must be ~~paid at~~applied towards and reduce the ~~time~~outstanding balance of ~~repayment). The Company paid a 2% original issue discount in connection~~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 ~~notes. The Director Notes were repaid~~lender and waived for the October 2021 Streeterville Note in ~~full in April and May 2020.~~November 2021.

On ~~December 9, 2019,~~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.

On March 23, 2022, the Company completely paid off the March 2021 Streeterville Note, outstanding balance in the amount of $3,002,142.

On April 29, 2022, the Company entered into ~~an Amended and Restated Promissory~~the Standstill Agreement with Streeterville, pursuant to which, Streeterville agreed not to seek to redeem any portion of the October 2021 Streeterville Note ~~with~~(in the ~~Monaco Trust, in the~~original principal 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~~$1,665,000) until September 18, 2022. As consideration for such agreement, the ~~Company in favor~~outstanding balance of the ~~Monaco Trust on February 4, 2019~~October 2021 Note was increased by $87,639.33 (the ~~2019 Monaco Trust~~“Standstill Fee”); as a result, the outstanding balance of the October 2021 Note ~~discussed above), in the amount of up to $700,000, which had a balance~~ as of ~~December 9, 2019 of $700,000.~~ April 29, 2022 was $1,840,912.84 (including outstanding interest).

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,May 5, 2022, the Company entered into ~~first amendments~~a Note Purchase Agreement (the “May 2022 Note Purchase Agreement”) with Streeterville, pursuant to which the Company sold Streeterville a Secured Promissory Note in the original principal amount of $2,765,000 (the “May 2022 Streeterville Note”). 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 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 Streeterville 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 ~~Director Notes~~outstanding balance of the May 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 May 2022 Streeterville Note is increased by 2%.

Subject to the terms and ~~Revolving Monaco Trust~~conditions set forth in the May 2022 Streeterville Note, the Company may prepay all or any portion of the outstanding balance of the May 2022 Streeterville Note on or before the date that is 6 months from the Effective Date subject to a prepayment penalty equal to 5% of the amount of the outstanding balance, and after 6 months from the Effective Date will be subject to 10%. For so long as the May 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 May 2022 Streeterville Note. Each time that the Company fails to pay an Equity Payment, the outstanding balance of the May 2022 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.

Additionally, upon each major default described in the May 2022 Streeterville Note (including, without limitation, the failure to pay amounts under the May 2022 Streeterville Note when due or to observe any covenant under the May 2022 Note Purchase Agreement (other than the requirement to make Equity Payments)), the outstanding balance of the May 2022 Streeterville Note may be increased, at Streeterville’s option, by 15%, and for each other default, the outstanding balance of the May 2022 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 May 2022 Streeterville Note immediately prior to the first event of default.

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. Pursuant to 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.

The May 2022 Note 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 Note Purchase Agreement.

In connection with the ~~directors~~May 2022 Note Purchase Agreement and the ~~Monaco Trust, respectively, to extend the maturity date of such notes from February 1, 2020 to April 1, 2020 (the “~~May 2022 Streeterville Note, ~~Amendments”). No other changes were made to such notes as a result of such amendments.~~

~~On January 29, 2020,~~ the Company entered into ~~first amendments~~a Security Agreement with Streeterville, pursuant to which the ~~Director Notes and Revolving Monaco Trust Note with~~obligations of the ~~directors and~~Company are secured by substantially all of the ~~Monaco Trust, respectively, to extend~~assets of 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.~~Company.

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,~~June 2, 2022, the Company entered into ~~second amendments~~a Global Amendment to satisfy the requirement that HotPlay become a co-borrower on the October 2021 Streeterville Note and the May 2022 Streeterville Note and jointly and severally assume all of the obligations and duties of the Company under those notes. As a result, all references to “Borrower” or the “Company” in such notes now jointly refer to HotPlay and NextPlay. Streeterville also agreed to waive its right to enforce an increase in the balance of the October 2021 Streeterville Note due to the ~~Director Notes~~Company’s failure to ~~extend~~add HotPlay as a co-borrower on the ~~maturity date~~October 2021 Streeterville Note within the prescribed period of ~~such Director Notes from April 1, 2020~~time 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~~do so. The Global Amendment does not alter any other 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 $1,225).~~

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. This action is described in greater detail under “~~Note 12 - Commitments and Contingencies”, under the heading “Legal Matters~~”.

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).~~notes.

~~Table~~As of ~~Contents~~May 31, 2022, the remaining balances of the outstanding Streeterville notes were as follows:

Effective November 1, 2021, a subsidiary of the Company 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 ~~tasked with reviewing~~guaranteed by notes receivable. The facility carries a blended interest of 14.05% per annum and ~~approving any issues relating to conflicts of interests and all related party transactions~~is repayable upon the collection 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 fornotes that guarantees it, or the Company ~~(including fairness from a financial point~~decision to repay it in full, whichever comes first, with interest only monthly payments requirement. As of ~~view); (2)~~May 31, 2022, the ~~materiality~~loans had outstanding balance 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.$0.682 million.

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 Committee.

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~~”“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.

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~~“Series A Preferred ~~Stock~~”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 $0 and $1,102,068 as of May 31, ~~2021~~2022 and February 28, ~~2021,~~2022, respectively. These dividends ~~will only be payable when and if declared by the Board of Directors. On~~were paid in April ~~7, 2021, the Board approved the dividends to be paid.~~2022.

The Company had 0 shares of Series A Preferred Stock issued and outstanding as of May 31, ~~2021~~2022 and February 28, ~~2021.~~2022.

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 5~~“Note 6 – Investment in Unconsolidated ~~Affiliates~~”Affiliates”). Each share of Series B Preferred Stock automatically, and without any required action by any holder, ~~converts~~converted 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. The~~on June 30, 2021.

As of May 31, 2022 and February 28, 2022, the Company had ~~10,000,000~~0 shares of Series B Preferred Stock ~~outstanding as of May 31, 2021~~issued and ~~February 28, 2021.~~

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. The~~on June 30, 2021.

As of May 31, 2022 and February 28, 2022, the Company had ~~3,828,500~~0 shares of Series C Preferred Stock issued and outstanding.

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 0 shares of Series D Preferred Stock outstanding as of May 31, ~~2021~~2022 and February 28, ~~2021, respectively.~~2022.

During the ~~quarters~~three-months ended May 31, ~~2021 and May 31, 2020, there were no repurchases of the Company’s common stock by Monaker.~~

~~During the quarter ended May 31, 2021,~~2022, the following shares of common stock were issued:

The Company issued the initial payment of $500,000 to IDS as per the settlement agreement during the three months ended May 31, 2021 in consideration for the first transfer of 344,400 shares to be repurchased. As of the filing date, the transfer of shares has not yet been completed.

The Company had ~~23,454,203~~111,736,081 and ~~18,765,839~~108,360,020 shares of common stock issued and outstanding at May 31, ~~2021~~2022 and February 28, ~~2021,~~2022, respectively.

On March 14, 2022, HotPlay (Thailand) Co., Ltd. (“HPT”) received a promotional privileges approval from the Board of Investment, which permitted majority foreign ownership, and on April 26, 2022, HotPlay Enterprise Ltd. (“HPE”) completed the transfer of shares from existing Thai shareholders without paying consideration in accordance with the HotPlay Exchange Agreement and ultimately owns 100% interest in HPT. Upon the change in ownership interest in its subsidiary, the Company has recognized deficit from changing ownership interest in subsidiaries amounting to $1.6 million in its Consolidated Statements of Stockholders’ Equity, presented as deduction in additional paid-in capital. Subsequently, on May 26, 2022, HPT received foreign business license to operate the reserved business in Thailand.

The following table sets forth common stock purchase warrants outstanding as of May 31, ~~2021,~~2022, and February 28, ~~2021,~~2022, and changes in such warrants outstanding for the quarter ending May 31, ~~2021:~~2022:

~~At February~~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 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”).

On April 22, 2022, the Company held its 2022 Annual Meeting of Stockholders (the “Annual Meeting”) in a virtual format, at which Annual Meeting the Warrant Amendment was again presented to the Company’s stockholders for approval, amongst other things. Stockholders did not approve the Warrant Amendment at the Annual Meeting.

The Company intends to continue to comply with the requirements related to stockholder approval of the Warrant Amendment, as set forth in the relevant transaction documents.

On May 31, 2022, there were warrants outstanding to purchase ~~3,045,921~~an aggregate of 14,811,679 shares of common stock with a weighted average exercise price of ~~$2.50~~$2.05 and weighted average remaining life of ~~1.18 years.~~0.64 year.

~~At May 31, 2021, there were warrants outstanding to purchase 2,982,421 shares of common stock with a weighted average exercise price of $2.45 and weighted average remaining life of 1.00 years.~~

~~During the quarter ended May 31,~~As discussed above, on November 1, 2021, the Company ~~granted:~~

● ~~warrants~~issued Warrants to purchase ~~161,900~~an aggregate of 14,240,508 shares of Company common stock in connection with ~~subscriptions~~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.~~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.

As of May 31, 2022, none of the Warrants have been exercised by the holders thereof.

The Company entered into ~~a new~~an 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, 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. ~~Monthly rental costs, including building maintenance assessment, for fiscal years 2022, 2023, 2024, 2025, 2026, 2027~~Additionally, the Group rents office space located in Puerto Rico and ~~2028 are estimated~~Thailand 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.

The rent for the quarters ended May 31, 2021 and May 31, 2020 was $18,671 and $35,833, respectively. The Company recorded operating lease Right-to-Use asset of $1,257,820 along with current operating lease liability of $1,257,820 as of May 31, 2021.

The following schedule represents obligations and commitments on the part of the ~~Company that are not included in liabilities:~~Company:

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 not~~could 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.

On August 15, 2019, the Company entered into an Intellectual Property Purchase Agreement with IDS Inc. (“~~IDS~~”IDS” and the “IP“IP Purchase ~~Agreement~~”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~~”“IP Assets”). In consideration for the purchase, the Company issued IDS 1,968,000 restricted shares of ~~restricted~~Company common stock (the “~~IDS Shares~~”“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~~”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~~”“Injunction Motion”). Defendants IDS, TD Assets, and Ari Daniels filed an answer, affirmative defenses, and counterclaims (the “~~Answer~~“Answer and ~~Counterclaim~~”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~~Co-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“IP Purchase ~~Amendment~~”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~~”“Payment”), payable by way of an initial payment of $500,000, and twelve monthly payments of approximately $195,833 (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. 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.

Pursuant to the IP Purchase Amendment, on May 19, 2021, the Company made the initial payment of $500,000. ~~After the quarter end, the necessary documentation to affect the transfer of~~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:

As of May 31, 2022, IDS still has not provided any of the necessary documents in order make the stock transfers. The entire IDS Settlement, agreements, and amendment are part of the proposed sale of NextTrip, whereby upon closing of the proposed transaction, the IDS settlement will no longer be a responsibility of the Company; provided, however, that, if the Company fails to make certain required installment payments to NextTrip within five (5) business days of being due, such IDS payment obligations will revert back to the ~~Company was received~~Company.

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 ~~Chief~~Co-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 ~~Longroot~~Next Fintech which are the subject of Axion’s claims were legitimate and pleading various other defenses. The Company, Mr. Kerby and ~~Longroot~~Next Fintech dispute Axion’s claims and continue 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, It is anticipated that the trial of this action would be reset for 12 weeks sometime in 2023 or early 2024, a new trial date has not been determined. Document and oral discovery are ongoing, which will be necessary for the parties to make full disclosure on all issues.

As of May 31, 2022, there has been no significant update in the court proceedings.

Accounting Standards Codification 280-10 “~~Segment Reporting~~”,“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.

As of May 31, 2022, the Company has ~~two~~2 operating segments consisting of (i) ~~NextTrip and Maupintour~~the NextMedia Division, which ~~have various products and services related to its technology solutions platforms related to travel marketplaces,~~consists of HotPlay, and (ii) the NextFinTech Division, which consists of 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.NextBank. The Company’s chief operating decision ~~maker is~~makers are considered to be the ~~Chief~~Co-Chief Executive ~~Officer.~~Officers. The chief operating decision ~~maker allocates~~makers allocate resources and assesses performance of the business and other activities at the single operating segment level. At the reporting date, only NextFinTech generated revenue from operation.

As described in Note 14 for the strategic sales of NextTrip and Reinhart/Zappware units, the business of NextTrip represented the entirety of the NextTrip operating segment and Reinhart Digital TV was a part of NextMedia operating segment prior to being classified as held for sale. As of May 31, 2022, they were classified as held for sale and therefore no longer presented in segment reporting.

There were no reconciling or inter-company items between ~~segments.~~segments during the three-month period ended May 31, 2022.

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).

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.

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.

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.

~~Soma Innovation Lab Joint Venture~~Sales plan - Reinhart Digital TV (Zappware) and NextTrip to TGS Esports, Inc

On ~~March 8, 2021,~~June 28, 2022, the Company entered into a ~~Joint Venture Agreement with Soma Innovation Lab (“Soma”). Pursuant to the agreement, the parties agreed to form~~series of agreements, including 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 ShareSecurities Exchange Agreement, with ~~HotPlay~~William Kerby, the Company’s co-Chief Executive Officer and director, Donald P. Monaco, a director of the Company, and British Columbia-based TGS E-Sports Inc. (TSX-V: TGS, OTC: TGSEF), a public company whose securities are listed for trading on the Canadian TSX Venture Exchange, pursuant to which the Company has agreed to sell the Company’s travel business, NextTrip Group, LLC, and its ~~stockholders, which technology~~51% ownership of Reinhart Digital TV (the 100% owner of Zappware) to TGS in exchange for securities of TGS , as discussed in further detail below. TGS is ~~owned by HotPlay,~~a leading esports tournament solutions provider.

Prior to the execution of the securities exchange agreement, NextTrip issued an aggregate of 915,000 units in NextTrip to Messrs. Kerby and ~~that we would issue~~Monaco to resolve certain management unit issuances provided for in NextTrip’s Operating Agreement as consideration for services rendered.

