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<font style="font-weight: bold"><font style="font-family: Times New Roman; font-size: 13px">UNITED
STATES</font></font></div>
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<font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">
SECURITIES AND EXCHANGE COMMISSION</font></div>
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<font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">
Washington, D.C.&#xA0;&#xA0;20549</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
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<font style="font-family: Times New Roman; font-size: 13px">FORM
20-F</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
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<font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman">
&#xA0;</font>(Mark One)</font></div>
<div style="display: table">
<div style="display: table-row">
<div style="display: table-cell; width: 48px"><font style="font-family: Times New Roman; font-size: 13px">[
]&#xA0;&#xA0;&#xA0;&#xA0;<br></font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">Registration
Statement Pursuant To Section 12(b) or (g) of the Securities
Exchange Act of 1934</font></div>
</div>
</div>
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<font style="font-family: Times New Roman; font-size: 13px;">&#xA0;</font></div>
<div style="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">OR</font></div>
<div style="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px;">&#xA0;</font></div>
<div style="display: table">
<div style="display: table-row">
<div style="display: table-cell; width: 48px"><font style="font-family: Times New Roman; font-size: 13px">[ X
]&#xA0;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">Annual Report
Pursuant To Section 13 or 15(d) of the Securities Exchange Act of
1934 <font style="font-family: Times New Roman; font-size: 13px">for the fiscal year
ended December 31, 2019.</font></font></div>
</div>
</div>
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<font style="font-family: Times New Roman; font-size: 13px"><br></font></div>
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<font style="font-family: Times New Roman; font-size: 13px">OR</font></div>
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<font style="font-family: Times New Roman; font-size: 13px;">&#xA0;</font></div>
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<div style="display: table-row">
<div style="display: table-cell; width: 48px"><font style="font-family: Times New Roman; font-size: 13px">[
]&#xA0;&#xA0;&#xA0;&#xA0;<br></font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">Transition Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934</font></div>
</div>
</div>
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<font style="font-family: Times New Roman; font-size: 13px;">&#xA0;</font></div>
<div style="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px;">
<font style="font-family: Times New Roman; font-size: 13px">For the
transition period from __ to __</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">OR</font></div>
<div style="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px;">&#xA0;</font></div>
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<div style="display: table-row">
<div style="display: table-cell; width: 48px"><font style="font-family: Times New Roman; font-size: 13px">[
]&#xA0;&#xA0;&#xA0;&#xA0;<br></font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">Shell Company
Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934</font></div>
</div>
</div>
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<font style="font-family: Times New Roman; font-size: 13px;">&#xA0;</font></div>
<div style="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px;">
<font style="font-family: Times New Roman; font-size: 13px">Date of
event requiring this shell company report:</font></div>
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<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
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<font style="font-family: Times New Roman; font-size: 13px">Commission
file number 000-24027</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">NXT
Energy Solutions Inc.</font></div>
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<font style="font-family: Times New Roman; font-size: 13px">(Exact
Name of Registrant as Specified in its Charter)</font></div>
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<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Alberta,
Canada</font></div>
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<font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">
(Jurisdiction of incorporation or organization)</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Suite
302, 3320 - 17<font style="font-size: 70%; vertical-align: top">th</font> Avenue
SW</font></div>
<div style="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">
Calgary, Alberta, Canada, T3E 0B4</font></div>
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<font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">
(Address of principal executive offices)</font></div>
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<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Eugene
Woychyshyn</font></div>
<div style="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Phone:
403-206-0805</font></div>
<div style="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Facsimile:
403-264-6442</font></div>
<div style="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Suite
302, 3320 - 17<font style="font-size: 70%; vertical-align: top">th</font> Avenue
SW</font></div>
<div style="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">
Calgary, Alberta, Canada, T3E 0B4</font></div>
<div style="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">
(Name, Telephone, E-mail and/or Facsimile number and address of
Company Contact Person)</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Securities
registered or to be registered pursuant to Section 12(b) of the
Act: None</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Securities
registered or to be registered pursuant to Section 12(g) of the
Act:</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Common
Shares</font></div>
<div style="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">(Title
of Class)</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Securities
for which there is a reporting obligation pursuant to Section 15(d)
of the Act: None</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Indicate
the number of outstanding shares of each of the issuer&#x2019;s
classes of capital or common stock as of the close of the period
covered by the annual report:</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">64,406,891
common shares outstanding as of December 31, 2019 (64,406,891
common shares outstanding as of May 5, 2020)</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
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<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">Indicate by check
mark if the registrant is a well-known seasoned issuer, as defined
in Rule 405 of the Securities Act.</font></div>
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">&#xA0;</font></div>
<div style="text-align: left; margin-left: 0px; margin-right: 0px;">
<table cellpadding="0" cellspacing="0" style="text-align: left; font-family: inherit; font-size: inherit;width: 100%;">
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<td style="vertical-align: top; width: 3%">
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">Yes</font></div>
</td>
<td style="vertical-align: top; width: 1%">
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">___</font></div>
</td>
<td style="vertical-align: top; width: 16%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">&#xA0;</font></div>
</td>
<td style="vertical-align: top; width: 31%">
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">No</font></div>
</td>
<td style="vertical-align: top; width: 48%">
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">X</font></div>
</td>
</tr></table>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">If this report is
an annual or transition report, indicate by check mark if the
registrant is not required to file reports pursuant to Section 13
or 15(d) of the Securities Exchange Act of 1934</font></div>
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">&#xA0;</font></div>
<div style="text-align: left; margin-left: 0px; margin-right: 0px;">
<table cellpadding="0" cellspacing="0" style="text-align: left; font-family: inherit; font-size: inherit;width: 100%;">
<tr>
<td style="vertical-align: top; width: 3%">
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">Yes</font></div>
</td>
<td style="vertical-align: top; width: 1%">
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">___</font></div>
</td>
<td style="vertical-align: top; width: 16%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">&#xA0;</font></div>
</td>
<td style="vertical-align: top; width: 31%">
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">No</font></div>
</td>
<td style="vertical-align: top; width: 48%">
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">X</font></div>
</td>
</tr></table>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">Note-Checking the
box above will not relieve any registrant required to file reports
pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934 from their obligations under those Sections.</font></div>
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">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 for 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.</font></div>
