| Stockholders’ Equity | NOTE
8 - Stockholders’ Equity Common
Stock On
March 8, 2024, at a special meeting of stockholders, the Company received approval to increase its authorized shares of common stock
from 1,200,000 to
250,000,000 (the
“Increase in Authorized”). On March 11, 2024, the Company filed a Certificate of Amendment to its amended and restated articles
of incorporation, as amended, with the Secretary of State of the State of Nevada, pursuant to which, effective as of 12:01 a.m. Pacific
time on March 13, 2024, the Increase in Authorized was implemented. In
the first quarter of 2024, the Company issued 100,000
shares of common stock upon conversion
of 100,000
shares of Series G Convertible Preferred
Stock, 117,000
shares of common stock upon conversion
of 117,000
shares of Series H Convertible Preferred
Stock, and 192,502
shares of common stock upon conversion
of 192,502
shares of Series I Convertible Preferred
Stock. In
the second quarter of 2024, the Company issued 42,709
shares of common stock to a service provider
as partial compensation for development work related to Compass.TV, the Company’s Free-Ad Supported TV (“FAST”) channel. Preferred
Stock Under
our amended and restated articles of incorporation, as amended (“Articles”), our board of directors has the authority, without
further action by stockholders, to designate one or more series of preferred stock and to fix the voting powers, designations, preferences,
limitations, restrictions and relative rights granted to or imposed upon the preferred stock, including dividend rights, conversion rights,
voting rights, rights and terms of redemption, liquidation preference and sinking fund terms, any or all of which may be preferential
to or greater than the rights of the common stock. Our
board of directors may authorize the issuance of preferred stock with voting or conversion rights that could adversely affect the voting
power or other rights of the holders of the common stock. The issuance of preferred stock, while providing flexibility in connection
with possible acquisitions and other corporate purposes, could, among other things, have the effect of delaying, deferring or preventing
a change in our control and may adversely affect the market price of the common stock and the voting and other rights of the holders
of common stock. The
Company is authorized to issue 10,000,000 shares of preferred stock, $ 0.001 par value. An aggregate of 93,295 and 472,996 shares of preferred stock were issued
and outstanding at August 31, 2024 and February 29, 2024, respectively. Series
E Convertible Preferred Stock Under
the Certificate of Designations for the Series E Preferred Stock, the Series E Preferred Shares have an initial stated value of $ 1,500
per share (the “Stated Value”).
Dividends at the initial rate of 9 %
per annum will accrue and, on a monthly basis, shall be payable in kind by the increase of the Stated Value of the Series E Preferred
Stock by said amount. The holders of the Series E Preferred Shares have the right at any time to convert all or a portion of the Series
E Preferred Shares (including, without limitation, accrued and unpaid dividends and make-whole dividends through the third anniversary
of the closing date) into shares of the Company’s common stock at an initial conversion rate determined by dividing the Conversion
Amount by the Conversion Price ($ 0.13
above the consolidated closing bid price
for the trading day prior to the execution of the relates stock purchase agreement). The Conversion Amount is the sum of the Stated Value
of the Series E Preferred Shares then being converted plus any other unpaid amounts payable with respect to the Series E Preferred Shares
being converted, plus the “Make Whole Amount” (the amount of any dividends that, but for the conversion, would have accrued
at the dividend rate for the period through the third anniversary of the initial issuance date). The Conversion Rate is also subject
to adjustment for stock splits, dividends recapitalizations and similar events. At
August 31, 2024, 316 shares of the issued Series E Convertible
Preferred Stock were outstanding, which if converted as of August 31, 2024, including the make-whole dividends, would have resulted in
the issuance of 3,259
shares of common stock. Series
F Convertible Preferred Stock On
January 4, 2024, the Company filed a Certificate of Designation of Series F Convertible Preferred Stock (the “Series F Certificate
of Designation”) with the Secretary of State of the State of Nevada, designating 5,843,993
shares of the Company’s preferred
stock as Series F Convertible Preferred Stock, par value $ 0.001
per share (the “Series F Preferred”).