As consideration for the ~~principals~~sale, upon closing of ~~Soma 72,000~~the transaction, (i) the Company will receive 232,380,952 shares of ~~restricted~~newly created TGS Preferred stock, valued at $12.2 million, and (ii) Messrs. Kerby and Monaco, both of whom hold certain equity interests in NextTrip (discussed above), will receive an aggregate of 69,714,286 TGS common ~~stock (valued~~shares, valued at ~~$180,000),~~$3.66 million, of which ~~$45,000 was earned immediately and the remaining~~11,619,048 TGS common shares will be ~~earned at~~held in escrow for a period of time. The TGS Preferred shares will be redeemable in certain situations, can be sold subject to certain transfer restrictions (including a right of first refusal in favor of TGS), and may be converted into shares of TGS common shares in certain limited circumstances, including mandatory conversion upon the ~~rate~~occurrence 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 paid pursuant to the same 50/50 split.certain events. In the event that the ~~joint venture achieves revenue more than expenses and~~TGS Preferred shares are converted into shares of TGS common shares by the Company ~~recovers~~at any time, the ~~$180,000 value~~Company is obligated to distributed all such shares of TGS common shares in a stock dividend to its shareholders. Concurrently with a determination to convert the TGS Preferred shares into shares of TGS common shares, if ever, the Company will set a shareholder record date for a special dividend to distribute all of the ~~shares, then we agreed to issue Soma a bonus of 50,000~~common shares of ~~restricted common stock. The joint venture (and agreement) each have~~TGS held by the Company to the Company’s shareholders, on a ~~term~~pro-rata basis.

Concurrently with the execution of ~~two years. The~~the Securities Exchange Agreement, the Company, NextTrip, Reinhart and TGS entered into a separation agreement (the “Separation Agreement”) to further document the separation of NextTrip and Reinhart from the Company and to assign, transfer and convey certain assets and liabilities held in NextTrip or the Company’s name, respectively, to NextTrip or the Company, respectively, to allow for the separation of the businesses in the Securities Exchange Agreement at closing of the transaction.

Further, the Separation Agreement terminates certain intercompany agreements and accounts by and between the parties at closing of the transaction, sets rights related to confidentiality, non-disclosure and maintenance of attorney-client privilege matters and also provides for a mutual release by and among the Company, NextTrip and Reinhart for all pre-closing claims between themselves and their officers, directors, affiliates, successors and assigns.

In addition, the Separation Agreement provides for the contribution of (i) $1.5 million to NextTrip and (ii) an additional $1.5 million in ten (10) equal monthly installments beginning July 1, 2022, in exchange for NextTrip, as of May 1, agreeing to assume the ongoing operating expenses of NextTrip and Reinhart. NextTrip has also agreed to ~~use Soma for~~assume payments under that 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~~payment obligation of the ~~issuance~~Company pursuant an Amendment to Intellectual Property Purchase Agreement effective May 18, 2021 by and between the Company, IDS Inc., TD Assets Holding LLC, and Ari Daniels in the approximate amount of ~~90,000 shares of restricted common stock. As of May 29, 2021, a total of 108,000~~$2,500,000, provided, however, that, if the Company fails to make any of the ~~shares~~above installment payments within five (5) business days of being due, ~~to Soma have been issued, and a total of 54,000 shares are potentially due pursuant~~that such IDS payment obligation reverts back to the ~~terms~~Company.

Closing of the ~~agreement discussed above. As not all~~transaction remains subject to various conditions, including (without limitation) regulatory approvals and consummation of a financing by TGS, and is expected to occur in the second half of 2022. Additionally, as a further condition of closing the transaction, TGS shall hold a shareholder meeting as soon as reasonably practicable to approve the transaction, an amendment to the articles of incorporation of TGS to create the TGS Preferred, a 40:1 share consolidation (reverse stock split) and related matters (collectively, the “Transaction Proposals”). In connection with the shareholder meeting, TGS is also obligated to file a circular with the Canadian securities authorities in accordance with Canadian law and the policies of the TSXV. No assurances can be provided that the closing conditions ~~had been~~will be satisfied, ~~for accounting purposes, and as such, this~~or that the transaction ~~has not closed to date. We anticipate it~~ will ~~close within~~be consummated on the 2^nd ~~quarter of fiscal 2022.~~anticipated timeline, or at all.

~~On June 1, 2021, Streeterville agreed~~In addition, in order to ~~defer 50% of~~induce the ~~April 2021 Note Increase which was otherwise~~Company 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~~enter 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 was 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, which November 2020 Transaction Conditions were satisfied effective on 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 have been subject to the June 2021 Note Increase.

~~On June 22, 2021, the Company entered into an~~Securities Exchange Agreement, ~~with Streeterville (the “Streeterville Exchange Agreement~~”), 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.

~~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 included 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 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 thecertain TGS 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 (currently $37.71 per share)(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~~voting support agreement ~~restricting any sales or transfers of any~~pursuant to which they agreed to vote their TGS common shares ~~of common stock~~in favor of the Transaction Proposals.

At closing of the transaction, the Company shall enter into (i) a right of first refusal and distribution agreement that governs certain rights between the parties with respect to the subsequent disposition of the TGS Preferred Shares, and (ii) a stock escrow agreement, pursuant to which a portion of the TGS common shares issued to Messrs. Kerby and Monaco will be held in escrow for a period of ~~18 months~~up to four (4) years (the “Escrow Period”) at which point, if the following conditions have not been met, such Escrow Shares will be canceled and returned to TGS’ treasury: (x) the ~~issuance date. The~~TGS common share trading price at the time of a conversion of Preferred Shares by the Company occurs is at or above $0.06375 (a 115% premium on the closing price), or (y) the Preferred Shares are sold or redeemed by the Company at or above a price of ~~the acquisition of the Initial Go Game Shares is subject to certain closing conditions and requirements which may not be met on a timely basis, if at all.~~$14,030,000 (a 115% premium).

~~As previously disclosed, to date, HotPlay Enterprise Limited (“HotPlay”) has loaned the Company $15 million pursuant to the terms of the HotPlay Exchange Agreement (collectively, the “HotPlay Loans~~”), 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 loaned to the Company. The HotPlay Loans are evidenced by Convertible Promissory Notes (collectively, the “~~HotPlay Notes”), which have an interest rate of 1% per annum.~~

The HotPlay Notes were to be automatically forgiven by HotPlay in the event the HotPlay Exchange Agreement was terminated in certain situations and to 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 certain limitations, in the event the HotPlay Exchange Agreement was terminated in certain other situations. The HotPlay Notes were automatically forgiven by HotPlay as intracompany loans uponAt the closing of the ~~HotPlay Exchange Agreement, effective on June 30, 2021~~.

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 subsidiary of the Company following the closing of the transactions contemplated therein) for 52 million shares of the Company’s common stock (the “~~HotPlay Shares~~”), subject to various closing conditions, including the approval of such transactions by the stockholders of the Company (which approval was received on April 7, 2021) and the approval of The NASDAQ Capital Market for the continued listing of the Company’s common stock following the closing of the HotPlay Exchange Agreement, which approval was subsequently received.

~~We closed the acquisition of HotPlay contemplated by the HotPlay Share Exchange effective on June 30, 2021 (the “Closing~~”). The 52,000,000 shares of the Company’s common stock due to the HotPlay Stockholders were issued effective June 30, 2021. In connection with the closing, we acquired 100% of the outstanding capital shares of HotPlay (making HotPlay a wholly-owned subsidiary of the Company).

The closing of the HotPlay Exchange Agreement also 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.

~~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”) as described in more detail in “Note 5 – Advances for Investments~~”.

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 TGS will consist of seven members, five of whom will be designated by Messrs. Kerby and Monaco and two of which will be designated by Mr. Spiro Khouri of TGS.

As a result of the foregoing, as of May 31, 2022, Reinhart/Zappware and NextTrip were no longer consolidated nor treated as a division of the Company; accordingly, for the three-month period ended May 31, 2022, the Company had two remaining reportable business segments: NextFinTech 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.NextMedia.

~~As of June 23, 2021, all the closing conditions had been satisfied and this transaction has been completed.~~

~~On July 2, 2021, the Company filed a Certificate of Amendment (which was subsequently corrected by a Certificate of Correction to the Certificate of Amendment (the “Certificate of Correction”) in connection with a typographical error, as discussed below)(as corrected by the Certificate of Correction, the “Certificate of Amendment”) to its Articles of Incorporation (the “Articles”) with the Secretary of State of the State of Nevada, to change the Company’s name from “Monaker Group, Inc.” to “NextPlay Technologies, Inc.” (the “Name Change~~”), which Amendment became effective on July 9, 2021. The filing of the Certificate of Amendment was previously approved by the shareholders of the Company at the Special Meeting of Shareholders held on April 7, 2021.

~~On July 6, 2021, the Company filed a Certificate of Correction to the Certificate of Amendment, to correct a typographical error in the Certificate of Amendment.~~

In connection with the ~~Name Change,~~sale plan, the Company has reclassified certain assets and liabilities to present as held for sale. As of May 31, 2022, the Company has classified goodwill and intangible assets as held for sale in current assets as follows:

During the three-month period ended May 31, 2022, the Company performed the impairment assessment and recognized the impairment loss in operation loss from discontinued operations to reflect the expected recoverable amount, comprised of impairment loss on intangible assets of NextTrip amounting to $0.5 million, and impairment loss on goodwill of Reinhart/Zappware, amounting to $0.1 million.

As of February 28, 2022, the Company has classified goodwill and intangible assets as held for sale in non-current assets as follows:

During the year ended February 28, 2022, the Company performed the impairment assessment and recognized the impairment loss for goodwill and intangible assets of Reinhart/Zappware and NextTrip units, as we assessed that the fair value from expected recoverable selling price was lower than the book value, therefore recorded impairment on goodwill amounted to $10.2 million, comprised Reinhart/Zappware in amount $5.0 million and NextTrip in amount $5.2 million and impairment loss on intangible assets of NextTrip amounting to $1.2 million.

The business of NextTrip represented the entirety of the NextTrip operating segment and Reinhart Digital TV was a part of NextMedia operating segment until February 28, 2022. Comparative figures included in the accompanying condensed consolidated financial statements have been reclassified to conform with current period presentation.

The detail of assets and liabilities classified as held for sale as of May 31, 2022 and February 28, 2022 were as follows:

The Consideration expected to be received by the Company upon closing of the transaction – Nonvoting convertible preferred shares of TGS compared with net book value of selling assets as of May 31, 2022 were as follows:

The operating results of held-for-sale entities included in the Company’s ~~common stock, par value $0.00001 per share (the “Common Stock~~”)Statement of Comprehensive Income for the three-month period ended May 31, 2022 were as follows:

The operating result included in the Company’s Statement of Comprehensive income for the three-month period ended May 31, 2021 represented HotPlay only.

The net cashflow of held-for-sale entities are included in the Company’s cash flow statement for the three-month period ended May 31, 2022 were as follows:

No cashflow of held-for-sale entities are included in the Company’s cash flow statement for the three-month period ended May 31, 2021, as it represented HotPlay only.

On June 13, 2022, the Company entered into two promissory notes, each in the principal amount of approximately CAD $231,121 (USD $178,234), ~~began trading on~~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 ~~Nasdaq Capital Market under the new ticker symbol “NXTP,” effective as of the opening of trading hours~~Company. The first note will mature on July ~~9, 2021 (the “Symbol Change”). The new CUSIP number~~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 ~~the Common Stock is 65344G102.~~18% per annum.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

This information should be read in conjunction with the interim unaudited condensed consolidated financial statements and the notes thereto included in this Quarterly Report on Form 10-Q ~~and the unaudited financial statements and notes thereto~~(the “Report”), and Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for the year ended February 28, ~~2021,~~2022, filed with the Securities and Exchange Commission on June ~~8, 2021.~~21, 2022.

Our logo and some of our trademarks and tradenames are used in this Report. This Report also includes 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, and incorporated by reference in, the section entitled “~~Item~~“Item 1A. Risk ~~Factors~~”Factors” of 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 NextPlay Technologies, Inc., is also based on our good faith estimates.

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

In addition, unless the context otherwise requires and for the purposes of this report only:

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.~~with the SEC. 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.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.

Summary of The Information Contained in Management’s Discussion and Analysis of Financial Condition and Results of Operations

Our Management’s Discussion and Analysis of Financial Condition and Results of Operations ~~(MD&A)~~(“MD&A”) is provided in addition to the accompanying consolidated financial statements and notes to assist readers in understanding our results of operations, financial condition, and cash flows. MD&A is organized as follows:

~~The Company is an innovative technology company that~~During the three month period ended May 31, 2022, NextPlay Technologies, Inc., together with its consolidated subsidiaries, is building next generation solutions to power the travel, gaming, and cryptocurrency industries. We believe the most promising part of our business plan is our ability to achieve shareholder value through acquisition and organic growth that presents new opportunities in the leisure space and strengthens our existing technology platforms.

~~Through our subsidiaries NextTrip and Maupintour (soon to be rebranded as NextTrip Journeys), we provide travel~~a technology solutions with a primary emphasis on alternative lodging rental (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, etc.).

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

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

We believe that the Company’s business-to-business (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 the Company’s Booking Engine, travel distributors can sell ALR inventory alongside their existing travel products (i.e., Air/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.

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

These sites include NextTrip.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.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), provides personalized concierge tours and activities at destinations around the world. Our online marketplaces are discussed in greater detail below.

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 the Company’s websites as well as through other distributors. The 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 the 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.

The 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. Moving forward, we hope that Travelmagazine.com will become a central hub of information 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 supported bycompany, offering games, in-game advertising, ~~and allow for promotion of both ALR and Maupintour vacation products.~~

The Company sells its ALR travel inventory through various distribution channels. The primary distribution channel is through its business-to-business (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) and NextTripbusiness.com. Additionally, we anticipate offering high end ALR products along with specialty traveldigital asset products and services ~~via NextTripjourneys.com, targeting high value inventory~~ to ~~customers with complex or high-end travel needs, upon~~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 ~~launch~~existing and acquired technologies.

As of May 31, 2022, NextPlay is organized into two divisions: (i) NextMedia, the Company’s Interactive Digital Media Division and (ii) NextFinTech, the Company’s Finance and Technology Division.

HotPlay Enterprise Limited (“HotPlay”), which is ~~scheduled for August 2021.~~wholly-owned by NextPlay, is an in-game advertising (“IGA”) platform that delivers advertisements into video games without disrupting gameplay, enabling video games to monetize without compromising on the integrity of the game. The platform enables advertisers and merchants of all sizes to hyper-locally deliver promotional coupons to gamers, offering them real world rewards from playing video games. Video games could also deliver relevant virtual rewards through the platform in order to increase retention rate.