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">&#xA0;</font></div>
<div style="text-align: left; margin-left: 0px; margin-right: 0px;">
<table cellpadding="0" cellspacing="0" style="text-align: left; font-family: inherit; font-size: inherit;width: 100%;">
<tr>
<td style="vertical-align: top; width: 3%">
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">Yes</font></div>
</td>
<td style="vertical-align: top; width: 1%">
<div style="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">X</font></div>
</td>
<td style="vertical-align: top; width: 16%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">&#xA0;</font></div>
</td>
<td style="vertical-align: top; width: 31%">
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">No</font></div>
</td>
<td style="vertical-align: top; width: 48%">
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">____&#xA0;
&#xA0;&#xA0;<br></font></div>
</td>
</tr></table>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">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 (&#xA7;232.405 of this chapter) during
the preceding 12 months (or for such shorter period that the
registrant was required to submit such files).</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">&#xA0;</font></div>
<div style="text-align: left; margin-left: 0px; margin-right: 0px;">
<table cellpadding="0" cellspacing="0" style="text-align: left; font-family: inherit; font-size: inherit;text-align: left; padding-top: 0px; padding-bottom: 0px; margin-left: 0px; margin-right: auto; width: 100%;">
<tr>
<td style="vertical-align: top; width: 3%">
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">Yes</font></div>
</td>
<td style="vertical-align: top; width: 1%">
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">X</font></div>
</td>
<td style="vertical-align: top; width: 16%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">&#xA0;</font></div>
</td>
<td style="vertical-align: top; width: 31%">
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">No</font></div>
</td>
<td style="vertical-align: top; width: 48%">
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">____
&#xA0;&#xA0;&#xA0;<br></font></div>
</td>
</tr></table>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">Indicate by check
mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition of
&#x201C;accelerated filer and large accelerated filer&#x201D; in Rule
12b-2 of the Exchange Act. (Check one):</font></div>
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">&#xA0;</font></div>
<div style="text-align: left; margin-left: 0px; margin-right: 0px;">
<table cellpadding="0" cellspacing="0" style="text-align: left; font-family: inherit; font-size: inherit;width: 100%;">
<tr>
<td style="vertical-align: top; width: 24%">
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">Large accelerated
filer</font></div>
</td>
<td style="vertical-align: top; width: 8%">
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">&#xA0;&#xA0;&#xA0;&#xA0;
___</font></div>
</td>
<td style="vertical-align: top; width: 6%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">&#xA0;</font></div>
</td>
<td style="vertical-align: top; width: 22%">
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">Accelerated
filer</font></div>
</td>
<td style="vertical-align: top; width: 7%">
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">&#xA0;&#xA0;&#xA0;&#xA0;
___</font></div>
</td>
<td style="vertical-align: top; width: 4%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">&#xA0;</font></div>
</td>
<td style="vertical-align: top; width: 22%">
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">Non-accelerated
filer</font></div>
</td>
<td style="vertical-align: top; width: 7%">
<div style="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">X</font></div>
</td>
</tr><tr>
<td style="vertical-align: top; width: 24%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">&#xA0;</font></div>
</td>
<td style="vertical-align: top; width: 8%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">&#xA0;</font></div>
</td>
<td style="vertical-align: top; width: 6%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">&#xA0;</font></div>
</td>
<td style="vertical-align: top; width: 22%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">&#xA0;</font></div>
</td>
<td style="vertical-align: top; width: 7%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">&#xA0;</font></div>
</td>
<td style="vertical-align: top; width: 4%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">&#xA0;</font></div>
</td>
<td style="vertical-align: top; width: 22%">
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">Emerging growth
Company</font></div>
</td>
<td style="vertical-align: top; width: 7%">
<div style="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">___</font></div>
</td>
</tr></table>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">If an emerging
growth company that prepares its financial statements in accordance
with U.S. GAAP, 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&#x2020;
provided pursuant to Section 13(a) of the Exchange Act.
___</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">&#x2020; The term
&#x201C;new or revised financial accounting standard&#x201D; refers
to any update issued by the Financial Accounting Standards Board to
its Accounting Standards Codification after April 5,
2012.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Indicate
by check mark whether the registrant has filed a report on and
attestation to its management&#x2019;s assessment of the
effectiveness of its internal control over financial reporting
under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b))
by the registered public accounting firm that prepared or issued
its audit report. ___</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Indicate
by check mark which basis of accounting the registrant has used to
prepare the financial statements included in this
filing.</font></div>
</div>
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">&#xA0;</font></div>
<div style="text-align: left; margin-left: 0px; margin-right: 0px;">
<table cellpadding="0" cellspacing="0" style="text-align: left; font-family: inherit; font-size: inherit;width: 100%;">
<tr>
<td style="vertical-align: top; width: 16%">
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">U.S.
GAAP</font></div>
</td>
<td style="vertical-align: top; width: 7%">
<div style="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">X</font></div>
</td>
<td style="vertical-align: top; width: 4%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">&#xA0;</font></div>
</td>
<td style="vertical-align: top; width: 42%">
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">International
Financial Reporting Standards as issued by the International
Accounting Standards Board</font></div>
</td>
<td style="vertical-align: top; width: 7%">
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">&#xA0;&#xA0;&#xA0;&#xA0;
___</font></div>
</td>
<td style="vertical-align: top; width: 4%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">&#xA0;</font></div>
</td>
<td style="vertical-align: top; width: 13%">
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">Other</font></div>
</td>
<td style="vertical-align: top; width: 7%">
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">&#xA0;&#xA0;&#xA0;&#xA0;
___</font></div>
</td>
</tr></table>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">If
&#x201C;Other&#x201D; has been checked in response to the previous
question, indicate by check mark which financial statement item the
registrant has elected to follow.</font></div>
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">&#xA0;</font></div>
<div style="text-align: left; margin-left: 0px; margin-right: 0px;">
<table cellpadding="0" cellspacing="0" style="text-align: left; font-family: inherit; font-size: inherit;text-align: left; padding-top: 0px; padding-bottom: 0px; margin-left: 0px; margin-right: auto; width: 100%;">
<tr>
<td style="vertical-align: top; width: 8%">
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">Item
17</font></div>
</td>
<td style="vertical-align: top; width: 3%">
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">&#xA0;&#xA0;&#xA0;&#xA0;
___</font></div>
</td>
<td style="vertical-align: top; width: 9%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">&#xA0;</font></div>
</td>
<td style="vertical-align: top; width: 41%">
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">Item
18</font></div>
</td>
<td style="vertical-align: top; width: 39%">
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">&#xA0;&#xA0;&#xA0;&#xA0;
___</font></div>
</td>
</tr></table>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">If this is an
annual report, indicate by check mark whether the registrant is a
shell company (as defined in Rule 12b-2 of the Exchange
Act)</font></div>
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">&#xA0;</font></div>
<div style="text-align: left; margin-left: 0px; margin-right: 0px;">
<table cellpadding="0" cellspacing="0" style="text-align: left; font-family: inherit; font-size: inherit;width: 100%;">
<tr>
<td style="vertical-align: top; width: 3%">
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">Yes</font></div>
</td>
<td style="vertical-align: top; width: 0%">
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">___</font></div>
</td>
<td style="vertical-align: top; width: 13%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">&#xA0;</font></div>
</td>
<td style="vertical-align: top; width: 31%">
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">No</font></div>
</td>