The Series F Preferred was designated by the Company in connection with its acquisition of NextTrip, and, in the event that the Company
does not have sufficient shares of common stock available to fulfill its obligations pursuant to the Share Exchange Agreement governing
the terms of the acquisition, shares of Series F Preferred shall be issued to the previous equity holders of NextTrip in lieu of shares
of Company common stock. The
terms and conditions set forth in the Series F Certificate of Designation are summarized below: Ranking.
Dividends.
Voting Conversion Liquidation At
August 31, 2024, no
shares of the Series F Convertible Preferred
Stock were outstanding. Series
G Convertible Preferred Stock On
January 26, 2024, the Company filed a Certificate of Designation of Series G Convertible Preferred Stock (the “Series G Certificate
of Designation”) with the Secretary of State of the State of Nevada, designating 100,000
shares of the Company’s preferred
stock as Series G Preferred Stock, par value $ 0.001
per share (the “Series G Preferred”). The
terms and conditions set forth in the Series G Certificate of Designation are summarized below: Ranking.
Dividends.
Voting Conversion Liquidation Redemption
Right The
Company shall have the right to redeem up to 50% of the Series G Preferred Stock for an aggregate price of $1.00 in accordance with the
terms of the Perpetual License Agreement . At
August 31, 2024, no
shares of the issued Series G Convertible
Preferred Stock were outstanding. Series
H Convertible Preferred Stock On
January 26, 2024, the Company filed a Certificate of Designation of Series H Convertible Preferred Stock (the “Series H Certificate
of Designation”) with the Secretary of State of the State of Nevada, designating 150,000
shares of the Company’s preferred
stock as Series H Preferred Stock, par value $ 0.001
per share (the “Series H Preferred”). The
terms and conditions set forth in the Series H Certificate of Designation are summarized below: Ranking.
Dividends.
Voting Conversion Liquidation At
August 31, 2024, 33,000 shares of the issued Series H Convertible
Preferred Stock were outstanding, which if converted as of August 31, 2024, would have resulted in the issuance of 33,000
shares of common stock. Series
I Convertible Preferred Stock On
February 22, 2024, the Company filed a Certificate of Designation of Series I Convertible Preferred Stock (the “Series I Certificate
of Designation”) with the Secretary of State of the State of Nevada, designating 331,124
shares of the Company’s preferred
stock as Series I Convertible Preferred Stock, par value $ 0.001
per share (the “Series I Preferred”). The
terms and conditions set forth in the Series I Certificate of Designation are summarized below: Ranking.
Dividends.
Voting Conversion Liquidation On
August 15, 2024, the Company entered into a securities purchase agreement with an investor for the sale of 4,967
shares of Series I Convertible Preferred
Stock, at $ 3.02
per share, resulting in gross proceeds
to the Company of $ 15,000 . On
August 31, 2024, the Company entered into a securities purchase agreement with an investor for the sale of 24,834
shares of Series I Convertible Preferred
Stock at $ 3.02
per share, resulting in gross proceeds
to the Company of $ 75,000 . At
August 31, 2024, 59,979 shares of the issued Series I Convertible
Preferred Stock were outstanding, which if converted as of August 31, 2024, would have resulted in the issuance of 59,979
shares of common stock. Stock
Options On
December 28, 2023, at the Annual Meeting of Stockholders of the Company, the Company’s stockholders approved the adoption of the
NextTrip 2023 Equity Incentive Plan (the “2023 Plan”). 7,000,000
shares of common stock have been reserved
for issuance under the 2023 Plan., and as of August 31, 2024, all of such shares are available for issuance. The
Company’s 2013 Equity Incentive Plan expired on March 15, 2023. As such, no new grants may be made under the 2013 Plan. At August
31, 2024, there were 78,877
shares of common stock reserved for issuance
upon exercise of outstanding stock options issued under the 2013 Plan prior to its expiration. There
were no issuances of stock options for the six
months ended August 31, 2024 or August 31, 2023. The
Company generally grants stock options to employees and directors at exercise prices equal to the fair market value of the Company’s
common stock on the grant date, but not less than 100% of the fair market value. Stock options are typically granted throughout the year
and generally vest over a period from one to three years of service and expire five years from the grant date, unless otherwise specified.
