NTRP

Business Context and Reporting Period

Company: NextTrip, Inc. (NTRP)
Filing Type: Form 8-K (Current Report)
Date of Report: February 6, 2025 (Event Date); Signed February 11, 2025
Principal Event: Entry into a Material Definitive Agreement and Completion of Acquisition of Assets involving FSA Travel, LLC ("FSA").

Key Financial Metrics and Transaction Details

This filing details a strategic acquisition rather than periodic financial performance. Key transaction metrics include:

• Initial Acquisition Stake: 49% ownership of FSA (9,608 membership units).
• Initial Consideration: $500,000 cash plus 161,291 shares of newly designated Series O Nonvoting Convertible Preferred Stock.
• Option to Acquire Remaining Stake: Option to purchase the remaining 51% of FSA within 60 days of the Initial Closing Date (February 10, 2025).
• Option Consideration: $500,000 cash plus 161,291 shares of Series O Preferred Stock.
• Contingent Milestone Payments: Up to four milestones, each valued at $100,000 cash and 32,258 shares of Series O Preferred, tied to specific booking volumes and technical integration.
• Capital Raise Condition: Exercise of the option to acquire the remaining 51% is contingent upon the Company completing a $2,000,000 capital raise.

Note: The filing does not provide specific revenue, profit, cash flow, or debt metrics for NextTrip, Inc. or FSA Travel, LLC.

Material Changes and Transaction Structure

The Company has entered a phased acquisition structure for FSA Travel, LLC:

1. Initial Closing (Feb 10, 2025): NextTrip acquired a 49% stake. Key personnel (John McMahon and Courtney May) became employees of NextTrip.
2. Final Closing Option: NextTrip holds an option to acquire the remaining 51% stake. This is subject to:
• Continued employment of key FSA management.
• Completion of a $2,000,000 capital raise by NextTrip.
• Continued operation of FSA by existing management until closing.
3. Right of First Refusal: If the option is not exercised or the Final Closing fails (absent default by FSA Members), FSA retains a right of first refusal on any sale of the Initial Interests.

Guidance, Outlook, and Risks

Management Commentary and Outlook: The transaction is designed to integrate FSA's travel booking capabilities. The Company has issued press releases regarding the execution and consummation of the Initial Closing. Future growth is partially contingent on the successful completion of the $2,000,000 capital raise required to exercise the option for full ownership.

Risks and Contingencies:

• Capital Raise Risk: The full acquisition of FSA is conditional on raising $2,000,000. Failure to raise this capital may result in NextTrip retaining only a 49% stake.
• Conversion Restrictions: Series O Preferred shares cannot convert to common stock until approved by stockholders in accordance with Nasdaq listing rules.
• Forward-Looking Statements: The filing contains forward-looking statements regarding future performance and integration, which are subject to risks and uncertainties that could cause actual results to differ materially.
• Unregistered Securities: The Series O Preferred shares were issued under Section 4(a)(2) and Regulation D exemptions, constituting "restricted securities."

Investor Verification Checklist

• Verify the status of the $2,000,000 capital raise required to exercise the option for the remaining 51% of FSA.
• Confirm the timeline for stockholder approval required to convert Series O Preferred shares into common stock.
• Review the specific milestones for contingent payments (booking volumes and technical access) to assess potential future cash and equity outflows.
• Monitor the continued employment of John McMahon and Courtney May, as their departure could impact the option exercise conditions.
• Check for any subsequent filings regarding the "Final Closing" date (within 60 days of Feb 10, 2025).