<td style="vertical-align: top; width: 52%">
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">X</font></div>
</td>
</tr></table>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">&#xA0;</font></div>
<div id="pgbrk" style="width: 100%; margin-left: 0px; text-indent: 0px; margin-right: 0px">
<div id="ftr">
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: right; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-style: italic; font-family: Times New Roman; font-size: 13px">
&#xA0;&#xA0;20-F for the year ended December 31, 2019</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</div>
<div id="pb" style="text-align: center; page-break-after: always; margin-left: 0px; margin-right: 0px; margin-bottom: 6px; width: 100%; height: 1px; background-color: #000000">
<!--page break--></div>
<div id="hdr">
<div style="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">
EXPLANATORY NOTE</font></div>
<div style="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px;">&#xA0;</font></div>
<div style="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">This
Annual Report on Form 20-F for the fiscal year ended December 31,
2019 is being filed pursuant to the order of the Securities and
Exchange Commission contained in SEC Release No. 34-88465, dated
March 25, 2020 (the &#x201C;Order&#x201D;). We filed a Form 6-K on
April 28, 2020, prior to the original due date of the Form 20-F,
indicating our reliance on the relief granted by the
Order.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">
TABLE OF CONTENTS</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: left; margin-left: 0px; margin-right: 0px;">
<table cellpadding="0" cellspacing="0" style="text-align: left; font-family: inherit; font-size: inherit;width: 100%;">
<tr>
<td colspan="3" style="vertical-align: bottom; width: 100%">
<div style="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">PART I</font></div>
</td>
</tr><tr style="background-color: #cceeff">
<td style="vertical-align: bottom; width: 14%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">ITEM
1.</font></div>
</td>
<td style="vertical-align: bottom; width: 77%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">IDENTITY
OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS</font></div>
</td>
<td style="vertical-align: bottom; width: 9%">
<div style="text-align: right; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">4</font></div>
</td>
</tr><tr>
<td style="vertical-align: bottom; width: 14%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">ITEM
2.</font></div>
</td>
<td style="vertical-align: bottom; width: 77%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">OFFER
STATISTICS AND EXPECTED TIMETABLE</font></div>
</td>
<td style="vertical-align: bottom; width: 9%">
<div style="text-align: right; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">4</font></div>
</td>
</tr><tr style="background-color: #cceeff">
<td style="vertical-align: bottom; width: 14%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">ITEM
3.</font></div>
</td>
<td style="vertical-align: bottom; width: 77%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">KEY
INFORMATION</font></div>
</td>
<td style="vertical-align: bottom; width: 9%">
<div style="text-align: right; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">5</font></div>
</td>
</tr><tr>
<td style="vertical-align: bottom; width: 14%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">ITEM
4.</font></div>
</td>
<td style="vertical-align: bottom; width: 77%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">INFORMATION
ON THE COMPANY</font></div>
</td>
<td style="vertical-align: bottom; width: 9%">
<div style="text-align: right; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">16</font></div>
</td>
</tr><tr style="background-color: #cceeff">
<td style="vertical-align: bottom; width: 14%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">ITEM
4A.</font></div>
</td>
<td style="vertical-align: bottom; width: 77%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">UNRESOLVED
STAFF COMMENTS</font></div>
</td>
<td style="vertical-align: bottom; width: 9%">
<div style="text-align: right; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">26</font></div>
</td>
</tr><tr>
<td style="vertical-align: bottom; width: 14%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">ITEM
5.</font></div>
</td>
<td style="vertical-align: bottom; width: 77%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">OPERATING
AND FINANCIAL REVIEW AND PROSPECTS</font></div>
</td>
<td style="vertical-align: bottom; width: 9%">
<div style="text-align: right; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">26</font></div>
</td>
</tr><tr style="background-color: #cceeff">
<td style="vertical-align: bottom; width: 14%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">ITEM
6.</font></div>
</td>
<td style="vertical-align: bottom; width: 77%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">DIRECTORS,
SENIOR MANAGEMENT AND EMPLOYEES</font></div>
</td>
<td style="vertical-align: bottom; width: 9%">
<div style="text-align: right; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">38</font></div>
</td>
</tr><tr>
<td style="vertical-align: bottom; width: 14%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">ITEM
7.</font></div>
</td>
<td style="vertical-align: bottom; width: 77%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">MAJOR
SHAREHOLDERS AND RELATED PARTY TRANSACTIONS</font></div>
</td>
<td style="vertical-align: bottom; width: 9%">
<div style="text-align: right; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">47</font></div>
</td>
</tr><tr style="background-color: #cceeff">
<td style="vertical-align: bottom; width: 14%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">ITEM
8.</font></div>
</td>
<td style="vertical-align: bottom; width: 77%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">FINANCIAL
INFORMATION</font></div>
</td>
<td style="vertical-align: bottom; width: 9%">
<div style="text-align: right; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">49</font></div>
</td>
</tr><tr>
<td style="vertical-align: bottom; width: 14%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">ITEM
9.</font></div>
</td>
<td style="vertical-align: bottom; width: 77%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">THE
OFFER AND LISTING</font></div>
</td>
<td style="vertical-align: bottom; width: 9%">
<div style="text-align: right; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">50</font></div>
</td>
</tr><tr style="background-color: #cceeff">
<td style="vertical-align: bottom; width: 14%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">ITEM
10.</font></div>
</td>
<td style="vertical-align: bottom; width: 77%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">ADDITIONAL
INFORMATION</font></div>
</td>
<td style="vertical-align: bottom; width: 9%">
<div style="text-align: right; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">50</font></div>
</td>
</tr><tr>
<td style="vertical-align: bottom; width: 14%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">ITEM
11.</font></div>
</td>
<td style="vertical-align: bottom; width: 77%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK</font></div>
</td>
<td style="vertical-align: bottom; width: 9%">
<div style="text-align: right; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">60</font></div>
</td>
</tr><tr style="background-color: #cceeff">
<td style="vertical-align: bottom; width: 14%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">ITEM
12.</font></div>
</td>
<td style="vertical-align: bottom; width: 77%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">DESCRIPTION
OF SECURITIES OTHER THAN EQUITY SECURITIES</font></div>
</td>
<td style="vertical-align: bottom; width: 9%">
<div style="text-align: right; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">60</font></div>
</td>
</tr><tr>
<td colspan="3" style="vertical-align: bottom; width: 100%">
<div style="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">PART
II</font></div>
</td>
</tr><tr style="background-color: #cceeff">
<td style="vertical-align: bottom; width: 14%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">ITEM
13.</font></div>
</td>
<td style="vertical-align: bottom; width: 77%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">DEFAULTS,
DIVIDEND ARREARAGES AND DELINQUENCIES</font></div>
</td>
<td style="vertical-align: bottom; width: 9%">
<div style="text-align: right; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">61</font></div>
</td>
</tr><tr>
<td style="vertical-align: bottom; width: 14%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">ITEM
14.</font></div>
</td>
<td style="vertical-align: bottom; width: 77%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">MATERIAL
MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF
PROCEEDS</font></div>
</td>
<td style="vertical-align: bottom; width: 9%">
<div style="text-align: right; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">61</font></div>
</td>
</tr><tr style="background-color: #cceeff">
<td style="vertical-align: bottom; width: 14%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">ITEM
15.</font></div>
</td>
<td style="vertical-align: bottom; width: 77%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">CONTROLS
AND PROCEDURES</font></div>
</td>
<td style="vertical-align: bottom; width: 9%">
<div style="text-align: right; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">61</font></div>
</td>
</tr><tr>
<td style="vertical-align: bottom; width: 14%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">ITEM
16A.</font></div>
</td>
<td style="vertical-align: bottom; width: 77%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">AUDIT