Upon receiving the rewards, gamers are able to access them via the HotPlay redemption mobile application (“Redemption App”). The ~~Company’s core holdings are planned to be streamlined by this summer into four key platforms being;~~redemption app also features a list of games integrated with HotPlay IGA, giving video games visibility among the ~~Monaker Booking Engine (MBE) branded as NextTrip ConNextions, Nexttripbusiness.com, NextTrip.com, and Maupintour.com, which will be rebranded as NextTripjourneys.com, and TravelMagazine.com.~~HotPlay user base.

In order to increase HotPlay IGA adoption among third party video game developers, HotPlay has established an in-house game development studio dedicated to developing casual and hyper-casual games that help showcase the capabilities of our technology.

~~On November 16, 2020, the Company acquired~~NextPlay owns 100% of Next Fintech Holdings, Inc. (formerly Longroot, Inc.~~, a Delaware corporation~~) (“~~Longroot~~”Next Fintech”), which in turn ~~owned 57%~~owns 75% of Longroot Limited, a Cayman Islands company (“Longroot ~~Cayman~~”Cayman”). Longroot Cayman ~~owned~~owns 49% of the outstanding ordinary shares (with 51% of the ~~Preferred~~preferred shares owned by two Thai citizen nominee shareholders) of Longroot Holding (Thailand) Company Limited (“Longroot ~~Thailand~~”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~~(“ICO”) Portal that provides digital asset financing and investment services that are fully regulated and licensed by the Securities and Exchange Commission of Thailand (the “Thai SEC”). It is focused on creating Thai regulated cryptocurrencies backed by high quality assets that are designed to be more resistant to market declines. The initial class of assets includes video games, insurance, precious metals, and real estate.

Longroot Thailand is a licensed ICO Portal under the Thai SEC and is regulated under the Thai Digital Asset ~~Business~~ Law ~~and licensed by the Thai Securities and Exchange Commission. Longroot Thailand provides fully regulated and licensed~~which stipulates that all offerings of 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. The Company, with its indirect control over Longroot Thailand, is planninghave 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 the Company’s gaming (with the acquisition of HotPlay) and current travel businesses.

The Company 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. 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). In summary, the Company offers travelers the complete travel package made easy or... Travel Made Easy^TM.

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 website using the above features should reduce ALR/Vacation planning time from hours to minutes and with the convenience of one site (truly “~~Travel Made Easy”).~~

~~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, 2021, the “HotPlay Exchange Agreement” and the transactions contemplated therein, the “HotPlay Share Exchange~~”NextBank International (“NextBank”) ~~with HotPlay~~(previously International Financial Enterprise ~~Limited (“HotPlay”) and the stockholders 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, 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.~~

~~We closed the acquisition of HotPlay contemplated by the HotPlay Share Exchange effective on June 30, 2021 (the “Closin~~g”). The 52,000,000 shares of the Company’s common stock due to the HotPlay Stockholders were issued effective June 30, 2021. In connection with the closing, we acquired 100% of the outstanding capital shares of HotPlay (making HotPlay a wholly-owned subsidiary of the Company).

~~Moving forward, the Company plans to continue its transition to a travel, cryptocurrency, and an in-game advertising company.~~

~~The HotPlay Exchange Agreement and the material terms thereof are described in greater detail in the~~ ~~Definitive Schedule 14A Proxy Statement~~ ~~filed by the Company with the Securities and Exchange Commission on March 4, 2021 (the “Proxy Statement”), under the heading “The HotPlay Exchange Agreement”, beginning on page 143, which information is incorporated by reference herein.~~

~~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 amount of $7,657,024 (the “Axion Debt”), for (i) 3,828,500 shares of Series C Convertible Preferred Stock of the Company (the “Series C Preferred Stock”); and (ii) a warrant, granted to Cern One, to purchase 1,914,250 shares of the Company’s common stock (the “Creditor Warrants~~”)Bank), 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 issuedwholly-owned by ~~the British Columbia Securities Commission, which impacts Axion.~~

The closing of the HotPlay Exchange Agreement 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, have cashless exercise rights,~~NextPlay, is 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 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 (as applicable, the “~~Vesting Date”). All of the Creditor Warrants were granted to Cern One.~~

As a result of the Closing, a change of control of the Company occurred, with the former stockholders of HotPlay obtaining control over the Company. The former stockholders of HotPlay and the former holders of our Series B Convertible Preferred Stock and Series C Convertible Preferred Stock hold 72.6% of our 87,100,403 issued and outstanding shares of common stock following the Closing.

Specifically, in connection with the Closing, and the issuance of shares of common stock of the Company in connection therewith and the Preferred Conversion, effective June 30, 2021, Ms. Nithinan Boonyawattanapisut and Mr. J. Todd Bonner, husband and wife, became the largest shareholders of the Company, beneficially owning 31,117,544 shares of common stock or 35.7% of the Company’s then outstanding common stock (through Ms. Boonyawattanapisut’s control of Red Anchor Trading Corporation, which holds 27,213,606 of such shares of record and Cern One Limited, which holds 3,562,208 shares of common stock, and an additional 314,230 shares of common stock held by Ms. Boonyawattanapisut directly and 27,500 shares held by Mr. Bonner, directly). Separately, Jwanwat Ahriyavraromp and Pornsinee Chalermrattawongz, each beneficially own the 21,966,667 shares of common stock held by Tree Roots Entertainment Group, Ltd. and the 3,533,333 shares of common stock held by Dee Supreme Company Limited, issued in connection with the Closing, due to their status as directors of such entities, which in aggregate total 29.3% of the Company’s outstanding shares of common stock following the Closing.

~~Effective upon the Closing of the HotPlay Share Exchange, the April 7, 2021, resignations of Mr. Pasquale “Pat” LaVecchia, Mr. Doug Checkeris, Mr. Rupert Duchesne, Mr. Robert “Jamie” Mendola, Jr. and Ms. Alexandra C. Zubko, which were to be effective upon the Closing, as previously disclosed in the~~ ~~Current Report~~ on Form 8-K filed by the Company with the Securities and Exchange Commission on April 9, 2021, 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, remained as members of the Board of Directors following the Closing.

In connection with the Closing of the HotPlay Share Exchange, and pursuant to the terms thereof, the Company’s Board of Directors approved the increase in the number of directors from eight (8) to nine (9) and upon the 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 joining William Kerby and Donald Monaco who remained on the Board of Directors following the Closing.

Effective upon the Closing, the number of shares of common stock available for future issuance under the Company’s 2021 Equity Compensation Plan (the “2021 Plan”), which was to be equal to 15% of the Company’s total outstanding shares of common stock following the Closing, was set at 13,065,060 shares of common stock.

~~Further, upon the Closing of the HotPlay Share Exchange, the Board of Directors confirmed the following appointments as executive officers of the Company:~~

We previously operated solely in the travel industry. With the recent acquisition of Longroot, as previously discussed, we are now venturing into the cryptocurrency industry. 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.

~~On October 28, 2020, the Company entered into a non-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, 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 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, but the parties have verbally agreed to extend such date. 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.

~~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; however, the shares of Reinhart were not transferred to the Company until June 2021. 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:~~

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.

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, which a registration statement has been filed in connection with.

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, which a registration statement has been filed in connection with.

~~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 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.~~

~~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.

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 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 (the “Streeterville Exchange Agreement~~”), 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.

~~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~~Entity (“~~IFEB~~”IFE”), 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~~ operating under the laws of the Commonwealth of Puerto ~~Rico and received its international financial entity license on June 18, 2017 from~~Rico. Licensed under Act 273 by the Office of the Commissioner of Financial Institutions ~~of Puerto Rico, in Spanish, “Oficina del Comisionado de Instituciones Financieras” or “OCIF~~”(“OCIF”), ~~as license #51. As a result, IFEB is regulated by OCIF,~~NextBank currently offers concierge services to high net worth individuals 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.~~entrepreneurs, and loan products.

~~Notwithstanding the terms~~NextPlay plans to create a diversified FinTech solution company that offers asset banking, asset management and mobile payment and banking services.

Strategic Sale of ~~the Bill of the Sale,~~Reinhart Digital TV (Zappware) and ~~the payment by~~NextTrip to TGS Esports, Inc.

On June 28, 2022, the Company entered into a series of agreements, including a securities exchange agreement, with William Kerby, the ~~aggregate purchase price pursuant thereto, the transfer~~Company’s co-Chief Executive Officer and director, Donald P. Monaco, a director of ~~the IFEB Shares to~~ the Company, and British Columbia-based TGS E-Sports Inc. (TSX-V: TGS, OTC: TGSEF) (“TGS”), a public company whose securities are listed for trading on 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, and the approval of OCIF, which approval has been provided by OCIF, but which closing is still subject to certain other conditions of closing. The Company anticipates completing acquisition of the IFEB Shares in or around July 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~~Canadian TSX Venture 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 has agreed to sell the Company’s travel business, NextTrip Group, LLC (“NextTrip”), and its 51% ownership of Reinhart Digital TV (the 100% owner of Zappware) to TGS in exchange ~~1,950,000~~for securities of TGS (discussed in further detail below. TGS is a leading esports tournament solutions provider.

As consideration for the sale of Reinhart and NextTrip, upon closing of the transaction, (i) the Company will receive 232,380,952 shares of ~~the Company’s restricted~~newly created nonvoting convertible preferred stock of TGS (the “TGS Preferred”), valued at $12.2 million, and (ii) Messrs. Kerby and Monaco, both of whom hold certain equity interests in NextTrip (discussed above), will receive an aggregate of 69,714,286 TGS common ~~stock (the “Company Shares~~”)shares, valued at $3.66 million, of which 11,619,048 TGS common shares will be held in escrow for ~~5,850~~a period of time. The TGS Preferred 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 Company 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 Company 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 Company Shares and IFEB Preferred Shares, are~~certain situations, can be sold subject to ~~various closing conditions, including, but not limited to IFEB receiving approval from OCIF to issue preferred stock~~certain transfer restrictions (including ~~the Series A preferred shares)~~a right of first refusal in favor of TGS), 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 July 23, 2021, previously by June 30, 2021, the Preferred Exchange Agreement can~~ be ~~terminated by either party with written notice to the other.~~

~~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,converted into shares of TGS common shares in certain limited circumstances, including mandatory conversion upon the ~~Company’s~~occurrence of certain events. In the event that the TGS Preferred shares are converted into shares of TGS 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~~shares by the Company at any time, the Company is obligated to distributed all such shares of TGS common shares in a ~~conversion price equal~~stock dividend to its shareholders. Concurrently with a determination to convert the ~~greater~~TGS Preferred shares into shares of ~~(i)~~TGS common shares, if ever, the ~~closing consolidated bid price~~Company will set a shareholder record date for a special dividend to distribute all 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 closed (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 May 13, 2021, the Company entered into an underwriting agreement (the “May 2021 Underwriting Agreement”) with EF Hutton, formerly Kingswood Capital Markets (“EF Hutton”), 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 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 May 2021 Offering (including the sale of the over-allotment shares) closed on May 18, 2021.~~

~~EF Hutton acted as sole book-running manager for the May 2021 Offering. The Company paid the Underwriters a cash fee equal to 6% of the aggregate gross proceeds received~~TGS held by the Company to the Company’s shareholders, on a pro-rata basis.

In addition to the securities exchange agreement, the Company, NextTrip, Reinhart and TGS also entered into a separation agreement on June 28, 2022, to further document the separation of NextTrip and Reinhart from the Company and to assign, transfer and convey certain assets and liabilities held in ~~connection~~NextTrip or the Company’s name, respectively, to NextTrip or the Company, respectively, to allow for the separation of the businesses in accordance 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.

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. The Company used a portion of the net proceeds from the May 2021 Offering to repay approximately $1.3 million owed to Streeterville, provide capital to IFEB in advance of thesecurities exchange agreement at closing of the ~~acquisition~~transaction. The separation agreement also provides for the termination of ~~control of IFEB (which acquisition is pending, subject to~~certain intercompany agreements and accounts by and between the parties at 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~~transaction, sets rights related to confidentiality, non-disclosure and maintenance of attorney-client privilege matters, and also ~~use~~provides for a mutual release by and among the Company, NextTrip and Reinhart for all ~~or a portion~~pre-closing claims between themselves and their officers, directors, affiliates, successors and assigns.

In addition, the separation agreement provides for the contribution of (i) $1.5 million to NextTrip and (ii) an additional $1.5 million in ten (10) equal monthly installments beginning July 1, 2022, in exchange for NextTrip, as of May 1, 2022, agreeing to assume the ongoing operating expenses of NextTrip and Reinhart. NextTrip has also agreed to assume payments under that certain payment obligation 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.

~~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 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, 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 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 Chief Executive Officer and an employee of the Company.

~~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 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~~effective May 18, 2021, 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, 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 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~~between the Company, IDS ~~agreed to transfer~~Inc., TD Assets Holding LLC, and Ari Daniels in the ~~Paying Party a number of the IDS Shares equal to the~~approximate 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).~~

~~To date, a total of $500,000 has been paid to IDS in exchange for 344,400 shares,~~$2,500,000, provided, however, ~~such shares have not been transferred to the Company to date or cancelled.~~

~~In the event~~that, if the Company fails to make any ~~payment timely, and~~of the ~~Company does not cure such default~~above installment payments within ~~seven~~five (5) business days of ~~written notice of default~~ being ~~provided by~~due, that such 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 the Company (instead of a Paying Party), IDS agreed to transfer the portion of the IDS Shares equal to the Applicable Portion,obligation reverts back to the Company.

~~Until such time~~Closing of the transaction remains subject to various conditions, including (without limitation) regulatory approvals, approval of certain related matters by TGS’ shareholders and consummation of a financing by TGS, and is expected to occur in the second half of 2022. No assurances can be provided that the closing conditions will be satisfied, or that the transaction will be consummated on the anticipated timeline, or at all.

As a result of the foregoing, as ~~the IDS Shares are~~of May 31, 2022, Reinhart/Zappware and NextTrip were 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 the Company, pursuant to the IP Purchase Agreement.~~

~~A further requirement of the IP Purchase Amendment was that IDS enter into~~consolidated nor treated as 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 the Company 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 assetsdivision of the Company; ~~or termination of~~accordingly, for the ~~agreement by Mr. Kerby. Mr. Kerby may also assign his rights under the agreement to another party and/or~~three-month period ended May 31, 2022, 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,had two remaining reportable business segments: NextFinTech and ~~for the benefit of, the Company.~~NextMedia.

Also effective 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.