The Company recognizes compensation expense for the fair value of the stock options over the vesting period for each stock option award. Total
stock-based compensation expense included in the statements of operations for the three and six months ended August 31, 2024 was $ 13,841
and $ 30,235 ,
respectively, all of which was related to stock options. There was no stock-based compensation included in the
statements of operations for the three or six months ended August 31, 2023. Option
activity for the six months ended August 31, 2024 and the year ended February 29, 2024 was as follows: Schedule
of Stock Option Activity
Options Weighted Average Exercise Price
($) Weighted Average Remaining Contractual Life
(Yrs.) Aggregate Intrinsic Value
($)
Options outstanding at February 28, 2023 - - - -
Options assumed pursuant to reverse acquisition 86,642 61.43 2.68 -
Granted - - - -
Exercised - - - -
Forfeited or cancelled (1,342 ) 120.87 - -
Options outstanding at February 29, 2024 85,300 60.50 2.52 -
Granted - - - -
Exercised - - - -
Forfeited or cancelled (6,423 ) 87.06 - -
Options outstanding August 31, 2024 78,877 58.19 2.03 -
Options expected to vest in the future as of August 31, 2024 1,432 32.25 3.10 -
Options exercisable at August 31, 2024 77,445 58.67 2.01 -
Options vested, exercisable, and options expected to vest at August 31, 2024 78,877 58.19 2.03 - The
aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the market price of
our common stock for those awards that have an exercise price below the market price of our common stock. At August 31, 2024, no option
had an exercise price below the $ 2.59
closing price of our common stock as reported
on the Nasdaq Capital Market. At
August 31, 2024, there was $ 16,139
of unrecognized stock-based compensation
expense related to unvested stock options with a weighted average remaining recognition period of 0.74
years. Stock
Appreciation Rights The
purposes of the 2020 Stock Appreciation Rights Plan (the “SAR Plan”) are to: (i) enable the Company to attract and retain
the types of employees, consultants, and directors (collectively, “Service Providers”) who will contribute to the Company’s
long-range success; (ii) provide incentives that align the interests of Service Providers with those of the stockholders of the Company;
and (iii) promote the success of the Company’s business. The SAR Plan provides for incentive awards only in the form of stock appreciation
rights payable in cash (“SARs”) and no shares of common stock are reserved or will be issued pursuant to the SAR Plan. SARs
may be granted to any Service Provider. A SAR is the right to receive an amount equal to the Spread with respect to a share of the Company’s
common stock (“Share”) upon the exercise of the SAR. The “Spread” is the difference between the exercise price
per share specified in a SAR agreement on the date of grant and the fair market value per share on the date of exercise of the SAR. The
exercise price per share will not be less than 100% of the fair market value of a share of common stock on the date of grant of the SAR.