COMMITTEE FINANCIAL EXPERT</font></div>
</td>
<td style="vertical-align: bottom; width: 9%">
<div style="text-align: right; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">63</font></div>
</td>
</tr><tr style="background-color: #cceeff">
<td style="vertical-align: bottom; width: 14%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">ITEM
16B.</font></div>
</td>
<td style="vertical-align: bottom; width: 77%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">CODE
OF ETHICS</font></div>
</td>
<td style="vertical-align: bottom; width: 9%">
<div style="text-align: right; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">63</font></div>
</td>
</tr><tr>
<td style="vertical-align: bottom; width: 14%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">ITEM
16C.</font></div>
</td>
<td style="vertical-align: bottom; width: 77%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">PRINCIPAL
ACCOUNTANT FEES AND SERVICES</font></div>
</td>
<td style="vertical-align: bottom; width: 9%">
<div style="text-align: right; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">63</font></div>
</td>
</tr><tr style="background-color: #cceeff">
<td style="vertical-align: bottom; width: 14%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">ITEM
16D.</font></div>
</td>
<td style="vertical-align: bottom; width: 77%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">EXEMPTIONS
FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES</font></div>
</td>
<td style="vertical-align: bottom; width: 9%">
<div style="text-align: right; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">63</font></div>
</td>
</tr><tr>
<td style="vertical-align: bottom; width: 14%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">ITEM
16E.</font></div>
</td>
<td style="vertical-align: bottom; width: 77%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">PURCHASES
OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED
PURCHASERS</font></div>
</td>
<td style="vertical-align: bottom; width: 9%">
<div style="text-align: right; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">63</font></div>
</td>
</tr><tr style="background-color: #cceeff">
<td style="vertical-align: bottom; width: 14%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">ITEM
16F.</font></div>
</td>
<td style="vertical-align: bottom; width: 77%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">CHANGE
IN REGISTRANT&#x2019;S CERTIFYING ACCOUNTANT</font></div>
</td>
<td style="vertical-align: bottom; width: 9%">
<div style="text-align: right; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">64</font></div>
</td>
</tr><tr>
<td style="vertical-align: bottom; width: 14%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">ITEM
16G.</font></div>
</td>
<td style="vertical-align: bottom; width: 77%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">CORPORATE
GOVERNANCE</font></div>
</td>
<td style="vertical-align: bottom; width: 9%">
<div style="text-align: right; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">64</font></div>
</td>
</tr><tr style="background-color: #cceeff">
<td style="vertical-align: bottom; width: 14%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">ITEM
16H.</font></div>
</td>
<td style="vertical-align: bottom; width: 77%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">MINE
SAFETY DISCLOSURE</font></div>
</td>
<td style="vertical-align: bottom; width: 9%">
<div style="text-align: right; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">64</font></div>
</td>
</tr><tr>
<td colspan="3" style="vertical-align: bottom; width: 100%">
<div style="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">PART
III</font></div>
</td>
</tr><tr style="background-color: #cceeff">
<td style="vertical-align: bottom; width: 14%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">ITEM
17.</font></div>
</td>
<td style="vertical-align: bottom; width: 77%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">FINANCIAL
STATEMENTS</font></div>
</td>
<td style="vertical-align: bottom; width: 9%">
<div style="text-align: right; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">64</font></div>
</td>
</tr><tr>
<td style="vertical-align: bottom; width: 14%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">ITEM
18.</font></div>
</td>
<td style="vertical-align: bottom; width: 77%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">FINANCIAL
STATEMENTS</font></div>
</td>
<td style="vertical-align: bottom; width: 9%">
<div style="text-align: right; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">64</font></div>
</td>
</tr><tr style="background-color: #cceeff">
<td style="vertical-align: bottom; width: 14%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">ITEM
19.</font></div>
</td>
<td style="vertical-align: bottom; width: 77%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">EXHIBITS</font></div>
</td>
<td style="vertical-align: bottom; width: 9%">
<div style="text-align: right; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="color: #000000; font-size: 13px; font-family: Times New Roman">65</font></div>
</td>
</tr></table>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">&#xA0;</font></div>
<br>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div id="pgbrk" style="width: 100%; margin-left: 0px; text-indent: 0px; margin-right: 0px">
<div id="ftr">
<div style="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div id="pn" style="text-align: center"><font style="font-family: Times New Roman; font-size: 13px">3</font></div>
</div>
<div id="pb" style="text-align: center; page-break-after: always; margin-left: 0px; margin-right: 0px; margin-bottom: 6px; width: 100%; height: 1px; background-color: #000000">
<!--page break--></div>
<div id="hdr">
<div style="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">
FORWARD-LOOKING STATEMENTS</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Except
for any historical information contained herein, the matters
discussed in this Annual Report on Form&#xA0;20-F contain certain
&#x201C;forward-looking statements&#x201D; within the meaning of the
Private Securities Litigation Reform Act of 1995 with respect to
our financial condition, results of operations and business. These
statements relate to analyses and other information which are based
on forecasts of future results and estimates of amounts not yet
determinable. These statements also relate to our future prospects,
developments and business strategies. These forward-looking
statements are identified by their use of terms and phrases such as
&#x201C;anticipate&#x201D;, &#x201C;believe&#x201D;,
&#x201C;could&#x201D;, &#x201C;estimate&#x201D;, &#x201C;expect&#x201D;,
&#x201C;intend&#x201D;, &#x201C;may&#x201D;, &#x201C;plan&#x201D;,
&#x201C;predict&#x201D;, &#x201C;will&#x201D; and similar terms and
phrases, including references to assumptions. These forward-looking
statements involve risks and uncertainties, including current trend
information, projections for deliveries and other trend
projections, that may cause our actual future activities and
results of operations to be materially different from those
suggested or described in this Annual Report on Form
20-F.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">These
risks include:</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="margin-left: 48px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">novel coronavirus
(2019-nCoV/COVID-19), and the potentially negative effects thereof
on the Company's workforce, its supply chain or demand for its
products our ability to generate sufficient ongoing cash flow from
operations or to raise adequate capital to allow NXT to grow the
business and continue operations;</font></div>
</div>
</div>
<div style="margin-left: 48px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">the ability of
management to execute its business plan;</font></div>
</div>
</div>
<div style="margin-left: 48px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">health, safety and
the environment (including risks related the novel
coronavirus);</font></div>
</div>
</div>
<div style="margin-left: 48px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">the emergence of
alternative competitive technologies;</font></div>
</div>
</div>
<div style="margin-left: 48px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">our ability to
protect and maintain our intellectual property and rights to our
SFD<font style="font-size: 70%; vertical-align: top">&#xAE;</font>
technology;</font></div>
</div>
</div>
<div style="margin-left: 48px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">our reliance on a
limited number of key personnel;</font></div>
</div>
</div>
<div style="margin-left: 48px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">our reliance on a
limited number of aircraft;</font></div>
</div>
</div>
<div style="margin-left: 48px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">our reliance on a
limited number of clients;</font></div>
</div>
</div>
<div style="margin-left: 48px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">counterparty credit
risk;</font></div>
</div>
</div>
<div style="margin-left: 48px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">foreign currency
and interest rate fluctuations;</font></div>
</div>
</div>
<div style="margin-left: 48px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">changes in, or in
the interpretation of, laws, regulations or policies; and general
business, economic and market conditions (including global
commodity prices); and</font></div>
</div>
</div>
<div style="margin-left: 48px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">other factors
described herein under &#x201C;Risk Factors&#x201D; (see Item 3.