~~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.~~

~~On July 6, 2021, the Company filed a Certificate of Correction to the Certificate of Amendment, to correct a typographical error in the Certificate of Amendment.~~

~~In connection with the Name Change, the Company’s common stock, par value $0.00001 per share (the “Common Stock”), began trading on the Nasdaq Capital Market under the new ticker symbol “NXTP,” effective as of the opening of trading hours on July 9, 2021 (the “Symbol Change”). The new CUSIP number of the Common Stock is 65344G102.~~

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~~“Public Health Emergency of International ~~Concern~~”Concern” on January 30, 2020 and a global pandemic on March 11, 2020. In March and April 2020, many U.S. states and local jurisdictions began issuing ~~‘stay-at-home’~~’stay-at-home’ orders. For example, the state of Florida, where the Company’s principal business operations are, issued a ~~‘stay-at-home’~~’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. ~~It is currently unclear whether~~Since then, many states have implemented various restrictions in order to minimize 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 continued roll-outspread of COVID-19, ~~vaccines. It is also too early to determine how effective or widespread~~many of which have been fully lifted as of the ~~available vaccines~~date of this filing. There can be no assurances that additional restrictions will not be ~~to curb~~implemented again in the ~~spread or effects of COVID-19, including seasonal variants.~~future.

The COVID-19 pandemic, and governmental responses thereto, including travel restrictions, ‘stay-at-home’ orders and required social distancing orders, severely restricted the level of economic activity around the world, and ~~is having~~had 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.~~businesses, the majority of which have now been lifted.

The measures implemented to contain the COVID-19 pandemic have had, and ~~are expected to~~may in the future have 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 still uncertain and difficult to predict at this time. The pandemic could continue to ~~impede~~negatively affect global economic activity for an extended period of time, even as restrictions have been lifted in ~~many~~most jurisdictions and vaccines are widely available in the United States and certain other countries. The effects of COVID-19 may 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.

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

It is difficult to estimate COVID-19’s impact on future revenues, results of operations, cash flows, liquidity or financial condition, but such impacts have been, and likely will continue to be, significant and could continue to have a material adverse effect on our business, financial condition, results of operations, cash flows and liquidity position for the foreseeable future. In the near term, we do expect that the COVID-19 pandemic will continue to negatively affect our operating results and year-over-year results.

As a result of the above, 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.

As discussed elsewhere in this report, as a result of the proposed sale of NextTrip and Reinhart/Zappware to TGS, Reinhart/Zappware and NextTrip were no longer consolidated nor treated as a division of the Company, and instead have been classified as assets held for sale; accordingly, unless otherwise stated, the results of continuing operations included herein for the three-month period ended May 31, 2022 exclude the results of NextTrip and Reinhart/Zappware.

For the Three ~~Months~~months Ended May 31, ~~2021~~2022 Compared to ~~the Three Months~~three months Ended May 31, ~~2020~~2021

Our total revenues increased ~~36%~~ to ~~$10,734~~$0.47 million for the three months ended May 31, 2022, as compared to $0 for the three months ended May 31, 2021 ~~compared to $7,874 for the three months ended May 31, 2020, an~~of HotPlay. The increase ~~of $2,860~~is derived from the ~~prior period. The~~loan portfolio organic growth and increase in ~~sales is mainly driven by the reduced impact~~financial services of the COVID-19 pandemic on the global travel industry. As more countries and travel destinations lift COVID-19 restrictions, we have experienced an increase in travel reservations. Some travelling schedules have been postponed to later in the year, or the beginning of next year; however, the ultimate effect, duration and effects of the COVID-19 pandemic are currently unknown at this time; provided that we expect such pandemic to continue to have a material adverse effect on our revenues for the remainder of the calendar year and continuing throughout calendar 2021.NextBank.

Our total cost of revenues increased ~~78%~~ to ~~$9,828~~$0.1 million for the three months ended May 31, ~~2021,~~2022, compared to ~~$5,527~~$0 for the three months ended May 31, ~~2020, an increase of $4,301.~~2021. Our gross profit was ~~$906~~$0.36 million for the three months ended May 31, ~~2021,~~2022, compared to ~~$2,347~~$0 for the three months ended May 31, ~~2020.~~2021. Cost of revenues ~~increased,~~ and gross profit ~~decreased, based on the type~~increased in line with revenue of ~~travel booked in this quarter compared to last quarter, which required more cost of revenues.~~

Our operating expenses include general and administrative, ~~expenses,~~ salaries and benefits, technology and development, stock-based compensation, selling and ~~promotions expenses,~~promotion and depreciation and amortization. Our operating expenses increased ~~by $3,251,284 or 270%~~ to ~~$4,456,395~~$4.9 million for the three months ended May 31, ~~2021,~~2022, as compared to ~~$1,205,111~~the $0.5 million for the three months ended May 31, ~~2020.~~ 2021.

(i) ~~increased~~ general and administrative expenses, ~~of $1,953,369, driven~~which increased to $2.3 million for the three months ended May 31, 2022, as compared to $0.1 million for the three months ended May 31, 2021. The increase is mainly ~~by an increase in loan related expenses of $674,926, investor relation related expenses of $769,962~~due to professional and ~~legal~~consultant fees of ~~$279,628;~~ $1.8 million;

(ii) a ~~$426,226~~$1.3 million increase in salaries and benefits, ~~related~~due to ~~additional personnel;~~ having an increased number of employees 2022 compared to 2021;

(iii) a ~~$283,011~~$0.4 million increase in ~~marketing~~stock-based compensation given to consultants and ~~promotion expenses to support new product launches;~~business vendors; and

(iv) a ~~$486,347~~$0.3 million increase in depreciation and amortization ~~expense mainly related to additional debt issuance costs.~~from a larger asset size of the Company.

Our other income and expenses include valuation gain or loss on investments, interest expense, and other income.

Our total other expenses ~~increased~~amounted to ~~$3,046,250~~$0.1 million for the three months ended May 31, 2022, compared to other income of $0.04 million for the three months ended May 31, 2021. The period over period change is mainly attributable to the interest expense of $0.12 million.

We had an increase in profit in non-controlling interest of $0.5 million for the three months ended May 31, 2022, compared to a loss in non-controlling interest of $0.2 million for the three months ended May 31, 2021, ~~compared~~mainly due to ~~$846,183~~a profit from operation for the period from Reinhart/Zappware in the 2022 period.

We had a net loss attributable to the Company of $4.5 million for the three months ended May 31, ~~2020,~~2022, compared to a ~~change of $2,200,067 from the prior period. The increase is mainly~~net loss attributable to the ~~valuation loss, net~~Company of ~~our holdings in Axion Ventures, Bettwork, Verus and Recruiter.com, as described in greater detail in “Note 5 – Investment in Unconsolidated Affiliates”, which resulted in a loss of $2,841,871~~$0.58 million for the three months ended May 31, 2021, compared to a loss of $341,933 for the three months ended May 31, 2020, for an additional loss of $2,499,938. This additional loss was partially offset by a reduced loss on the sale of unconsolidated affiliates, Verus and Recruiter holdings, of $532,209.

We had a net loss of $7,501,738 for the three months ended May 31, 2021, compared to a net loss of $2,048,947 for the three months ended May 31, 2020, resulting in an increase in net loss of $5,452,781 or 266% from the prior period. The increase in the net loss was primarily due to the increase in operating expenses of ~~$3,251,284~~$4.3 million.

Loss from discontinued operations $0.8 million represents 2 reporting entities below:

The discontinued operations classified as held for sale were considered for its impairment since March 1, 2022 and ~~an increase~~did not continue to depreciate/amortize their fixed assets per accounting standard, this primarily resulted in ~~other expenses of $2,200,067, as described in greater detail above.~~net profit for Reinhart/Zappware.

On May 31, ~~2021,~~2022, we had ~~$7,525,898~~$2.4 million of cash on-hand, which was ~~an increase~~decreased from $6.6 million as of ~~$4,884,910 from $2,640,988 at~~ February 28, ~~2021. The increase in~~2022 due primarily to cash ~~on hand was mainly attributed to net proceeds received~~out flow from ~~financing activities of $27,552,975, which was partially offset by cash used for operating expenses of $2,237,886 and cash used by~~ investing activities of ~~$20,430,177.~~ $3.9 million for intangible asset acquisition.

As of May 31, ~~2021,~~2022, the Company had total current liabilities of $28,199,308, consisting mainly of notes payable, net in the form of Secured Notes owed to Streeterville Capital LLC of $9,096,237 and convertible notes payables with HotPlay of $15,000,000 (which were forgiven as intraparty loans upon the closing of the HotPlay acquisition effective on June 30, 2021); accounts payable and accrued expenses of $1,732,719; and an operating lease liability of $1,257,820. We anticipate that we will satisfy these amounts from proceeds derived from equity sales, sales of marketable securities, financing, cash on hand and revenue generated from sales.$41.8 million, which represented:

As of May 31, ~~2021,~~2022, we had ~~$49.8~~approximately $106.4 million in total assets, ~~$28.2~~$43.2 million in total liabilities, working capital of ~~$6.6~~$13.8 million and a total accumulated deficit of ~~$140.9~~$44.9 million.

~~Net cash used in~~Cash provided by operating activities ~~increased to $2,237,886~~was $0.5 million for the ~~quarter~~three months ended May 31, ~~2021,~~2022, compared to ~~$1,012,674~~$0.6 million of cash used in operating activities during the ~~quarter~~three months ended May 31, ~~2020.~~2021. The increase was mainly ~~the result of the Company’s net loss from operations offset by an increase in valuation loss, net.~~due to operating expense and other related activities.

Net cash used in investing activities ~~increased to $20,430,177~~was $3.9 million for the quarter ended May 31, ~~2021,~~2022, as compared to net cash used in investing activities of ~~$147,552~~$12.5 million for ~~quarter~~three months ended May 31, ~~2020.~~2021. The ~~increase can be attributed mainly to~~ cash used ~~as advances~~in investing activities are mainly attributable to the intangible asset acquisition of GoGame and travel platform in 2022 while 2021 represented HotPlay’s cashflow used for ~~investments~~reverse takeover activities.

Net cash used in ~~Reinhart Interactive TV and IFEB as well as~~financing activities was $0.8 million for the ~~purchase of intangible assets and website development costs.~~

~~Net~~three months ended May 31, 2022, compared to net cash provided by financing activities ~~increased to $28,655,041~~of $13.8 million for the ~~quarter~~three months ended May 31, ~~2021, compared to $1,071,534 for~~2021. In 2022, the ~~quarter ended May 31, 2020. The increase~~decrease was primarily due to ~~funds~~repayment of notes payable - related party of $1.0 million while 2021 represented HotPlay’s cashflow received from ~~the sale of common stock and net cash provided by promissory notes.~~

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~~”)shareholders in ~~connection~~conjunction 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, 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 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.

We have ~~very~~ limited financial resources. ~~We currently~~As of May 31, 2022, we have aworking capital of $13.8 million. Our monthly cash requirement ofis approximately ~~$950,000, exclusive of capital expenditures. Management intends to seek additional equity or obtain additional credit facilities or loans. However, we may be unable~~$1.5 million.

We will need 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 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 capital~~borrow loans to support the on-going operation, ~~and increased~~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~~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 cover~~including 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, ~~will~~would negatively impact our business, financial condition, and liquidity. ~~As of May 31, 2021, we had approximately $28.2 million of current liabilities.~~ We currently ~~do not~~ have ~~the~~limited 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.

To date, we have funded our operations with the proceeds from equity and debt financings and we anticipate we will need to meet our funding requirements through the sale of additional 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 dollars to properly market our services and fund the operations for the next 12 months.

Although we have not seen any significant reduction in revenues to date, we have seen some consolidation in our ~~capital requirements~~industry during economic downturns. These consolidations have not had a negative effect on our total sales; however, should consolidations and downsizing in the industry continue to occur, those events could adversely impact our revenues and earnings 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 either generate sales or determine that resources would be more efficiently used elsewhere.

Inflation has increased during the periods covered by this Report, and is expected to continue to increase for the near future. Inflationary factors, such as increases in interest rates, overhead costs and transportation costs may adversely affect our operating 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 experience some effect in the near future (especially if inflation rates continue to rise) due to supply chain constraints, consequences associated with COVID-19 and the ongoing conflict between Russia and Ukraine, employee availability and wage increases.

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 offering. On November 4, 2021, the Company paid down the outstanding balance of the March 2021 Streeterville Note in the amount of $6,000,000 with funds raised through the November 2021 registered direct offering.

As of May 31, 2022, the remaining aggregate principal balance of the March 2021 Streeterville Notes was $0.

On October 22, 2021, the Company entered into the October 2021 Note Purchase Agreement with Streeterville, pursuant to 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.

On April 29, 2022, the Company entered into the Standstill Agreement with Streeterville, pursuant to which, Streeterville agreed not to seek to redeem any portion of the October 2021 Streeterville Note (in the original principal amount of $1,665,000) until September 18, 2022. As consideration for such agreement, the outstanding balance of the October 2021 Note was increased by $87,639.33 (the “Standstill Fee”); as a result, the outstanding balance of the October 2021 Note as of April 29, 2022 was $1,840,912.84 (including outstanding interest).

As of May 31, 2022, the remaining aggregate principal balance of the October 2021 Streeterville Notes was $1,752,639, plus accrued interest of $104,708.

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.

As of May 31, 2022, the remaining aggregate principal balance of the May 2022 Streeterville Notes was $2,765,000, plus accrued interest of $20,039.

On June 2, 2022, the Company entered into a Global Amendment to satisfy the requirement that HotPlay become a co-borrower on the October 2021 Streeterville Note and the May 2022 Streeterville Note and jointly and severally assume all of the obligations and duties of the Company under those notes. As a result, all references to “Borrower” or the “Company” in such notes now jointly refer to HotPlay and NextPlay. Streeterville also agreed to waive its right to enforce an increase in the ~~near term and long-term~~balance of the October 2021 Streeterville Note due to the ~~impact~~Company’s failure to add HotPlay as a co-borrower on the October 2021 Streeterville Note within the prescribed period of time to do so. The Global Amendment does not alter any other terms of the ~~COVID-19 pandemic,~~notes.

On June 13, 2022, the ~~resulting reduced demand~~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 ~~travel~~legal services previously rendered to the ~~increases in cancellations and re-bookings,~~Company. The first note will mature on July 31, 2022, and the ~~extent~~second note will mature on September 1, 2022; provided, however, that if the Company fails to ~~which~~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.

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 with lease terms ranging from five to nine years, with rental costs for all such ~~pandemic may further impact the ability~~properties amounting to an aggregate of ~~our customers to fulfill their payment obligations.~~approximately $19,546.14 per month.

