NextTrip (NTRP) risk factors, FY2024 10-K

Risks Related to Our Business

1. 01Our revenue is derived from the global travel industry, and a prolonged or substantial decrease in global travel, particularly air travel, could adversely affect our operating results
2. 02As of February 29, 2024, we had $5,088,842 in total assets, $1,960,813 in total liabilities, negative working capital of $245,005 and a total accumulated deficit of $24,151,139. We had a net loss of $7,339,276 for the fiscal year ended February 29, 2024 and $5,033,496 for the fiscal year ended February 28, 2023
3. 03We are not profitable and may never become profitable

Risks relating to its indebtedness include

1. 04If distributors are unable to drive customers to our websites and/or we are unable to drive visitors to our websites, from search engines or otherwise, this could negatively impact transactions on the websites of our distributors as well as our own websites and consequently cause our travel revenue to decrease
2. 05We have contracted for products in markets throughout the world, in jurisdictions which have various regulatory and taxation requirements that can affect our travel division operations or regulate the activity of travel suppliers
3. 06If we are not able to maintain and enhance our NextTrip brand and the brands associated with each of our websites, our reputation and business may suffer
4. 07Our long-term success depends, in part, on our ability to expand traveler bases outside of the United States and, as a result, our business is susceptible to risks associated with international operations
5. 08The market in which we participate is highly competitive, and we may be unable to compete successfully with our current or future competitors
6. 09We are exposed to fluctuations in currency exchange rates
7. 10If we fail to protect confidential information against security breaches, or if distributors or travelers are reluctant to use our online marketplace because of privacy or security concerns, we might face additional costs, and activity on our websites could decline
8. 11Cyber-attacks and system vulnerabilities could lead to sustained service outages, data loss, reduced revenue, increased costs, liability claims, or harm to our competitive position
9. 12If our systems cannot cope with the level of demand required to service our consumers and accommodations, we could experience unanticipated disruptions in service, slower response times, decreased customer service and customer satisfaction, and delays in the introduction of new services
10. 13Loss or material modification of our credit card acceptance privileges could have a material adverse effect on our business and operating results
11. 14We currently rely on a small number of third-party service providers to host and deliver a significant portion of our services, and any interruptions or delays in services from these third parties could impair the delivery of our services and harm our business
12. 15If we do not adequately protect our intellectual property, our ability to compete could be impaired
13. 16We 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
14. 17If the businesses and/or assets that we have acquired or invested in do not perform as expected or we are unable to effectively integrate acquired businesses, our operating results and prospects could be harmed
15. 18Failure to obtain adequate insurance coverage could put us at risk for uninsured losses
16. 19We are dependent on key personnel, and the loss of any of these individuals could harm our business
17. 20Our bylaws contain provisions for indemnifying our officers and directors
18. 21Our operating costs could be significantly higher than we expect, and this could reduce our future profitability

Risks Related to Our Securities

1. 22The price of our securities is subject to volatility related or unrelated to our operations, which could result in substantial losses for our stockholders
2. 23We could be subject to securities class action litigation
3. 24Historically, there has been a limited trading market in our common stock, and you may therefore have difficulty selling your securities at a price that you determine is satisfactory
4. 25There is no assurance that we will satisfy the continued listing requirements of The Nasdaq Capital Market
5. 26Nasdaq further informed the Company that if the Company fails to show compliance upon filing its next periodic report with the SEC and Nasdaq, the Company may be subject to delisting
6. 27Neither of the Notices have an immediate effect on the listing of the Company’s common stock on the Nasdaq Capital Market, and, therefore, the Company’s listing remains fully effective
7. 28You may experience additional dilution as a result of future equity offerings
8. 29We have broad discretion in the use of the net proceeds of our securities offerings and may not use them effectively
9. 30Our outstanding warrants may result in further dilution to our stockholders
10. 31We do not intend to pay dividends on our common stock, and your ability to achieve a return on your investment will depend on appreciation in the market price of our securities
11. 32If securities or industry analysts do not publish research or reports about us, or if they issue adverse or misleading opinions regarding us or our securities, the market price of our securities and their trading volume could decline
12. 33Sales of a substantial number of shares of our common stock in the public market could cause our stock price to fall
13. 34We will incur significant costs to ensure compliance with U.S. and Nasdaq reporting and corporate governance requirements
14. 35If we fail to maintain effective internal control over financial reporting, the market price of our securities may be adversely affected
15. 36Provisions in our articles of incorporation and bylaws could discourage a takeover that stockholders may consider favorable and may lead to entrenchment of management
16. 37We could issue one or more additional series of shares of preferred stock with the effect of diluting existing stockholders and impairing their voting and other rights