D.).</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">If one
or more of these risks or uncertainties materialize, or if
underlying assumptions prove incorrect, our actual results may vary
materially from those expected, estimated or projected. Given these
uncertainties, users of the information included in this Annual
Report on Form 20-F, including investors and prospective investors,
are cautioned not to place undue reliance on such forward-looking
statements. We do not intend to update the forward-looking
statements included in this Annual Report on Form
20-F.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">In this
Annual Report on Form 20-F, except as specified otherwise or unless
the context requires otherwise, &#x201C;we&#x201D;,
&#x201C;our&#x201D;, &#x201C;us&#x201D;, the &#x201C;Company&#x201D;, and
&#x201C;NXT&#x201D; refer to NXT Energy Solutions Inc. and its
subsidiaries. All references to &#x201C;fiscal&#x201D; in connection
with a year shall mean the year ended December 31.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">All
financial information contained herein is expressed in Canadian
dollars (&#x201C;Cdn$&#x201D;) unless otherwise stated.<a name="_Toc67473235"><!--anchor--></a></font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">
PART I</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="display: table; margin-left: 48px">
<div style="display: table-row">
<div style="display: table-cell; width: 84px"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px"><a name="_Toc449704245"><!--anchor--></a>ITEM 1.&#xA0;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">IDENTITY
OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS</font></div>
</div>
</div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">This
Form 20-F is being filed as an annual report under the United
States <font style="font-style: italic">Securities Exchange Act of
1934</font>, as amended, (the "<font style="font-weight: bold">U.S.
Exchange Act</font>") and, as such, there is no requirement to
provide any information under this item.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="display: table; margin-left: 48px">
<div style="display: table-row">
<div style="display: table-cell; width: 84px"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px"><a name="_Toc449704246"><!--anchor--></a>ITEM 2.&#xA0;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">OFFER
STATISTICS AND EXPECTED TIMETABLE</font></div>
</div>
</div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">This
Form 20-F is being filed as an annual report under the U.S.
Exchange Act and, as such, there is no requirement to provide any
information under this item.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div id="pgbrk" style="width: 100%; margin-left: 0px; text-indent: 0px; margin-right: 0px">
<div id="ftr">
<div style="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div id="pn" style="text-align: center"><font style="font-family: Times New Roman; font-size: 13px">4</font></div>
</div>
<div id="pb" style="text-align: center; page-break-after: always; margin-left: 0px; margin-right: 0px; margin-bottom: 6px; width: 100%; height: 1px; background-color: #000000">
<!--page break--></div>
<div id="hdr">
<div style="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="display: table; margin-left: 48px">
<div style="display: table-row">
<div style="display: table-cell; width: 84px"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px"><a name="_Toc449704247"><!--anchor--></a>ITEM 3.&#xA0;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">KEY
INFORMATION</font></div>
</div>
</div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="display: table">
<div style="display: table-row">
<div style="display: table-cell; width: 48px"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">A.&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">Selected
financial data.</font></div>
</div>
</div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">The
following historical financial information should be read in
conjunction with the section entitled &#x201C;Operating and
Financial Review&#x201D; (see Item 5 herein) and our audited
consolidated financial statements and related notes, which are
included elsewhere in this document. The consolidated statements of
income (loss) data for the years ended December&#xA0;31, 2019,
2018, and 2017 and selected consolidated balance sheet data as of
December&#xA0;31, 2019 and 2018 are derived from and qualified by
reference to, our audited consolidated financial statements that
are included elsewhere in this Form 20-F. The consolidated
statements of income (loss) data for the years ended
December&#xA0;31, 2016 and 2015 and the selected consolidated
balance sheet data as of December&#xA0;31, 2017, 2016 and 2015, are
derived from our previously filed audited consolidated financial
statements (which are not included in this Form 20-F).</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-weight: bold; color: #000000; font-family: Times New Roman; font-size: 13px">
INCOME (LOSS) &amp; COMPREHENSIVE INCOME (LOSS)</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div>
<table cellpadding="0" cellspacing="0" style="margin-right:0px;width:100%;font-size:inherit;font-family:inherit;margin-left:0px;">
<tr>
<td rowspan="1" style="vertical-align:bottom;width:50%;">
<div style="text-align: left; text-indent:0px;margin-right:0px;padding-bottom:1px;margin-left:0px;"><font style="font-weight: bold; color: #000000; font-family: Times New Roman; font-size: 13px">
(expressed in Canadian Dollars)</font></div>
</td>
<td rowspan="1" style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; border-bottom: 1px solid rgb(0, 0, 0); display: inline-block; font-size: 11px;">
<div><font style="font-weight: bold; font-family: Times New Roman; color: rgb(0, 0, 0);">
2019</font></div>
</font><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px;">&#xA0;</font></div>
</td>
<td rowspan="1" style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; border-bottom: 1px solid rgb(0, 0, 0); display: inline-block; font-size: 11px;">
<div><font style="font-weight: bold; font-family: Times New Roman; color: rgb(0, 0, 0);">
2018</font></div>
</font><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px;">&#xA0;</font></div>
</td>
<td rowspan="1" style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; border-bottom: 1px solid rgb(0, 0, 0); display: inline-block; font-size: 11px;">
<div><font style="font-weight: bold; font-family: Times New Roman; color: rgb(0, 0, 0);">
2017</font></div>
</font><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px;">&#xA0;</font></div>
</td>
<td rowspan="1" style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; border-bottom: 1px solid rgb(0, 0, 0); display: inline-block; font-size: 11px;">
<div><font style="font-weight: bold; font-family: Times New Roman; color: rgb(0, 0, 0);">
2016</font></div>
</font><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px;">&#xA0;</font></div>
</td>
<td rowspan="1" style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; border-bottom: 1px solid rgb(0, 0, 0); display: inline-block; font-size: 11px;">
<div><font style="font-weight: bold; font-family: Times New Roman; color: rgb(0, 0, 0);">
2015</font></div>
</font><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td colspan="1" style="vertical-align:bottom;width:50%;">
<div style="text-align: left; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Survey
revenues</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">$</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">11,976,149</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">$</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">$</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">$</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">1,447,269</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">$</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">17,422,151</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td colspan="1" style="vertical-align:bottom;width:50%;">
<div style="text-align: left; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Operating
expenses</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td colspan="1" style="vertical-align:bottom;width:50%;">
<div style="text-align: left; text-indent:0px;margin-right:0px;margin-left:36px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Survey
costs</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">2,611,086</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">1,103,946</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">1,289,429</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">1,157,185</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">5,095,691</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td colspan="1" style="vertical-align:bottom;width:50%;">
<div style="text-align: left; text-indent:0px;margin-right:0px;margin-left:36px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">General
and administrative</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">3,497,785</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">3,999,089</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">4,960,961</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">5,645,459</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">5,049,690</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td colspan="1" style="vertical-align:bottom;width:50%;">
<div style="text-align: left; text-indent:0px;margin-right:0px;margin-left:36px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Stock
based compensation expense</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">43,809</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">386,154</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">581,356</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">790,500</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">1,081,000</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td colspan="1" style="vertical-align:bottom;width:50%;">
<div style="text-align: left; text-indent:0px;margin-right:0px;padding-bottom:1px;margin-left:36px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Amortization
expense</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">1,781,181</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">1,790,267</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">1,897,576</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">2,104,864</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">704,943</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td colspan="1" style="vertical-align:bottom;width:50%;">
<div style="margin-left:0px;padding-bottom:1px;"><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">7,933,861</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">7,279,456</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">8,729,322</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">9,698,008</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">11,931,324</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td colspan="1" style="vertical-align:bottom;width:50%;">
<div style="text-align: left; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Other
expense (income)</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td colspan="1" style="vertical-align:bottom;width:50%;">
<div style="text-align: left; text-indent:0px;margin-right:0px;margin-left:36px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Interest
expense (income), net</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">(20,684</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">)</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">(62,004</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">)</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">4,485</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">(17,254</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">)</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">(13,910</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">)</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td colspan="1" style="vertical-align:bottom;width:50%;">
<div style="text-align: left; text-indent:0px;margin-right:0px;margin-left:36px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Foreign
exchange (gain) loss</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">233,231</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">(19,852</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">)</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">69,676</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">272,713</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">(712,480</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">)</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td colspan="1" style="vertical-align:bottom;width:50%;">
<div style="text-align: left; text-indent:0px;margin-right:0px;margin-left:36px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Other