The discussion and analysis of the Company’s financial condition and results of operations are based upon its consolidated unaudited financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these unaudited financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent liabilities. On an on-going basis, management evaluates past judgments and estimates, including those related to bad debts, accrued liabilities, convertible promissory notes and contingencies. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. The accounting policies and related risks described in the Company’s Annual Report on Form 10-K for the fiscal year ended February 28, 2022, which was filed with the SEC on June 21, 2022, are those that depend most heavily on these judgments and estimates. As of May 31, ~~2021,~~2022, there had been no material changes to any of the critical accounting policies contained therein.

For more information on recently issued accounting standards, see in “Note 1 – Summary of Business Operations and Significant Accounting Policies”, to the Notes to Consolidated Financial Statements included herein under “Part I - Financial Information - Item 1. Financial Statements”.

This represents the risk of loss that may result from the potential change in value of a financial instrument because of fluctuations in interest rates and market prices. We do not currently have any trading derivatives, nor do we expect to have any in the future. We have established policies and internal processes related to the management of market risks, which we use in the normal course of our business operations.

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 Principal Executive Officer (Ms. Boonyawattanapisut, our Co-Chief Executive ~~Officer~~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 report, an evaluation was carried out under the supervision and with the participation of the Company’s management, including its ~~Chief~~Co-Chief Executive Officer and Chief Financial Officer, of the effectiveness of its disclosure controls and procedures. Based on that evaluation, the Company’s Co-Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures, as of May 31, ~~2021,~~2022, the end of the period covered by this Quarterly Report on Form 10-Q, 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 Principal Executive Officer (Ms. Boonyawattanapisut our Co-Chief Executive ~~Officer~~Officer) and our Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

As of May 31, ~~2021,~~2022, there were no changes in our internal control over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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.

Such current litigation and prior settlements are described in, and incorporated by reference in, this “~~Item~~“Item 1. Legal ~~Proceedings~~”Proceedings” from, Part I, Item 1 of this Quarterly Report on Form 10-Q in the Notes to Consolidated Financial Statements in “~~Note 12~~“Note 11 - Commitments and ~~Contingencies~~”Contingencies”, under the heading “~~Legal Matters~~”“Legal Matters”. The Company believes that the resolution of currently pending matters ~~will not~~could 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 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.

There have been no material changes from the risk factors previously disclosed in Part I, Item 1A of the Company’s Annual Report on Form 10-K for the year ended February 28, ~~2021,~~2022, filed with the ~~Commission~~SEC on June ~~8, 2021,~~21, 2022, under the heading “~~Risk Factors” except as discussed below,~~“Risk Factors”, and investors should review the risks provided in the Form 10-K, Form 10-Q, and below, prior to making an investment in the Company. The business, financial condition and operating results of the Company can be affected by a number of factors, whether currently known or unknown, including but not limited to those described in the Annual Report on Form 10-K for the year ended February 28, ~~2021, under “Risk Factors~~”2022, or below, any one or more of which could, directly or indirectly, cause the Company’s actual financial condition and operating results to vary materially from past, or from anticipated future, financial condition and operating results. Any of these factors, in whole or in part, could materially and adversely affect the Company’s business, financial condition, operating results and stock price.

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 May 31, ~~2021,~~2022, the Company had an accumulated deficit of ~~$140,910,961.~~$45 million. Net loss from continuing operation and from discontinued operations for the three months ended May 31, ~~2021,~~2022, amounted to ~~$8,603,805.~~$4.9 million and $0.6 million, respectively. Our ~~travel operations~~FinTech Division generated a gross ~~profit~~profits of ~~only $906~~$0.36 million for the three months ended May 31, ~~2021,~~2022, and as of May 31, ~~2021,~~2022, we had working capital of ~~$6,605,094.~~$13.8 million. 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. 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 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 market 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 global travel,~~ cryptocurrency, gaming and banking ~~(assuming the IFEB acquisition is successfully completed)~~ industries in general ~~such as COVID-19, contractions in the global travel industry, cryptocurrency, gaming and banking (assuming the IFEB acquisition is successfully completed) regulatory changes,~~ as compared to larger competitors.

We currently have a monthly cash requirement of approximately ~~$950,000.~~$1.5 million. 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 May 31, ~~2021~~2022 and February 28, ~~2021,~~2022, we had ~~$28,199,038~~$43.6 million and ~~$6,835,073,~~$27 million, respectively, 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 2% 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 stock and other equity 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 equity to fund our operations and 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 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, the 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 herein 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.

The ~~COVID-19 pandemic has~~sale of the Company’s travel and media businesses is contingent upon the satisfaction of a number of conditions, may not be completed on the currently contemplated timeline, or at all, and may not achieve the intended benefits.

On June 29, 2022, we announced that we had entered into a series of agreements with TGS, pursuant to which the Company agreed to sell TGS its travel and Zappware media businesses, subject to satisfaction of various closing conditions. The transaction may not be completed as currently contemplated, or at all, and may not provide the benefits that we intend. Completion of the proposed sale is ~~expected~~subject to ~~continue~~certain closing conditions, including, without limitation, TSXV’s consent and approval of the transaction, approval of the transaction and certain related matters by TGS’ shareholders and consummation of a financing by TGS. The proposed transaction is complex in nature, and may be affected by unanticipated developments, disruptions in the credit or equity markets, or changes in general economic conditions. These or other unanticipated developments could delay or prevent the transaction from closing or cause it to occur on terms or conditions that are less favorable than anticipated.

Even if the transaction is completed, it may not be successful in accomplishing our objectives. Additionally, even if completed, no assurances can be provided that the TGS Preferred shares will ever be converted into shares of TGS common shares and distributed to our stockholders through a special dividend, sold by the Company or redeemed by TGS at any point. Additionally, there is the potential for business disruption to each company and significant separation costs. Planning and executing the transaction will require significant additional time, effort and expense, and may divert the attention of our management and employees, and those of TGS from other aspects of the business operations, and any delays in the completion of the transaction may increase the amount of time, effort, and expense that is devoted to the transaction. The sale of our travel and media businesses to TGS could cause our customers or customers of TGS to delay or defer decisions to purchase products or renew contracts, or to end their relationships. Any of these factors could have a material adverse ~~impact on the travel industry and our business, operating results, and liquidity.~~

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 and 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 previously 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.

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. COVID-19 could lead 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~~price of ~~operations and cash flows, potentially for a prolonged period.~~

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

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. Furthermore, we do not currently anticipate future revenues will be sufficient to support or operating expenses in the near term.

Separately, our capital requirements associated with our travel division 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 abilityshares of our ~~customers to fulfill their payment obligations.~~

As a result of the above, in the event we are not able to raise sufficient capital to support our options, 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.

~~Economic downturns and market conditions beyond HotPlay’s control could adversely affect HotPlay’s business, financial condition, and results of operations.~~

HotPlay’s business depends on the overall demand for advertising, video games, and other technology offerings, and as to HotPlay, on the economic health of advertisers that benefit from its platform. Economic downturns or unstable market conditions may cause advertisers to decrease or pause their advertising budgets, which could reduce spend through HotPlay’s platform and adversely affect its business, financial condition, and results of operations. Similarly, economic downturns could also decrease the amount of disposable income gamers have available for the purchase of HotPlay’s video game offerings. Additionally, as described above, public health crises may disrupt the operations of HotPlay’s customers and partners for an unknown period, including as a result of travel restrictions and/or business shutdowns, all of which could negatively impact its business and results of operations, including cash flows. As HotPlay explores new countries to expand its business, economic downturns or unstable market conditions in any of those countries could result in HotPlay’s investments not yielding the returns it anticipates.

~~HotPlay’s future success depends on the continuing efforts of its key employees, including~~ ~~Ms. Nithinan Boonyawattanapisut~~ ~~and Mr. Mark Vange, and its ability to attract, hire, retain and motivate highly skilled employees in the future.~~

~~HotPlay’s future success depends on the continuing efforts of~~ ~~Ms. Nithinan Boonyawattanapisut (the director of HotPlay), Mr. Mark Vange (the Chief Technology Officer of HotPlay),~~ and other key employees. HotPlay relies on the leadership, knowledge, and experience that its executive officers provide. They foster HotPlay’s corporate culture, which has been instrumental to its ability to attract and retain new talent. HotPlay also relies on its ability to hire and retain qualified and motivated employees. The market for talent in HotPlay’s areas of operations, is intensely competitive, as technology companies like HotPlay compete to attract the best talent. As a result, HotPlay may incur significant costs to attract and retain employees, including significant expenditures related to salaries and benefits and compensation expenses related to equity awards, and it may lose new employees to competitors or other companies before HotPlay realizes the benefit of its investment in recruiting and training them. New employees often require significant training and, in many cases, take significant time before they achieve full productivity.

Employee turnover, including changes in HotPlay’s management team, could disrupt its business. None of HotPlay’s key employees have an employment agreement for a specific term, and all of its employees may terminate his or her employment with HotPlay at any time. The loss of one or more of HotPlay’s executive officers, or its inability to attract and retain highly skilled employees could harm HotPlay’s business, financial condition, and results of operations.

~~Seasonal fluctuations in advertising activity could harm HotPlay’s revenue, cash flow, and results of operations.~~

HotPlay’s revenue, cash flow, results of operations, and other key operating and performance metrics may vary from quarter to quarter due to the seasonal nature of its clients’ spending on advertising campaigns. For example, clients tend to devote more of their advertising budgets to the fourth calendar quarter to coincide with consumer holiday spending. Moreover, advertising inventory in the fourth quarter may be more expensive due to increased demand for it. Seasonality could have a significant impact on HotPlay’s revenue, cash flow, and results of operations from period to period.

~~HotPlay relies on external developers to develop some of its software products.~~

~~HotPlay relies on external software developers to develop some of its software products. Because HotPlay depends on external developers, it is subject to the following risks:~~

~~Lawsuits have been filed and may continue to be filed, against publishers of interactive entertainment software products.~~

In prior years, lawsuits have been filed against numerous interactive entertainment companies, by the families of victims of violence, alleging that interactive entertainment products influence the behavior of the perpetrators of such violence. These lawsuits have been dismissed, but similar additional lawsuits could be filed in the future. It is uncertain whether HotPlay’s insurance carriers would cover all or any amounts for which it might be liable if such future lawsuits are not decided in its favor. Further, any such lawsuit could result in increased governmental scrutiny, harm to HotPlay’s reputation, reduced demand by consumers for its products, or decreased willingness by customers to use or purchase, or by its partners to provide marketing support for, those products. Such results could divert development and management resources, increase legal fees and other costs, and have other negative impacts on HotPlay’s business.

~~HotPlay’s business may be harmed if its distributors, retailers, development and licensing partners, or other third parties with whom it is affiliated, act in ways that put its brands at risk.~~

In many cases, HotPlay’s business partners are given access to sensitive and proprietary information or control over intellectual property to provide services and support. These third parties may misappropriate information or intellectual property and engage in unauthorized use of it. The failure of these third parties to provide adequate services and technologies, the failure of third parties to adequately maintain or update their services and technologies, or the misappropriation or misuse of this information or intellectual property could result in a disruption to HotPlay’s business operations or an adverse effect on its reputation and may negatively impact its business. Similarly, actions taken by third parties with whom HotPlay may be affiliated may act in a way that places its brands at risk, which could hurt its reputation and may negatively impact its business.

HotPlay uses open-source software in connection with certain of its games and services, which may pose particular risks to its proprietary software, products, and services in a manner that could harm its business.

HotPlay uses open-source software in connection with some of the games and services it offers. 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 HotPlay’s use of the open-source software. Were it determined that HotPlay’s use was not in compliance with a particular license, it 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 its game or technology development efforts, any of which could negatively impact its business.

HotPlay’s products are subject to the threat of piracy and unauthorized copying, and inadequate intellectual property laws and other protections could prevent it from enforcing or defending 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 its games.

HotPlay relies on a variety of methods, including a combination of copyright, patent, trademark, and trade secret laws and employee and third-party non-disclosure agreements, to protect its proprietary rights. It owns or licenses various copyrights, patents, trademarks, and trade secrets. The process of registering and protecting these rights in various jurisdictions is expensive and time-consuming. Further, HotPlay is aware that some unauthorized copying occurs, and if a significantly greater amount of unauthorized copying of its software products were to occur, it could negatively impact its business.

Piracy is a persistent problem for HotPlay, and policing the unauthorized sale, distribution, and use of products is difficult, expensive, and time-consuming. Further, the laws of some countries in which HotPlay’s 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, though HotPlay takes steps to make the unauthorized sale, distribution, and use of its products more difficult and to enforce and police its rights, as do the operators of other platforms on which many of its 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 HotPlay’s 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 HotPlay’s business.

~~Existing intellectual property laws may not provide adequate protection for HotPlay’s products in connection with emerging technologies.~~

~~The insolvency or business failure of any of HotPlay’s business partners could negatively impact HotPlay.~~

Retailers and distributors in the interactive entertainment industry have from time to time experienced significant fluctuations in their businesses and a number of them have failed. Challenging economic conditions may impair the ability of HotPlay’s customers to pay for products it has purchased and, as a result, HotPlay’s reserves for doubtful accounts and write-off of accounts receivable could increase and, even if increased, may turn out to be insufficient. Further, the insolvency or business failure of other types of business partners could result in disruptions to the distribution of HotPlay’s products or the cancellation of contractual arrangements that it considers to be favorable. A payment default by, or the insolvency or business failure of, a significant business partner could negatively impact HotPlay’s business.

~~HotPlay is a global company and is subject to the risks and uncertainties of conducting business outside of the U.S.~~

HotPlay conducts business throughout the world. Moving forward, HotPlay expects that international sales will continue to account for a significant portion of its total revenues and, moreover, that sales in emerging markets in Asia and elsewhere will continue to be an important part of its sales. As such, it is and may be increasingly, subject to risks inherent in foreign trade generally, as well as risks inherent in doing business in emerging markets, including increased tariffs and duties, compliance with economic sanctions, fluctuations in currency exchange rates, shipping delays, increases in transportation costs, international political, regulatory and economic developments, unexpected changes to laws, regulatory requirements, and enforcement on HotPlay and its partners and differing local business practices, all of which may impact profit margins or make it more difficult, if not impossible, for it to conduct business in foreign markets.

A deterioration in relations between either HotPlay or the United States and any country in which HotPlay has significant operations or sales, or the implementation of government regulations in such a country, could result in the adoption or expansion of trade restrictions, including economic sanctions, that could have a negative impact on HotPlay’s business.