The administrator of the SAR Plan will have the authority to, among other things, prescribe the terms and conditions of each SAR, including,
without limitation, the exercise price and vesting provisions, and to specify the provisions of the SAR Agreement relating to such grant. The
Company did not grant any SAR’s during the six months ended August 31, 2024 or August 31, 2023. The
Company recognizes compensation expense and a corresponding liability for the fair value of the SARs over the vesting period for each
SAR award. The SARs are revalued at each reporting date in accordance with ASC 718 “Compensation-Stock Compensation,” and
any changes in fair value are reflected in the Statement of Operations as of the applicable reporting date. SARs
activity for the six months ended August 31, 2024 and the year ended February 29, 2024 was as follows: Schedule
of Stock Appreciation Rights Activity
SARs Weighted Average Exercise Price
($) Weighted Average Remaining Contractual
Life (Yrs.) Aggregate Intrinsic Value
($)
SARs outstanding at February 28, 2023 - - - -
SARs assumed pursuant to reverse acquisition 40,390 44.77 2.99 -
Exercised - - - -
Forfeited or cancelled - - - -
SARs outstanding at February 29, 2024 40,390 44.77 2.99 -
Granted - - - -
Exercised - - - -
Forfeited or cancelled (167 ) 37.40 - -
SARs outstanding August 31, 2024 40,223 44.80 2.49 -
SARs expected to vest in the future as of August 31, 2024 5,645 29.37 2.84 -
SARs exercisable at August 31, 2024 34,578 47.31 2.43 -
SARs vested, exercisable, and SARs expected to vest at August 31, 2024 40,223 44.80 2.49 - The
aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the market price of
our common stock for those awards that have an exercise price below the market price of our common stock. At August 31, 2024, no SAR
had an exercise price below the $ 2.59
closing price of our common stock as reported
on the Nasdaq Capital Market. At
August 31, 2024, there was $ 943
of unrecognized stock-based compensation
expense related to unvested SARs with a weighted average remaining recognition period of 0.64
years. Warrants Warrant
activity for the six months ended August 31, 2024 and the year ended February 29, 2024 was as follows: Schedule
of Warranty Activity
Warrants Weighted Average Exercise Price
($) Weighted Average Remaining Contractual Life
(Yrs.)
Warrants outstanding at February 28, 2023 - - -
Warrants assumed pursuant to reverse acquisition 217,593 21.01 1.86
Granted 268,572 3.02 2.17
Exercised - - -
Forfeited or cancelled - - -
Warrants outstanding at February 29, 2024 486,165 9.94 1.96
Granted - - -
Exercised - - -
Forfeited or cancelled (2,102 ) 322.00 -
Warrants outstanding at August 31, 2024 484,063 8.58 1.46 | NOTE
16 – Stockholders’ Equity Common
Stock The
Company has 1,200,000 936,430 83,371 0.001 On
September 22, 2023, we effected a 1-for-20 reverse stock split 40,197 The
effects of the reverse stock split have been retroactively reflected in all periods presented. Fiscal
Year Ended February 29, 2024 In
September and October 2023, the Company sold 72,721 128,887 364,555 772,468 On
December 29, 2023, the Company acquired 100 156,007 19.99 5,843,993 Of
the 156,007 52,818 15,481 4,337 83,371 Deferred
Compensation During
the fiscal years ended February 29, 2024 and February 28, 2023, the Company did not issue any shares of common stock to employees. Preferred
Stock Under
our articles of incorporation, our board of directors has the authority, without further action by stockholders, to designate one or
more series of preferred stock and to fix the voting powers, designations, preferences, limitations, restrictions and relative rights
granted to or imposed upon the preferred stock, including dividend rights, conversion rights, voting rights, rights and terms of redemption,
liquidation preference and sinking fund terms, any or all of which may be preferential to or greater than the rights of the common stock. Our
board of directors may authorize the issuance of preferred stock with voting or conversion rights that could adversely affect the voting
power or other rights of the holders of the common stock. The issuance of preferred stock, while providing flexibility in connection
with possible acquisitions and other corporate purposes, could, among other things, have the effect of delaying, deferring or preventing
a change in our control and may adversely affect the market price of the common stock and the voting and other rights of the holders
of common stock. The
Company is authorized to issue 10,000,000 0.001 472,996 0 Series
E Convertible Preferred Stock Under
the Certificate of Designations for the Series E Preferred Stock, the Series E Preferred Shares have an initial stated value of $ 1,500 9 0.13 At
February 29, 2024, 316 3,155 Series
F Convertible Preferred Stock On
January 4, 2024, the Company filed a Certificate of Designation of Series F Convertible Preferred Stock (the “Certificate of Designation”)
with the Secretary of State of the State of Nevada, designating 5,843,993 0.001 The
terms and conditions set forth in the Certificate of Designation are summarized below: Ranking .
Dividends .
