NextTrip, Inc. Q4 FY2022 earnings call

• Transitioning to a software-only suite focused on digital quality and 3D printing. - Market showing signs of opening with demand for connected digital quality solutions. - Partners and customers validating the roadmap, including partnerships with OEMs like EOS, SLM, and software companies like Materialise and Dendrite. - Headcount reduced significantly, with operating expenses adjusted; cash burn rate improved. - Targeted launch of software-only product suite in Q2 2023 covering machine, process, and part health, with Machine Health launched in beta testing in late 2022.

For fiscal 2022, revenue totaled $630,000 compared to $1.7 million in 2021. Q4 2022 revenue was $154,000 vs. $350,000 in Q4 2021. Full-year 2022 gross profit was $280,000 vs. $1.1 million in 2021; Q4 2022 gross profit was $117,000 vs. $200,000 in Q4 2021. Gross margin in 2022 was 44% vs. 66% in 2021. Total employee headcount at Dec 31, 2022 was 19, down from 33 in 2021.

• Targeted launch of software-only product suite in Q2 2023. - Require more capital to continue operations and are evaluating strategic alternatives like investment, acquisition, etc. - Burn rate reduced to under $600,000 per month in early 2023 but still need additional capital.

• Macro-economic uncertainty impacting valuations and market dynamics. - Cash runway impact on ability to achieve objectives and potential strategic next steps. - Dependence on successful launch of software-only products and market adoption.

Q: Can you talk a little bit about whether or not the current elevated level of macro uncertainty is having any impact on the conversations you're having with either OEMs or potential customers?

A: Yes, macroeconomic environments have changed valuations and market focus, but have also increased collaboration in the market with OEMs opening platforms and software companies connecting solutions.

Q: The growth in the backlog, is that coming from new customers or expansion of current customer relationships?

A: Majority of sales are new sales transitioning to subscription model, with backlog tracking with subscription plan and software launch to level out revenue.

Q: Whether or not you guys think you have maybe a little more room to cut on the OpEx side if you have to and then get even tighter than they are currently?

A: Definitely always have options, focused on running lean to grow while launching software platform in Q2.

Q: Dig a little bit more into the market activity that you're seeing. Is it mainly just the partners within the market active with you guys now developing the partnerships? Or is it the customer adoption you're really starting to see?

A: It's both, with macro environment creating open environment, end users focusing on profitability and quality as a big driver, and attachment to OEM APIs being a key opportunity.

Q: Expand a little bit on Dimension post processing, what you're doing exactly with polymers?

A: Entered SLS space from monitoring perspective, building software tools to connect quality data through post processing to end part, keeping digital quality stream in one user experience.