In addition, cultural differences may affect consumer preferences and limit the international popularity of games that are popular in one jurisdiction or require HotPlay to modify the content of the games or advertising methods, or the method by which it charges customers, to be successful. If HotPlay does not correctly assess consumer preferences in the countries in which it sells products or offers services, or if the other risks discussed herein come to fruition, it could negatively impact its business.

~~Fluctuations in currency exchange rates could negatively impact HotPlay’s business.~~

HotPlay transacts business in various currencies other than the U.S. dollar and has international sales and expenses denominated in currencies other than the U.S. dollar, subjecting it to currency exchange rate risks. A substantial portion of HotPlay’s payments and receipts are denominated in local currencies, which could fluctuate against the U.S. dollar. The impact of foreign currency fluctuations, particularly the strengthening of the U.S. dollar, may have an asymmetric and disproportional impact on HotPlay’s business. In addition, interest rate volatility, including lower interest rates resulting from actions taken in connection with the COVID-19 pandemic, can decrease the amount of interest earned on HotPlay’s cash, cash equivalents, and short-term investment portfolios.

~~HotPlay’s games are subject to scrutiny regarding the appropriateness of their content.~~

Certain app stores use rating systems for the content which is made available through such app stores (including Apple and Google). If HotPlay is unable to obtain the ratings it has targeted for products, it could have a negative impact on its business. In some instances, it may be required to modify products to meet the requirements of the rating systems, which could delay or disrupt the release of any given product, or may prevent its sale altogether in certain territories. Further, if one of HotPlay’s games is “re-rated” for any reason, a ratings organization could require corrective actions.

HotPlay’s business, products, and distribution are subject to increasing regulation in key territories. If it does not successfully respond to these regulations, its 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, that may affect the way in which HotPlay, and other industry participants, may offer content and features, and distribute and advertise products. These laws, regulations, and investigations are related to the 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 at one time or another 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 the 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, HotPlay’s games could in the future become subject to gambling-related rules and regulations and expose it 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 such as HotPlay 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 HotPlay’s products in countries in which it does business may harm the sales of such products, as the products it is able to offer to customers and the size of the potential audience for such products may be limited. HotPlay 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 HotPlay’s 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 HotPlay’s reputation.

~~Change in government regulations relating to the Internet could negatively impact HotPlay’s business.~~

HotPlay relies on consumer’s/user’s access to significant levels of Internet bandwidth for the digital delivery of its content and the functionality of its 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 HotPlay’s consumer’s/user’s online experiences, decrease the demand for its products and services or increase its cost of doing business. Given the 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 HotPlay’s products and services require, it could experience discriminatory or anti-competitive practices that could impede its growth, cause HotPlay to incur additional expenses, or otherwise negatively impact its business.

~~HotPlay depends on servers and networks to operate its games and advertising. If HotPlay were to lose functionality in any of these areas for any reason, its businesses may be negatively impacted.~~

The business of HotPlay relies on the continuous operation of servers, some of which are owned and operated by third parties. Although HotPlay strives 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 circumvent security measures, a failure of disaster recovery service, or the failure of a company on which HotPlay is relying for server capacity to provide that capacity for whatever reason would likely degrade or interrupt the functionality of its 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.

HotPlay also relies 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 its ability to operate, which could result in a loss of revenue and otherwise negatively impact its business.

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

HotPlay derives a significant portion of its revenues through advertisements and offers it serves to gamers. HotPlay needs to maintain good relationships with advertisers to provide it with 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 HotPlay’s relationship with any advertising partners terminates for any reason, or if the commercial terms of its relationships are changed or do not continue to be renewed on favorable terms, HotPlay would need to qualify new advertising partners, which could negatively impact its 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.

~~HotPlay’s business is highly competitive. The competition presents an ongoing threat to the success of HotPlay’s business.~~

HotPlay 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. HotPlay faces significant competition in every aspect of its business, including 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. HotPlay competes with companies that offer products across broad platforms that replicate the capabilities it provides. Some of its competitors may be domiciled in different countries and subject to political, legal, and regulatory regimes that enable them to compete more effectively than HotPlay. In addition, HotPlay faces competition from traditional, online, and mobile businesses that provide media for marketers to reach their audiences and/or develop tools and systems for managing and optimizing advertising campaigns.

Some of HotPlay’s current and potential competitors may have greater resources or stronger competitive positions in certain product segments, geographic regions, or user demographics than it does. These factors may allow competitors to respond more effectively to new or emerging technologies and changes in market conditions. HotPlay’s competitors may develop products, features, or services that are similar to its or that achieve greater acceptance may undertake more far-reaching and successful product development efforts or marketing campaigns or may adopt more aggressive pricing policies.

~~HotPlay’s ability to compete effectively depends upon many factors both within and beyond its control, including:~~

~~● the popularity, usefulness, ease of use, performance, and reliability of its products compared to its competitors’ products;~~

~~● the timing and market acceptance of products, including developments and enhancements to its or its competitors’ products;~~

~~● its safety and security efforts and its ability to protect user data and to provide users with control over their data;~~

~~● HotPlay’s frequency, size, format, quality, and relative prominence of the ads displayed by it or its competitors;~~

~~● marketing and selling efforts, including HotPlay’s ability to measure the effectiveness of its ads and to provide marketers with a compelling return on its investments;~~

~~● its ability to establish and maintain developers’ interest in building mobile and web applications that integrate with their applications, games, and offerings;~~

~~● changes mandated by legislation, regulatory authorities, or litigation, some of which may have a disproportionate effect on it;~~

~~● acquisitions or consolidation within its industry, which may result in more formidable competitors;~~

~~● its ability to attract, retain, and motivate talented employees, particularly software engineers, designers, and product managers;~~

If HotPlay is not able to compete effectively, its user base and level of user engagement may decrease, it may become less attractive to developers and marketers, and its revenue and results of operations may be materially and adversely affected.

~~HotPlay’s new products and changes to existing products could fail to attract or retain users or generate revenue and profits.~~

HotPlay’s ability to retain, increase, and engage its user base and to increase revenue depends heavily on its ability to continue to evolve existing products and to create successful new products, both independently and in conjunction with developers or other third parties. HotPlay may introduce significant changes to its existing products or acquire or introduce new and unproven products, including using technologies with which they have little or no prior development or operating experience. In addition, the introduction of new products, or changes to existing products, may result in new or enhanced governmental or regulatory scrutiny or other complications that could adversely affect HotPlay’s business and financial results. If HotPlay’s new or enhanced products fail to engage users, marketers, or developers, or if its business plans are unsuccessful, it may fail to attract or retain users or to generate sufficient revenue, operating margin, or other value to justify its investments, and its business may be adversely affected.

HotPlay’s 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 its business.

HotPlay’s products and internal systems rely on software and hardware, including software and hardware developed or maintained internally and/or by third parties, which is highly technical and complex. In addition, HotPlay’s 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 it relies has contained, and will in the future contain, errors, bugs, or vulnerabilities, and its systems are subject to certain technical limitations that may compromise its ability to meet its 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 HotPlay relies 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 HotPlay’s terms, contracts, or policies, delayed product introductions or enhancements, targeting, measurement, or billing errors, compromised ability to protect the data of its users and/or its intellectual property, or reductions in its ability to provide some or all of its services. In addition, any errors, bugs, vulnerabilities, or defects in HotPlay’s systems or the software and hardware on which it relies, failures to properly address or mitigate the technical limitations in its systems, or associated degradations or interruptions of service or failures to fulfill its commitments to users, have in the past led to, and may in the future lead to, outcomes including damage to its 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 HotPlay’s business and financial results.

~~HotPlay’s business partners may be unable to honor their obligations to HotPlay.~~

HotPlay relies on various business partners, including third-party service providers, vendors, licensing partners, development partners, and licensees in many areas of its business. Their actions may put HotPlay’s business and our reputation and brand at risk. For example, HotPlay may have disputes with ~~its~~ ~~business partners that may impact~~ ~~its~~ business and/or financial results. In many cases, HotPlay’s 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 the failure of the third parties to adequately maintain or update their services and technologies, could result in a disruption to HotPlay’s 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 HotPlay’s partners and they may not be able to continue honoring their obligations to HotPlay or could cease their arrangements with HotPlay. Alternative arrangements and services may not be available to HotPlay on commercially reasonable terms or HotPlay may experience business interruptions upon a transition to an alternative partner or vendor. If HotPlay loses one or more significant business partners, its business could be harmed and its financial results could be materially affected.

~~The products or services HotPlay releases may contain defects, bugs, or errors.~~

HotPlay’s products and services are extremely complex software programs and are difficult to develop and distribute. HotPlay has quality controls in place to detect defects, bugs, or other errors in its products and services before they are released. Nonetheless, these quality controls are subject to human error, overriding, and resource or technical constraints. In addition, the effectiveness of its quality controls and preventative measures may be negatively affected by the distribution of its workforce resulting from the COVID-19 pandemic. As such, these quality controls and preventative measures may not be effective in detecting all defects, bugs, or errors in HotPlay’s products and services before they have been released into the marketplace. In such an event, the technological reliability and stability of HotPlay’s products and services could be below its standards and the standards of its players, and its reputation, brand, and sales could be adversely affected. In addition, HotPlay 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 HotPlay’s business and operating results.

~~Competition within, and to, the interactive entertainment industry is intense, and competitors may succeed in reducing HotPlay’s sales.~~

HotPlay competes with other publishers of interactive entertainment software, both within and outside the United States. HotPlay’s competitors include very large corporations with significantly greater financial, marketing, and product development resources than it has. Its larger competitors may be able to leverage their greater financial, technical, personnel, and other resources to provide larger budgets for development and marketing and make higher offers to licensors and developers for commercially desirable properties, as well as adopt more aggressive pricing policies to develop more commercially successful video game products than HotPlay does. In addition, competitors with large portfolios and popular games typically have greater influence with platform providers, retailers, distributors, and other customers who may, in turn, provide more favorable support to those competitors’ games.

Additionally, HotPlay competes with other forms of entertainment and leisure activities. As HotPlay’s business continues to expand in complexity and scope, it have increased exposure to additional competitors, including those with access to large existing user bases and control over distribution channels. Further, it is difficult to predict and prepare for rapid changes in consumer demand that could materially alter public preferences for different forms of entertainment and leisure activities. Failure to adequately identify and adapt to these competitive pressures could negatively impact HotPlay’s business.

~~The importance of mobile gaming to HotPlay’s business exposes HotPlay to increased competition.~~

HotPlay has seen, and expects 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. HotPlay competes, or may compete, with a vast number of small companies and individuals who are able to create and launch casual games and other content using relatively limited resources and with relatively limited start-up time or expertise. Competition for the attention of consumers on mobile devices is intense, as the number of applications on mobile devices has been increasing dramatically, which, in turn, has required increased marketing to garner consumer awareness and attention. This increased competition has negatively impacted, and is expected to continue to negatively impact, HotPlay’s business.

~~If the use of mobile devices as game platforms and the proliferation of mobile devices generally do not increase, HotPlay’s business could be adversely affected.~~

The number of people using mobile Internet-enabled devices has increased dramatically over time and we expect that this trend will continue. However, the mobile market, particularly the market for mobile games, may not grow in the way we anticipate. HotPlay’s future success is substantially dependent upon the continued growth of the market for mobile games. In addition, HotPlay does not currently offer games on all mobile devices. If the mobile devices on which HotPlay’s games are available decline in popularity or become obsolete faster than anticipated, they could experience a decline in revenue and may not achieve the anticipated return on development efforts. Any such declines in the growth of the mobile market or in the use of mobile devices for games could harm HotPlay’s business, financial condition or results of operations.

~~Companies and governmental agencies may restrict access to platforms, mobile applications or the Internet generally, which could lead to the loss or slower growth of HotPlay’s player base.~~

HotPlay’s game players generally need to access the Internet and in particular platforms such as the Apple App Store, the Google Play Store, Facebook, Snapchat or our website to play games. Companies and governmental agencies could block access to any platform, website, mobile applications or the Internet generally for a number of reasons such as security or confidentiality concerns or regulatory reasons, or they may adopt policies that prohibit employees from accessing Apple, Google, Facebook and our website or any social platform. If companies or governmental entities block or limit such or otherwise adopt policies restricting players from playing HotPlay’s games, HotPlay’s business could be negatively impacted and could lead to the loss or slower growth of its player base.

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

HotPlay is subject to a variety of laws and regulations in the United States and abroad that involve matters central to HotPlay’s businesses, 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, protection of minors, consumer protection, telecommunications, product liability, 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 HotPlay’s activities in certain jurisdictions, or other actions that it may take may subject it 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 industry in which HotPlay operates, and may be interpreted and applied inconsistently from country to country and inconsistently with HotPlay’s current policies and practices. Proposed or new legislation and regulations could also significantly affect HotPlay’s businesses. 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 HotPlay’s businesses, including fines or demands or orders that it modify or cease existing business practices.

~~HotPlay may be subject to risks arising from Thailand’s Personal Data Protection Act.~~

All entities established in Thailand and any entity established outside of Thailand which collects, uses, discloses or transfers personal data of individuals in Thailand is subject to Thailand’s Personal Data Protection Act (the “~~PDPA~~”). Although the effective date of certain provisions of the PDPA have been extended to May 31, 2021, much of the PDPA is currently effective. Any information that may be used to directly or indirectly identify a natural person is considered “~~personal data.” The PDPA also protects “sensitive personal data~~” such as racial or ethnic origin, political opinions, religious beliefs, sexual orientation, criminal records, health data, genetic or biological data. The PDPA requires that an entity must obtain consent prior to or at the time of gathering or processing personal information and individuals are allowed to object to the use, disclosure or collection of their personal information. Failure to comply with the PDPA could result in civil penalties with punitive damages, administrative fines and criminal penalties. Any failure to comply with the PDPA, whether or intentional or not, could have an adverse consequence on ~~HotPlay’s business, financial condition and results of operations~~.

There have been no sales of unregistered securities during the three months ended May 31, ~~2021~~2022, and from the period from ~~April~~June 1, ~~2021~~2022, to the filing date of this report, which have not previously been disclosed in our periodic reports or a Current Report on Form ~~8-K, except as disclosed below:~~

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.