expense (income)</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">56,833</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">(43,428</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">)</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">91,370</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">218,853</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">529,081</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td colspan="1" style="vertical-align:bottom;width:50%;">
<div style="text-align: left; text-indent:0px;margin-right:0px;margin-left:36px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Gain
on extinguishment of liability (Note 20)</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">(185,661</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">)</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td colspan="1" style="vertical-align:bottom;width:50%;">
<div style="text-align: left; text-indent:0px;margin-right:0px;padding-bottom:1px;margin-left:36px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Increase
(decrease) in fair value of US$ Warrants</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td colspan="1" style="vertical-align:bottom;width:50%;">
<div style="margin-left:0px;padding-bottom:1px;"><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">269,380</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">(310,945</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">)</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">165,531</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">474,312</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">(197,390</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">)</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td colspan="1" style="vertical-align:bottom;width:50%;">
<div style="text-align: left; text-indent:-24px;margin-right:0px;margin-left:24px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Income
(loss) before income taxes</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">3,772,908</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">(6,968,511</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">)</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">(8,894,853</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">)</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">(8,725,051</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">)</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">5,688,136</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td colspan="1" style="vertical-align:bottom;width:50%;">
<div style="text-align: left; text-indent:-24px;margin-right:0px;padding-bottom:1px;margin-left:24px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Income
tax expense (recovery)</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">75,545</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">374,511</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">(4,852,092</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">)</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td colspan="1" style="vertical-align:bottom;width:50%;">
<div style="text-align: left; text-indent:-24px;margin-right:0px;padding-bottom:1px;margin-left:24px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Net
income (loss) and comprehensive income (loss) for the
year</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">3,772,908</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">(6,968,511</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">)</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">(8,970,398</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">)</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">(9,099,562</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">)</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">10,540,228</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td colspan="1" style="vertical-align:bottom;width:50%;">
<div style="text-align: left; text-indent:-36px;margin-right:0px;margin-left:36px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Net
income (loss) per share - Basic</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">$</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">0.06</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">$</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">( 0.11</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">)</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">$</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">(0.16</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">)</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">$</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">( 0.17</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">)</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">$</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">0.22</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td colspan="1" style="vertical-align:bottom;width:50%;">
<div style="text-align: left; text-indent:0px;margin-right:0px;padding-bottom:1px;margin-left:36px;"><font style="font-family: Times New Roman; font-size: 13px"><font style="color: #000000">Diluted</font> <font style="font-weight: bold; font-size: 70%; vertical-align: top">(1)</font></font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">$</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">0.06</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">$</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">( 0.11</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">)</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">$</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">(0.16</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">)</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">$</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">( 0.17</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">)</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">$</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">0.21</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td colspan="1" style="vertical-align:bottom;width:50%;">
<div style="text-align: left; text-indent:-24px;margin-right:0px;margin-left:24px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Weighted
average # of common shares outstanding</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td colspan="1" style="vertical-align:bottom;width:50%;">
<div style="text-align: left; text-indent:0px;margin-right:0px;margin-left:36px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Basic</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">68,156,059</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">65,455,325</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">54,523,113</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">53,562,155</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">47,782,647</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td colspan="1" style="vertical-align:bottom;width:50%;">
<div style="text-align: left; text-indent:0px;margin-right:0px;margin-left:36px;"><font style="font-family: Times New Roman; font-size: 13px"><font style="color: #000000">Diluted</font> <font style="font-weight: bold; font-size: 70%; vertical-align: top">(1)</font></font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">68,156,059</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">65,455,325</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">54,523,113</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">53,562,155</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">49,041,383</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td colspan="1" style="vertical-align:bottom;width:50%;">
<div style="margin-left:0px;"><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td colspan="1" style="vertical-align:bottom;width:50%;">
<div style="text-align: left; text-indent:-24px;margin-right:0px;padding-bottom:1px;margin-left:24px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">#
of common shares outstanding</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">64,406,891</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">68,573,558</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">58,161,133</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">53,856,509</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">53,306,109</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
</tr></table>
</div>
<div style="text-align: justify; margin-left: 24px; margin-right: 0px; text-indent: -24px">
<font style="font-family: Times New Roman; font-size: 9.1px;">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 24px; margin-right: 0px; text-indent: -24px">
<font style="font-family: Times New Roman; font-size: 13px"><font style="font-weight: bold; font-size: 70%; vertical-align: top">(1)</font>
In periods with a loss, the diluted total excludes the 8,000,000
convertible preferred shares which were outstanding until
converted</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">on
August 31, 2015, as their effect is anti-dilutive.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div id="pgbrk" style="width: 100%; margin-left: 0px; text-indent: 0px; margin-right: 0px">
<div id="ftr">
<div style="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div id="pn" style="text-align: center"><font style="font-family: Times New Roman; font-size: 13px">5</font></div>
</div>
<div id="pb" style="text-align: center; page-break-after: always; margin-left: 0px; margin-right: 0px; margin-bottom: 6px; width: 100%; height: 1px; background-color: #000000">
<!--page break--></div>
<div id="hdr">
<div style="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-weight: bold; color: #000000; font-family: Times New Roman; font-size: 13px">
Balance Sheet Data</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-weight: bold; color: #000000; font-family: Times New Roman; font-size: 13px">
(expressed in Canadian Dollars)</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: left">
<table cellpadding="0" cellspacing="0" style="text-align: left; font-family:inherit;margin-right:0px;margin-top:0px;margin-left:0px;width:100%;margin-bottom:0px;font-size:inherit;">
<tr>
<td rowspan="1" style="vertical-align:bottom;width:50%;">
<div style="padding-bottom:1px;margin-left:0px;"><font style="font-family: Times New Roman; font-size: 11px">&#xA0;</font></div>
</td>
<td rowspan="1" style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; padding-bottom:1px;width:10%;vertical-align:bottom;display:inline-block;">&#xA0;</font><font style="text-align: center; vertical-align:bottom;width:80%;border-bottom:solid 1px #000000;display:inline-block;">
<div><font style="font-weight:bold;font-family:Times New Roman;color:#000;">2019</font></div>
</font><font style="text-align: left; padding-bottom:1px;width:10%;vertical-align:bottom;display:inline-block;">&#xA0;</font></div>
</td>
<td rowspan="1" style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; font-weight:bold;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:11px;">&#xA0;</font><font style="text-align: center; border-bottom:solid 1px #000000;font-weight:bold;vertical-align:bottom;display:inline-block;width:80%;font-size:11px;">
<div><font style="font-weight:bold;font-family:Times New Roman;color:#000;">2018</font></div>
</font><font style="text-align: left; font-weight:bold;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:11px;">&#xA0;</font></div>
</td>
<td rowspan="1" style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; font-weight:bold;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:11px;">&#xA0;</font><font style="text-align: center; border-bottom:solid 1px #000000;font-weight:bold;vertical-align:bottom;display:inline-block;width:80%;font-size:11px;">
<div><font style="font-weight:bold;font-family:Times New Roman;color:#000;">2017</font></div>
</font><font style="text-align: left; font-weight:bold;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:11px;">&#xA0;</font></div>
</td>
<td rowspan="1" style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; font-weight:bold;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:11px;">&#xA0;</font><font style="text-align: center; border-bottom:solid 1px #000000;font-weight:bold;vertical-align:bottom;display:inline-block;width:80%;font-size:11px;">
<div><font style="font-weight:bold;font-family:Times New Roman;color:#000;">2016</font></div>
</font><font style="text-align: left; font-weight:bold;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:11px;">&#xA0;</font></div>
</td>
<td rowspan="1" style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; font-weight:bold;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:11px;">&#xA0;</font><font style="text-align: center; border-bottom:solid 1px #000000;font-weight:bold;vertical-align:bottom;display:inline-block;width:80%;font-size:11px;">
<div><font style="font-weight:bold;font-family:Times New Roman;color:#000;">2015</font></div>
</font><font style="text-align: left; font-weight:bold;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:11px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td style="vertical-align:bottom;width:50%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;padding-bottom:1px;margin-left:0px;"><font style="font-size: 12px"><font style="color: #000; font-family: Times New Roman">Working capital