Voting Conversion Liquidation At
February 29, 2024, no Series
G Convertible Preferred Stock On
January 26, 2024, the Company filed a Certificate of Designation of Series G Convertible Preferred Stock (the “Series G Certificate
of Designation”) with the Secretary of State of the State of Nevada, designating 100,000 0.001 The
terms and conditions set forth in the Series G Certificate of Designation are summarized below: Ranking.
Dividends.
Voting Conversion Liquidation Redemption
Right The Company shall have the right to redeem up to 50% of the Preferred Stock for an aggregate price of $1.00 in accordance
with the terms of the Perpetual License Agreement At
February 29, 2024, all 100,000 100,000 Series
H Convertible Preferred Stock On
January 26, 2024, the Company filed a Certificate of Designation of Series H Convertible Preferred Stock (the “Series H Certificate
of Designation”) with the Secretary of State of the State of Nevada, designating 150,000 0.001 The
terms and conditions set forth in the Series H Certificate of Designation are summarized below: Ranking.
Dividends.
Voting Conversion Liquidation At
February 29, 2024, 150,000 150,000 Series
I Convertible Preferred Stock On
February 22, 2024, the Company filed a Certificate of Designation of Series I Convertible Preferred Stock (the “Series I Certificate
of Designation”) with the Secretary of State of the State of Nevada, designating 331,124 0.001 The
terms and conditions set forth in the Series I Certificate of Designation are summarized below: Ranking.
Dividends.
Voting Conversion Liquidation At
February 29, 2024, 222,680 222,680 Outstanding
Options As
of February 29, 2024, we had outstanding options under our 2013 Equity Incentive Plan to purchase an aggregate of 85,300 60.50 On
December 28, 2023, our stockholders approved our 2023 Equity Incentive Plan which has reserved for issuance 7,000,000 0 Stock
Options On
December 28, 2023, at the Annual Meeting of Stockholders of the Company, the Company’s stockholders approved the adoption of the
NextTrip 2023 Equity Incentive Plan. 7,000,000 During
fiscal year 2024, the Company did not grant any options. In fiscal year 2024, 6,914 116,512 85,300 82,800 81,849 No The
Company generally grants stock options to employees, consultants and directors at exercise prices equal to the fair market value of the
Company’s stock on the dates of grant. Stock options are typically granted throughout the year and generally vest over three years
of service and expire five years from the date of the award, unless otherwise specified. The Company recognizes compensation expense
for the fair value of the stock options over the requisite service period for each stock option award. Upon
closing of the reverse acquisition of Sigma on December 29, 2023, the Company assumed options to purchase up to 86,402 1,342 Total
employee share-based compensation expense for the year ended February 29, 2024, was $ 116,512 To
estimate the value of an award, the Company uses the Black-Scholes option-pricing model. This model requires inputs such as expected
life, expected volatility and risk-free interest rate. The forfeiture rate also impacts the amount of aggregate compensation. These inputs
are subjective and generally require significant analysis and judgment to develop. While estimates of expected life, volatility and forfeiture
rate are derived primarily from the Company’s historical data, the risk-free rate is based on the yield available on U.S. Treasury
constant maturity rates with similar terms to the expected term of the stock option awards. The fair value of outstanding share-based
awards was estimated using the Black-Scholes model with the following weighted-average assumptions for the outstanding options assumed
at February 29, 2024: Schedule of Share Based Payments Award Stock Options Valuation Assumptions Assumptions:
2024
Dividend yield 0.00 %
Risk-free interest rate 0.19 4.05 %
Expected volatility 100.2 122.8 %
Expected life (in years) 5 Option
activity for the year ended February 29, 2024 was as follows: Schedule of Stock Option Activity
Weighted Average Weighted Average
Exercise Remaining Aggregate
Price Contractual Intrinsic
Options ($) Life (Yrs.) Value ($)
Options outstanding at February 28, 2023 - - -
Options assumed pursuant to reverse acquisition 86,642 61.43 2.68 -
Exercised - - - -
Forfeited or cancelled (1,342 ) 120.87 - -