~~As previously disclosed under~~ ~~Item 1.01~~ ~~of the Company’s~~ ~~Current Report on Form 8-K~~ ~~filed by the Company with the Commission on June 11, 2021:~~

~~In advance of the closing of the HotPlay Share Exchange, on May 20, 2021, the Company entered into a Master Development Agreement with HotPlay (the “Development Agreement~~”), pursuant to which the Company engaged HotPlay to develop a series of casual games, integrated with HotPlay’s in-game advertising, to be used by the Company in its planned game publishing platform. The Company made a payment of $900,000 to HotPlay as a retainer in connection with the entry into the Development Agreement, and agreed that the services provided by HotPlay under the Development Agreement would be billed at $4,500 per 160 man hours per month. The Development Agreement has a term of two years, subject to early termination rights in the event of a breach of the agreement by the non-breaching party.

~~Also on May 20, 2021, the Company and HotPlay entered into an amendment to a prior Master Development and Licensing Agreement entered into between the parties on March 17, 2021 (the “March 2021 Development Agreement”), which provided for the Company’s license of the “HotNow Platform~~” from HotPlay, and the engagement of HotPlay to develop a travel app, and provided for a $400,000 license fee and a $100,000 retainer fee, which were paid to HotPlay. The March 2021 Development Agreement required the Company to make an additional $600,000 upfront development payment under the agreement, which payment was subsequently made. The Company agreed that the services provided by HotPlay under the March 2021 Development Agreement would be billed at $4,500 per 160 man hours per month. The March 2021 Development Agreement has a term of two years, subject to early termination rights in the event of a breach of the agreement by the non-breaching party.

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	For the three months ended
	May 31, 2022			May 31, 2021
	(Unaudited)			(Unaudited)
Revenue
Interest and financial services	$	466,551		$	—
Total revenue		466,551			—

Cost of Revenue
Interest and financial services		102,967			—
Total Cost of Revenue		102,967			—
Gross Profit		363,584			—
Operating Expenses
General and administrative		2,303,055			137,909
Salaries and benefits		1,429,444			178,126
Technology and development		279,606			55,794
Stock-based compensation		432,641			—
Selling and promotions expense		28,542			27,138
Depreciation and amortization		396,770			134,758
Total operating expenses		4,870,058			533,725
Operating Loss		(4,506,474	)		(533,725	)
Other Income/ (Expense)
Valuation loss, net		(4,534	)		—
Interest expense		(165,025	)		(40,958	)
Foreign exchange loss		—			(1,289	)
Other income		72,293			77
Total other income/(expense)		(97,266	)		(42,170	)
Net loss before tax from continuing operations	$	(4,603,740	)	$	(575,895	)
Estimated corporate taxes		—			—
Net Loss after tax from continuing operations:		(4,603,740	)		(575,895	)
Net Loss after tax from discontinued operations:		(808,246	)		—
Net Loss after tax from continuing operations:		(4,603,740	)		(575,895	)
Share of loss from non-controlling interest		144,890			178,768
Net loss from continuing operations attributable to parent	$	(4,458,850	)	$	(397,127	)
Net Loss after tax from discontinued operation:		(808,246	)		—
Share of profit from non-controlling interest		(418,286	)		—
Net loss from discontinued operation attributable to parent	$	(1,226,532	)	$	—
Net loss attributable to parent		(5,685,382	)		(397,127	)

Other Comprehensive (loss) income
Foreign currency translation loss from continuing operations		(201,534	)		(52,023	)
Foreign currency translation loss from discontinued operations		(746,581	)		—
Total other comprehensive (loss)		(948,115	)		(52,023	)
Comprehensive Loss		(6,360,101	)		(627,918	)

Currency translation allocated to:
Equity holders of the Company		(528,116	)		(25,491	)
Non-controlling interests of the subsidiaries		(419,999	)		(26,532	)
Total foreign currency translation		(948,115	)		(52,023	)

Total comprehensive loss attributable to:
Equity holders of the Company		(6,213,498	)		(422,618	)
Non-controlling interests of the subsidiaries		(146,603	)		(205,300	)
Total comprehensive loss		(6,360,101	)		(627,918	)

Weighted average number of common shares outstanding
Basic		109,508,246			62,400,000
Diluted		109,508,246			62,400,000

Basic net (loss) per share from continuing operations:	$	(0.04	)	$	(0.01	)
Basic net (loss) per share from discontinued operations:	$	(0.01	)	$	—
Total basic net (loss) per share	$	(0.05	)	$	(0.01	)

Diluted net (loss) per share from continuing operations:	$	(0.04	)	$	(0.01	)
Diluted net (loss) per share from discontinued operations:	$	(0.01	)	$	—
Total diluted net (loss) per share	$	(0.05	)	$	(0.01	)

	For the three months ended
	May 31,			May 31,
	2021 (Unaudited)			2020 (Unaudited)
Revenues
Travel revenues	$	10,734		$	7,874
Gross revenues		10,734			7,874

Cost of revenues		(9,828	)		(5,527	)
Gross profit		906			2,347

Operating expenses
General and administrative		2,265,484			312,117
Salaries and benefits		918,302			492,076
Technology and development		217,490			159,814
Stock-based compensation		107,238			62,583
Selling and promotions expense		356,216			73,205
Depreciation and Amortization		591,663			105,316
Total operating expenses		4,456,393			1,205,111

Operating loss		(4,455,487	)		(1,202,764	)

Other income (expense)
Valuation (loss), net		(2,841,871	)		(341,933	)
Interest expense		(272,589	)		(79,063	)
Realized gain/(loss) on sale of unconsolidated affiliates		18,897			(513,312	)
Other income, net		49,314			88,125
Total other (expense)		(3,046,249	)		(846,183	)

Net (loss)	$	(7,501,736	)	$	(2,048,947	)
Share of non-controlling interest		33,822			—
Net (loss) attributable to parent	$	(7,467,914	)	$	(2,048,947	)

Other comprehensive (loss) income:
Foreign currency translation gain	$	48,831		$	—
Total other comprehensive gain	$	48,831		$	—
Comprehensive loss	$	(7,419,083	)	$	(2,048,947	)

Weighted average number of common shares outstanding
Basic		19,986,671			13,246,446
Diluted		19,986,671			13,246,446

Basic net (loss) per share	$	(0.37	)	$	(0.15	)
					—
Diluted net (loss) per share	$	(0.37	)	$	(0.15	)

	Common Stock Shares		Common Stock Amount		Treasury Stock		Additional Paid-in Capital		Accumulated Deficit			Accumulated Other Comprehensive income			Total stockholders’ equity			Non-controlling interest			Stockholders’ equity
Balances, March 1, 2021		62,400,000		624		—		11,599,357		(1,200,309	)		10,221			10,409,893			(390,277	)		10,019,616
Net loss for the period		—		—		—		—		(397,127	)		—			(397,127	)		(178,768	)		(575,895	)
Foreign currency translation adjustment		—		—		—		—		—			(25,491	)		(25,491	)		(26,532	)		(52,023	)
Balances, May 31, 2021		62,400,000	$	624		—	$	11,599,357	$	(1,597,436	)	$	(15,270	)	$	9,987,275		$	(595,577	)	$	9,391,698

	For the Three Months Ended
	May 31,			May 31,
	2021			2020
Cash flows from operating activities:
Net loss	$	(7,467,914	)	$	(2,048,947	)

Adjustments to reconcile net loss to net cash from (used in) operating activities:
Amortization and depreciation		170,565			105,316
Amortization of debt issuance costs		1,004,659			—
Stock based compensation		709,213			116,528
Valuation loss, net		2,808,186			341,933
Realized (gain) loss on marketable securities		(28,028	)		513,312
Share of minority interest		33,822			—
Shares issued for services		280,001			—
(Gain) loss on currency translation		(4,881	)		—
Changes in operating assets and liabilities:
Increase/(decrease) in prepaid expenses and other current assets		5,437			200,686
(Decrease)/increase in accounts payable and accrued expenses		(60,520	)		(129,395	)
(Decrease)/increase in other current liabilities		311,574			(112,108	)

Net cash used in operating activities	$	(2,237,886	)	$	(1,012,674	)

Cash flows from investing activities:
Payment related to Intangible assets		—			(151,000	)
Purchase of furniture, fixture, and equipment		(19,995	)		(1,352	)
Payment related to website development costs		(3,081,251	)		(82,516	)
Proceeds from sale of investment in unconsolidated affiliates		275,584			87,316
Payment for investment in unconsolidated affiliates		(456,659	)		—
Payment for advance for investments		(17,147,856	)		—

Net cash used for investing activities	$	(20,430,177	)	$	(147,552	)

Cash flows from financing activities:
Proceeds from issuance of common stock		8,509,713			—
Proceeds from exercise of warrants		423,800			—
Proceeds from Paycheck Protection Program loan		—			176,534
Proceeds from notes payable		11,978,623			895,000
Payments on notes payable		(2,938,409	)		—
Payments for debt issuance costs		(2,335,000	)		—
Payment on promissory notes - related party		—			(175,000	)
Proceeds from convertible notes payable - related parties		11,914,246			175,000

Net cash provided by financing activities	$	27,552,973		$	1,071,534

Net increase (decrease) in cash	$	4,884,910		$	(88,692	)

Cash at beginning of period	$	2,640,988		$	162,506

Cash at end of period	$	7,525,898		$	73,814
Supplemental disclosure:
Cash paid for interest	$	272,589		$	79,063

Supplemental disclosure of non-cash investing and financing activity:
Dividends related		1,102,068
Shares issued for investments		930,458			—

	For the Three Months Ended
	May 31, 2022			May 31, 2021
Cash flows from operating activities:
Net loss from operations	$	(5,685,382	)	$	(397,127	)

Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization		396,770			134,758
Valuation loss, net		4,534			—
Stock based compensation		432,641			—
Provision from employee benefits		2,301			—
Share of non-controlling interest		273,396			(178,768	)
Gain on currency translation		(948,115	)		(8,968	)

Changes in operating assets and liabilities:
Amounts due from related parties		19,068			(25,037	)
Advance payment to a related party		—			(149,533	)
Amounts due to related party		6,625			58,765
Unbilled receivable		(2,440	)		—
Loans receivable		(3,500,112	)		—
Prepaid expenses and other current assets		(397,638	)		(28,350	)
Security deposits		(254,388	)		—
Operating lease liabilities		237,443			—
Accounts payable & accrued expenses		2,262,456			(40,863	)
Deferred revenue - related party		110,907			—
Other current liabilities		4,684			(190	)
Other Liabilities - Customer Deposits		11,498,819			—
Assets held for sale		(1,384,539	)		—
Liabilities held for sale		(2,627,075	)		—
Cash provided by (used in) operating activities	$	449,955		$	(635,313	)

Cash flows from investing activities:
Short term investment		(762	)		—
Convertible notes receivable - related party		—			(12,000,000	)
Additions of intangible assets - related party		(66,766	)		(479,865	)
Additions of intangible assets		(3,799,983	)		(21,930	)
Purchase of computer, furniture, and equipment		(64,581	)		(14,019	)
Proceeds from disposal of computer, furniture, and equipment		68,323			—
Cash used in investing activities	$	(3,863,769	)	$	(12,515,814	)

Cash flows from financing activities:
Proceeds from convertible notes payable – related party		—			14,000,000
Repayment of notes payable - related party		(966,314	)		(223,937	)
Proceeds from promissory notes		463,902			—
Payments on promissory notes		(296,250	)		—
Cash (used in) provided by financing activities	$	(798,662	)	$	13,776,063

Cash and Cash Equivalents

Net change during the period		(4,212,476	)		624,936

Balance, beginning of period – continuing operation		4,282,110			444,920
Balance, beginning of period – discontinued operation		2,336,841			—
Balance, beginning of period		6,618,951			444,920

Balance, end of period from continued operation	$	2,406,475		$	1,069,856

Supplemental disclosures of cash flow information
Cash paid for interest	$	214,504		$	23,286

NON-CASH TRANSACTIONS
Share issuances for asset acquisition – Fighter Base and Token IQ		1,210,417			—
Share issuances for consulting and employee compensation		432,641			—
Reclassification of advance payment to intangible asset – GoGame		1,250,000			—

	As of
	May 31, 2021 (Unaudited)			February 28, 2021 (Audited)
Assets
Current Assets
Cash	$	7,525,898		$	2,640,988
Prepaid expenses and other current assets		2,036,918			1,864,279
Advance for investments		17,147,856			—
Investment in unconsolidated affiliates - short-term		42,227			264,884
Security Deposits		238,704			258,296
Notes Receivable, related parties		7,657,024			7,657,024
Other Receivable, related parties		165,613			216,647
Total current assets		34,814,240			12,902,118

Non-current Assets
Investment in unconsolidated affiliates – long term		3,016,143			4,912,111
Website development costs and intangible assets, net		10,571,306			8,081,718
Fixed Assets, net		121,568			101,573
Operating lease right-of-use asset		1,257,820			—
Total assets	$	49,781,077		$	25,997,520

Liabilities and Stockholders’ Equity
Current Liabilities
Line of Credit and Notes Payable, net	$	9,096,237		$	1,807,462
Convertible Notes Payable, related parties		16,016,314			3,000,000
Accounts payable and accrued expenses		1,732,719			1,793,239
Other current liabilities		95,948			234,372
Operating lease liability		1,257,820			—
Total current liabilities		28,199,038			6,835,073

Total liabilities		28,199,038			6,835,073

Commitments and Contingencies

Stockholders’ equity
Series A Preferred Stock, $0.01 par value; 3,000,000 authorized; no shares issued and outstanding at May 31, 2021 and February 28, 2021, respectively		—			—
Series B Preferred Stock, $0.00001 par value; 10,000,000 authorized; 10,000,000 and 10,000,000 shares issued and outstanding at May 31, 2021 and February 28, 2021, respectively		100			100
Series C Preferred Stock, $0.00001 par value; 3,828,500 authorized; 3,828,500 and 3,828,500 shares issued and outstanding at May 31, 2021 and February 28, 2021, respectively		38			38
Common stock, $0.00001 par value; 500,000,000 shares authorized; 23,454,203 and 18,765,839 shares issued and outstanding at May 31, 2021 and February 28, 2021, respectively		234			187
Additional paid-in-capital		162,387,810			151,427,224
Currency Translation		48,831			53,712
Accumulated deficit		(140,910,961	)		(132,340,979	)
Stockholders’ equity attributable to parent		21,526,052			19,140,282
Non-Controlling Interest		55,987			22,165
Total stockholders’ equity	$	21,582,039		$	19,162,447
Total liabilities and total stockholders’ equity	$	49,781,077		$	25,997,520

	Preferred Stock B				Preferred Stock C				Common Stock				Additional Paid-in		Accumulated			Accumulated Other			Stockholders			Non-controlling		Total Stockholders'
	Shares		Amount		Shares		Amount		Shares		Amount		Capital		Deficit			Comprehensive Income			Equity			Interest		Equity
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
Common stock issued for cash		—	$	—		—	$	—		3,714,500	$	37		8,509,675	$	—		$	—		$	8,509,712		$	—	$	8,509,712
Warrants Exercised										218,114	$	2		423,798				$	—		$	423,800		$	—	$	423,800
Shares issued for stock compensation		—	$	—		—	$	—		223,750	$	2		709,210	$	—		$	—		$	709,212		$	—	$	709,212
Shares issued for Investor Relations		—	$	—		—	$	—		35,000	$	1		107,449	$	—		$	—		$	107,450		$	—	$	107,450
Shares issued for consulting services										112,000	$	1		279,999							$	280,000		$	—	$	280,000
Shares issued for business acquistion		—	$	—		—	$	—		150,000	$	2		450,000	$	—		$	—		$	450,002		$	—	$	450,002
Shares issued for Investment in Affiliate		—	$	—		—	$	—		235,000	$	2		480,455	$	—		$	—		$	480,457		$	—	$	480,457
Currency translation													$	—				$	(4,881	)	$	(4,881	)	$	—	$	(4,881	)
Dividends													$	—	$	(1,102,068	)				$	(1,102,068	)	$	—	$	(1,102,068	)
Net (loss)		—	$	—		—	$	—		—	$	—	$	—	$	(7,467,914	)				$	(7,467,914	)	$	33,822	$	(7,434,092	)
Balances, May 31, 2021		10,000,000	$	100		3,828,500	$	38		23,454,203	$	234	$	162,387,810	$	(140,910,961	)	$	48,831		$	21,526,052		$	55,987	$	21,582,039

	(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 2023 fiscal year, which is expected to result in generating revenues; and

	(v)	the Company is tightening its spending on expenses, which is expected to help in the cost reduction of the operations.