(deficiency)</font></font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;border-bottom:solid 1px #000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:12px;">$</font><font style="text-align: right; color:#000;border-bottom:solid 1px #000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:12px;">7,129,182</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:12px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;border-bottom:solid 1px #000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:12px;">$</font><font style="text-align: right; color:#000;border-bottom:solid 1px #000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:12px;">3,823,832</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:12px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;border-bottom:solid 1px #000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:12px;">$</font><font style="text-align: right; color:#000;border-bottom:solid 1px #000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:12px;">(318,166</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:12px;">)</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;border-bottom:solid 1px #000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:12px;">$</font><font style="text-align: right; color:#000;border-bottom:solid 1px #000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:12px;">1,703,510</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:12px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;border-bottom:solid 1px #000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:12px;">$</font><font style="text-align: right; color:#000;border-bottom:solid 1px #000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:12px;">7,534,128</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:12px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td style="vertical-align:bottom;width:50%;">
<div style="margin-left:0px;"><font style="font-size: 12px"><font style="font-family: Times New Roman">&#xA0;</font></font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:12px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:12px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:12px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:12px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:12px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:12px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:12px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:12px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:12px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:12px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:12px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:12px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:12px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:12px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:12px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:12px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:12px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:12px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:12px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:12px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td style="vertical-align:bottom;width:50%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="font-size: 12px"><font style="color: #000; font-family: Times New Roman">Current
assets</font></font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:12px;">&#xA0;</font><font style="text-align: right; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:12px;">8,445,904</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:12px;">&#xA0;</font><font style="text-align: right; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:12px;">4,365,970</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:12px;">&#xA0;</font><font style="text-align: right; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:12px;">1,284,008</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:12px;">&#xA0;</font><font style="text-align: right; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:12px;">2,316,341</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:12px;">&#xA0;</font><font style="text-align: right; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:12px;">10,691,918</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td style="vertical-align:bottom;width:50%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="font-size: 12px"><font style="color: #000; font-family: Times New Roman">Deposits</font></font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:12px;">&#xA0;</font><font style="text-align: right; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:12px;">535,554</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:12px;">&#xA0;</font><font style="text-align: right; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:12px;">560,341</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:12px;">&#xA0;</font><font style="text-align: right; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:12px;">518,765</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:12px;">&#xA0;</font><font style="text-align: right; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:12px;">-</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:12px;">&#xA0;</font><font style="text-align: right; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:12px;">-</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td style="vertical-align:bottom;width:50%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="font-size: 12px"><font style="color: #000; font-family: Times New Roman">Property and equipment,
net</font></font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:12px;">&#xA0;</font><font style="text-align: right; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:12px;">677,647</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:12px;">&#xA0;</font><font style="text-align: right; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:12px;">683,157</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:12px;">&#xA0;</font><font style="text-align: right; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:12px;">778,685</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:12px;">&#xA0;</font><font style="text-align: right; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:12px;">3,348,557</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:12px;">&#xA0;</font><font style="text-align: right; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:12px;">3,678,985</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td style="vertical-align:bottom;width:50%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="font-size: 12px"><font style="color: #000; font-family: Times New Roman">Right of use
assets</font></font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:12px;">&#xA0;</font><font style="text-align: right; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:12px;">3,063,769</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:12px;">&#xA0;</font><font style="text-align: right; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:12px;">-</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:12px;">&#xA0;</font><font style="text-align: right; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:12px;">-</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:12px;">&#xA0;</font><font style="text-align: right; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:12px;">-</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:12px;">&#xA0;</font><font style="text-align: right; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:12px;">-</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td style="vertical-align:bottom;width:50%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;padding-bottom:1px;margin-left:0px;"><font style="font-size: 12px"><font style="color: #000; font-family: Times New Roman">Intellectual property,
net</font></font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;border-bottom:solid 1px #000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:12px;">&#xA0;</font><font style="text-align: right; color:#000;border-bottom:solid 1px #000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:12px;">17,970,067</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:12px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;border-bottom:solid 1px #000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:12px;">&#xA0;</font><font style="text-align: right; color:#000;border-bottom:solid 1px #000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:12px;">19,654,800</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:12px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;border-bottom:solid 1px #000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:12px;">&#xA0;</font><font style="text-align: right; color:#000;border-bottom:solid 1px #000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:12px;">21,339,533</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:12px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;border-bottom:solid 1px #000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:12px;">&#xA0;</font><font style="text-align: right; color:#000;border-bottom:solid 1px #000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:12px;">23,024,268</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:12px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;border-bottom:solid 1px #000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:12px;">&#xA0;</font><font style="text-align: right; color:#000;border-bottom:solid 1px #000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:12px;">24,709,000</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:12px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td style="vertical-align:bottom;width:50%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;padding-bottom:1px;margin-left:0px;"><font style="font-size: 12px"><font style="color: #000; font-family: Times New Roman">Total
assets</font></font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;border-bottom:solid 1px #000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:12px;">&#xA0;</font><font style="text-align: right; color:#000;border-bottom:solid 1px #000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:12px;">30,692,941</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:12px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;border-bottom:solid 1px #000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:12px;">&#xA0;</font><font style="text-align: right; color:#000;border-bottom:solid 1px #000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:12px;">25,264,268</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:12px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;border-bottom:solid 1px #000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:12px;">&#xA0;</font><font style="text-align: right; color:#000;border-bottom:solid 1px #000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:12px;">23,920,991</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:12px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;border-bottom:solid 1px #000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:12px;">&#xA0;</font><font style="text-align: right; color:#000;border-bottom:solid 1px #000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:12px;">28,689,166</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:12px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;border-bottom:solid 1px #000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:12px;">&#xA0;</font><font style="text-align: right; color:#000;border-bottom:solid 1px #000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:12px;">39,079,903</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:12px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td style="vertical-align:bottom;width:50%;">
<div style="margin-left:0px;"><font style="font-size: 12px"><font style="font-family: Times New Roman">&#xA0;</font></font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:12px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:12px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:12px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:12px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:12px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:12px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:12px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:12px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:12px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:12px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:12px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:12px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:12px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:12px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:12px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:12px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:12px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:12px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:12px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:12px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td style="vertical-align:bottom;width:50%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="font-size: 12px"><font style="color: #000; font-family: Times New Roman">Current