Options outstanding at February 29, 2024 85,300 60.50 2.52 -
Options expected to vest in the future as of February 29, 2024 3,451 33.25 3.54 -
Options exercisable at February 29, 2024 81,849 61.64 2.48 -
Options vested, exercisable, and options expected to vest at February 29, 2024 85,300 60.50 2.52 - The
aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the quoted price of
our common stock for those awards that have an exercise price below the $ 2.99 2.99 At
February 29, 2024, there was $ 52,615 0.97 Stock
Appreciation Rights The
purposes of the 2020 Stock Appreciation Rights Plan are to: (i) enable the Company to attract and retain the types of employees, consultants,
and directors (collectively, “Service Providers”) who will contribute to the Company’s long-range success; (ii) provide
incentives that align the interests of Service Providers with those of the shareholders of the Company; and (iii) promote the success
of the Company’s business. The Plan provides for incentive awards that are only made in the form of stock appreciation rights payable
in cash (“SARs”). No shares of common stock were reserved in connection with the adoption of the Plan since no shares will
be issued pursuant to the Plan. SARs
may be granted to any Service Provider. A SAR is the right to receive an amount equal to the Spread with respect to a share of the Company’s
common stock (“Share”) upon the exercise of the SAR. The “Spread” is the difference between the exercise price
per share specified in a SAR agreement on the date of grant and the fair market value per share on the date of exercise of the SAR. The
exercise price per share will not be less than 100% of the fair market value of a Share on the date of grant of the SAR. The administrator
of the Plan will have the authority to, among other things, prescribe the terms and conditions of each SAR, including, without limitation,
the exercise price and medium of payment and vesting provisions, and to specify the provisions of the SAR Agreement relating to such
grant. Upon
closing of the reverse acquisition of Sigma on December 29, 2023, the Company assumed 40,390 none no The
Company recognizes compensation expense and a corresponding liability for the fair value of the SARs over the requisite service period
for each SAR award. The SAR’s are revalued at each reporting date in accordance with ASC 718 “Compensation-Stock Compensation”,
and any changes in fair value are reflected in income as of the applicable reporting date. The
fair value of outstanding SAR awards was estimated using the Black-Scholes model with the following weighted-average assumptions for
the twelve months ended February 29, 2024: Assumptions: Schedule of Share Based Payments Award Stock Options Valuation Assumptions
2024
Dividend yield 0.00 %
Risk-free interest rate 0.22 2.79 %
Expected volatility 108.7 122.8 %
Expected life (in years) 5 SARs
activity for the year ended February 29, 2024 was as follows: Schedule of Stock Option Activity
Weighted Average Weighted Average
Exercise Remaining Aggregate
Price Contractual Intrinsic
SARs ($) Life (Yrs.) Value ($)
SARs outstanding at February 28, 2023 - - - -
SARs assumed pursuant to reverse acquisition 40,390 44.77 2.99 -
Exercised - - - -
Forfeited or cancelled - - - -
SARs outstanding February 29, 2024 40,390 44.77 2.99 -
SARs expected to vest in the future as of February 29, 2024 6,886 35.25 3.23 -
SARs exercisable at February 29, 2024 33,504 46.72 2.93 -
SARs vested, exercisable, and options expected to vest at February 29, 2024 40,390 44.77 2.99 - The
aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the quoted price of
our common stock for those awards that have an exercise price below the $ 2.99 2.99 For the year ended February 29, 2024, $ 10,107 79,978 1.08 Warrants At
February 29, 2024, the Company had outstanding warrants to purchase a total of 486,165 3.02 350.00 expire between March 15, 2024 and January 25, 2028 Warrant
activity for the year ended February 29, 2024 was as follows: Schedule of Warranty Activity
Weighted Average Weighted Average
Exercise Remaining
Price Contractual
Warrants ($) Life (Yrs.)
Warrants outstanding at February 28, 2023 - - -
Warrants assumed pursuant to reverse acquisition 217,593 21.01 1.86
Granted 268,572 3.02 2.17
Exercised - - -
Forfeited or cancelled - - -
Warrants outstanding at February 29, 2024 486,165 9.94 1.96 |