Operating lease Right-to-Use asset		May 31, 2022				February 28, 2022
Net Carrying Value		$	1,554,144			$	1,894,654

	May 31, 2022		May 31, 2021
NextFinTech
Interest income	$	379,691		—
Financial services		86,860		—
Total revenue	$	466,551		—

Name of related parties		Relationship 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 that a Co-CEO of the Company is a shareholder of
Magnolia Quality Development Corporation Limited (“MQDC”)		A significant shareholder of TREG, which is a significant shareholder of the Company
Nithinan Boonyawattanapisut		Co-CEO of the Company, and a shareholder of the Company, RATC, HotNow, Axion and TAI
Immediate Family Member		Immediate family member with executive officer of the Company

Payment of marketing expense:
Immediate Family Member	$	57,600
Payment of consulting expense:
Immediate Family Member	$	110,000
Payment of salary expense:
Immediate Family Member	$	32,160
Payment of contract cost :
HotNow (Thailand) Company Limited	$	85,440
General and admin expense:
HotNow (Thailand) Company Limited	$	32,553
Interest expense of loan from:
Magnolia Quality Development Corporation Limited	$	10,078
Tree Roots Entertainment Group Company Limited	$	7,278

	Nature	May 31, 2022		February 28, 2022
Amounts due from related parties:
HotNow (Thailand) Company Limited	Other receivable		100,000		155,425
Total			100,000		155,425

Amounts due to related parties:
Magnolia Quality Development Corporation Limited	Accrued interest expense		6,619		3,169
Tree Roots Entertainment Group	Accrued interest expense		35,191		32,700
HotNow (Thailand) Company Limited	Accrued expense		1,105		393
Axion Interactive Inc.	Other payable		1,770		1,770
Red Anchor Trading Corporation	Account payable		—		395,782
Total		$	44,685		433,814

Notes payable:
Magnolia Quality Development Corporation Limited			440,038		459,024
Tree Roots Entertainment Group			293,358		306,016
Immediate Family Member			—		966,314
Total			733,396		1,731,354

Payment for convertible notes receivable to:
NextPlay Technologies, Inc	$	12,000,000
Cash receipt for convertible Notes Payable from:
Tree Roots Entertainment Group Co., Ltd	$	12,000,000
NextPlay Technologies, Inc	$	2,000,000
Advance payment for asset acquisition to:
HotNow (Thailand) Company Limited	$	149,533
Repayment of Short-term Loan:
Tree Roots Entertainment Group Company Limited	$	223,937
Interest expense of loan from:
Magnolia Quality Development Corporation Limited	$	10,886
Tree Roots Entertainment Group Co., Ltd	$	43,716
Rental expense:
Tree Roots Entertainment Group Co., Ltd	$	27,449
Payment of loan interest:
Magnolia Quality Development Corporation Limited	$	10,531
Tree Roots Entertainment Group Co., Ltd	$	12,755
Payment of contract cost:
HotNow (Thailand) Company Limited	$	489,147

	Useful Life	Cost		Impairment		Accumulated Amortization		Net Carrying Value
Software development costs	3.0 - 5.0 years	$	575,133		200,000	$	2,180	$	372,953
Trademark & License	1.0 - 20.0 years		5,696,166		—		1,186,761		4,509,405
CIP – Software development			10,991,804		—		—		10,991,804
		$	17,263,103		200,000	$	1,188,941	$	15,874,162

	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		2,290,728		—			964,327		1,326,401		—
Software development costs	3.0 years		3,238,695		—			158,424		3,080,271		—
Trademark & License	Indefinite		2,222,786		—			—		2,222,786		—
CIP – IDS Project	3.0 years		5,196,543		2,070,000			—		3,126,543		09/01/2021
Software licenses	3.0 years		362,930		—			10,838		352,092		—
CIP – Not in service			463,213		—			—		463,213		09/01/2021
		$	16,010,097		2,070,000		$	3,368,791		10,571,306

As of May 31, 2021	Amortization Expense
2022	$	1,914,732
2023		2,805,285
2024		2,652,791
2025		975,712
2026		—
	$	8,348,520

As of May 31, 2022	Amortization Expense
2023	$	1,178,826
2024		1,632,045
2025		1,538,160
2026		533,326
2027		—
	$	4,882,358

Description	As of May 31, 2022			As of February 28, 2022
Streeterville Capital, LLC	$	4,517,639		$	4,053,736
Business Brokers, LLC		678,750			725,000
Total		5,196,389			4,778,736
Less: Debt issuance cost		(356,250	)		(315,265	)
Line of Credit and Notes Payable, net		4,840,139			4,463,471
Less: Current portion of Line of Credit and Notes Payable		(4,840,139	)		(4,463,471	)
Line of Credit and Notes Payable Long Term, net	$	—		$	—

	i)	The October 2021 Note: principal balance of $1,752,639, accrued interest of $104,708 and accumulated unamortized debt issuance cost of $106,250.

	●	~~In the quarter ended May 31, 2021, the Company issued 147,000~~
	-	250,000 shares of common stock for consulting ~~and investor relations~~ services, ~~rendered~~ valued at ~~$387,450.~~$ 306,001.

	●	~~In the quarter ended May 31, 2021, the Company issued 385,000~~
	-	2,916,667 shares of common stock for ~~related business and investment acquisition activities~~assets purchased, valued at ~~$930,458.~~

	Warrant			Weighted Average Exercise
Outstanding, February 28, 2021		3,045,921		$	2.50
Warrants granted		161,900		$	2.00
Warrants exercised/forfeited/expired		(225,400	)	$	(2.00	)
Outstanding, May 31, 2021		2,982,421		$	2.45
Common stock issuable upon exercise of warrants		2,982,421		$	2.45

	Warrants		Weighted Average Exercise Price

Outstanding, February 28, 2022		14,811,679	$	2.05
Outstanding, May 31, 2022		14,811,679	$	2.05
Common stock issuable upon exercise of warrants		14,811,679	$	2.05
Warrant granted/exercised/forfeited/expired		—		—

	Current		Long Term
	FYE 2022		FYE 2023		Totals
Office Leases	$	56,320	$	209,629	$	265,949
Insurance and Other		55,917		55,917		111,833
Totals	$	112,237	$	265,546	$	377,783

For the three months ended May 31, 2021	NextTrip			Longroot			Total
Sales	$	10,734		$	—		$	10,734
Net loss	$	(7,332,556	)	$	(169,180	)	$	(7,501,736	)

For the three months ended May 31, 2020	NextTrip			Longroot		Total
Sales	$	7,874		$	—	$	7,874
Net loss	$	(2,048,947	)	$	—	$	(2,048,947	)

For the three months ended May 31, 2022	NextFinTech			NextMedia			Totals
Revenue	$	466,551		$	—		$	466,551
Cost of Revenue	$	102,967		$	—		$	102,967
Gross Profit	$	363,584		$	—		$	363,584

Operating expenses:
General and administrative	$	841,604		$	141,206		$	982,810
Salaries and benefits		850,797			258,852			1,109,649
Depreciation and Amortization		25,366			146,598			171,964
Others		136,037			45,325			181,362
Total operating expenses	$	1,853,804		$	591,981		$	2,445,785

Operating Loss	$	(1,490,220	)	$	(591,981	)	$	(2,082,201	)


Other Income/(Expense)	$	35,228		$	(10,100	)	$	25,128

Net (loss) before tax – reportable segment	$	(1,454,992	)	$	(602,081	)	$	(2,057,073	)

Unallocated distribution and administrative expenses and finance cost:
- General and administrative							$	1,320,245
- Salaries and benefits								319,795
- Other operating expenses								784,233
- Interest expense								145,385
- Other income								(22,992	)
							$	2,546,667
Net (loss) before tax from continuing operation							$	(4,603,740	)

Segment assets		49,744,076			19,838,787			69,582,863
Unallocated assets								8,388,861
Assets from discontinued operation								28,514,136
Total asset								106,485,860

For the three months ended May 31, 2021	HotPlay
Revenue	$	—
Cost of Revenue	$	—
Gross Profit	$	—

Long-lived Assets	2021		2020
United States	$	12,389,132	$	13,095,402
Non-United States		2,577,705		—
	$	14,966,837	$	13,095,402

Revenue		For three months ended May 31, 2022				For three months ended May 31, 2021
United States and Puerto Rico		$	466,551			$	—

	As of May 31, 2022
	Reinhart /Zappware			NextTrip			Total
Goodwill
Carrying amount	$	16,818,456		$	5,191,082			22,009,538
Accumulated translation adjustment		(983,733	)		—			(983,733	)
Allowance for impairment loss		(5,040,460	)		(5,191,082	)		(10,231,542	)
Goodwill, net	$	10,794,263		$	—		$	10,794,263

Intangible assets
Net book value	$	7,525,588		$	3,965,122			11,490,710
Allowance for impairment loss		—			(1,681,874	)		(1,681,874	)
Intangible assets, net	$	7,525,588		$	2,283,248		$	9,808,836

	As of February 28, 2022
	Reinhart /Zappware			NextTrip			Total
Goodwill
Carrying amount	$	16,818,456		$	5,191,082		$	22,009,538
Accumulated translation adjustment		(844,568	)		—			(844,568	)
Allowance for impairment loss		(4,977,023	)		(5,191,082	)		(10,168,105	)
Goodwill, net	$	10,996,865		$	—		$	10,996,865

Intangible assets
Net book value	$	6,468,491		$	2,525,142			8,993,633
Allowance for impairment loss		—			(1,215,746	)		(1,215,746	)
Intangible assets, net	$	6,468,491		$	1,309,396		$	7,777,887

	Reinhart/Zappware
	May 31, 2022		February 28, 2022
Assets
Cash and cash equivalent	$	1,194,230		2,185,719
Accounts receivable, net		1,073,312		839,612
Unbilled receivables		1,819,470		3,275,229
Other receivable		—		3,251
Work in progress		647,743		691,863
Prepaid expenses and other current assets		194,514		123,084
Intangible assets, net		7,525,588		—
Goodwill, net		10,794,263		—
Computers, furniture and equipment, net		131,766		—
Operating lease right-of-use asset		1,935,764		—
Security deposits		59,105		—
Total current assets held for sale		25,375,755		7,118,758

Intangible assets, net		—		6,468,491
Goodwill, net		—		10,996,865
Computers, furniture and equipment, net		—		149,791
Operating lease right-of-use asset		—		2,067,942
Security deposits		—		71,401
Total non current assets held for sale		—		19,754,490

Total assets	$	25,375,755		26,873,248

Liabilities
Line of credit and notes payable, net	$	3,030,849		2,878,274
Accounts payable and accrued expenses		3,138,538		3,557,080
Other current liabilities		264,906		264,905
Deferred revenue		1,007,698		2,040,787
Current portion of operating lease liability		1,935,765		493,622
Total current liabilities held for sale		9,377,755		9,234,668

Line of Credit and Notes Payable Long Term, net		—		270,808
Operating lease liability, net of current portion		—		1,574,320
Other long term liability		—		28,761
Total non current liabilities held for sale		—		1,873,889

Total liabilities	$	9,377,755		11,108,557

Net asset	$	15,998,000		15,764,691

	Total assets and liabilities held for sale
	May 31, 2022		February 28, 2022
Assets
Cash and cash equivalent		1,730,659		2,336,841
Accounts receivable, net		1,077,168		840,668
Unbilled receivables		1,819,470		3,275,229
Other receivable		204,891		4,448
Work in progress		647,743		691,863
Prepaid expenses and other current assets		260,741		183,945
Intangible assets, net		9,808,836		—
Goodwill, net		10,794,263		—
Computers, furniture and equipment, net		160,496		—
Operating lease right-of-use asset		1,935,764		—
Security deposits		74,105		—
Total current assets held for sale		28,514,136		7,332,994

Intangible assets, net		—		7,777,887
Goodwill, net		—		10,996,865
Computers, furniture and equipment, net		—		191,462
Operating lease right-of-use asset		—		2,067,942
Security deposits		—		86,401
Total non current assets held for sale		—		21,120,557

Total assets		28,514,136		28,453,551

Liabilities
Line of credit and notes payable, net		3,030,849		2,878,274
Accounts payable and accrued expenses		3,588,375		3,872,675
Other current liabilities		264,906		264,905
Deferred revenue		1,155,242		2,198,577
Operating lease liability		1,935,765		493,622
Total current liabilities held for sale		9,975,136		9,708,053

Line of Credit and Notes Payable Long Term, net		—		270,808
Operating lease liability, net of current portion		—		1,574,320
Other long term liability		—		28,761
Total non current liabilities held for sale		—		1,873,889
Total liabilities		9,975,136		11,581,942

Net asset		18,539,000		16,871,609