liabilities</font></font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:12px;">&#xA0;</font><font style="text-align: right; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:12px;">1,316,722</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:12px;">&#xA0;</font><font style="text-align: right; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:12px;">542,138</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:12px;">&#xA0;</font><font style="text-align: right; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:12px;">1,602,174</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:12px;">&#xA0;</font><font style="text-align: right; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:12px;">612,831</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:12px;">&#xA0;</font><font style="text-align: right; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:12px;">3,157,790</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td style="vertical-align:bottom;width:50%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;padding-bottom:1px;margin-left:0px;"><font style="font-size: 12px"><font style="color: #000; font-family: Times New Roman">Long-term
liabilities</font></font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;border-bottom:solid 1px #000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:12px;">&#xA0;</font><font style="text-align: right; color:#000;border-bottom:solid 1px #000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:12px;">2,691,217</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:12px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;border-bottom:solid 1px #000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:12px;">&#xA0;</font><font style="text-align: right; color:#000;border-bottom:solid 1px #000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:12px;">510,661</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:12px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;border-bottom:solid 1px #000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:12px;">&#xA0;</font><font style="text-align: right; color:#000;border-bottom:solid 1px #000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:12px;">741,408</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:12px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;border-bottom:solid 1px #000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:12px;">&#xA0;</font><font style="text-align: right; color:#000;border-bottom:solid 1px #000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:12px;">264,775</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:12px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;border-bottom:solid 1px #000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:12px;">&#xA0;</font><font style="text-align: right; color:#000;border-bottom:solid 1px #000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:12px;">300,462</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:12px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td style="vertical-align:bottom;width:50%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;padding-bottom:1px;margin-left:0px;"><font style="font-size: 12px"><font style="color: #000; font-family: Times New Roman">Total
liabilities</font></font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;border-bottom:solid 1px #000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:12px;">&#xA0;</font><font style="text-align: right; color:#000;border-bottom:solid 1px #000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:12px;">4,007,939</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:12px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;border-bottom:solid 1px #000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:12px;">&#xA0;</font><font style="text-align: right; color:#000;border-bottom:solid 1px #000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:12px;">1,052,799</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:12px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;border-bottom:solid 1px #000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:12px;">&#xA0;</font><font style="text-align: right; color:#000;border-bottom:solid 1px #000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:12px;">2,343,582</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:12px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;border-bottom:solid 1px #000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:12px;">&#xA0;</font><font style="text-align: right; color:#000;border-bottom:solid 1px #000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:12px;">887,606</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:12px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;border-bottom:solid 1px #000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:12px;">&#xA0;</font><font style="text-align: right; color:#000;border-bottom:solid 1px #000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:12px;">3,458,252</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:12px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td style="vertical-align:bottom;width:50%;">
<div style="margin-left:0px;"><font style="font-size: 12px"><font style="font-family: Times New Roman">&#xA0;</font></font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:12px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:12px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:12px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:12px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:12px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:12px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:12px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:12px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:12px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:12px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:12px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:12px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:12px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:12px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:12px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:12px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:12px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:12px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:12px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:12px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td style="vertical-align:bottom;width:50%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="font-size: 12px"><font style="color: #000; font-family: Times New Roman">Shareholders&#x2019;
equity:</font></font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:12px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:12px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:12px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:12px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:12px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:12px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:12px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:12px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:12px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:12px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:12px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:12px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:12px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:12px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:12px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:12px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:12px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:12px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:12px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:12px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td style="vertical-align:bottom;width:50%;">
<div style="text-align: left; text-indent:24px;margin-right:0px;margin-left:0px;"><font style="font-size: 12px"><font style="color: #000; font-family: Times New Roman">Common
shares</font></font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:12px;">&#xA0;</font><font style="text-align: right; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:12px;">95,313,064</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:12px;">&#xA0;</font><font style="text-align: right; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:12px;">96,656,248</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:12px;">&#xA0;</font><font style="text-align: right; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:12px;">88,121,286</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:12px;">&#xA0;</font><font style="text-align: right; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:12px;">85,966,393</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:12px;">&#xA0;</font><font style="text-align: right; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:12px;">85,051,553</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td style="vertical-align:bottom;width:50%;">
<div style="text-align: left; text-indent:24px;margin-right:0px;margin-left:0px;"><font style="font-size: 12px"><font style="color: #000; font-family: Times New Roman">Preferred
shares</font></font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:12px;">&#xA0;</font><font style="text-align: right; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:12px;">-</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:12px;">&#xA0;</font><font style="text-align: right; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:12px;">-</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:12px;">&#xA0;</font><font style="text-align: right; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:12px;">-</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:12px;">&#xA0;</font><font style="text-align: right; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:12px;">-</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:12px;">&#xA0;</font><font style="text-align: right; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:12px;">-</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td style="vertical-align:bottom;width:50%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="font-size: 12px"><font style="color: #000; font-family: Times New Roman">Contributed
capital</font></font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:12px;">$</font><font style="text-align: right; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:12px;">9,306,493</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:12px;">$</font><font style="text-align: right; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:12px;">9,262,684</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:12px;">$</font><font style="text-align: right; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:12px;">8,195,075</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:12px;">$</font><font style="text-align: right; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:12px;">7,613,719</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:12px;">$</font><font style="text-align: right; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:12px;">7,239,089</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td style="vertical-align:bottom;width:50%;">
<div style="text-align: left; text-indent:24px;margin-right:0px;margin-left:0px;"><font style="font-size: 12px"><font style="color: #000; font-family: Times New Roman">Deficit</font></font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:12px;">&#xA0;</font><font style="text-align: right; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:12px;">(78,645,489</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">)</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:12px;">&#xA0;</font><font style="text-align: right; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:12px;">(82,418,397</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">)</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:12px;">&#xA0;</font><font style="text-align: right; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:12px;">(75,449,886</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">)</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:12px;">&#xA0;</font><font style="text-align: right; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:12px;">(66,479,487</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">)</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:12px;">&#xA0;</font><font style="text-align: right; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:12px;">(57,379,926</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:12px;">)</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td style="vertical-align:bottom;width:50%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;padding-bottom:1px;margin-left:0px;"><font style="font-size: 12px"><font style="color: #000; font-family: Times New Roman">Accumulated other
comprehensive income</font></font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;border-bottom:solid 1px #000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:12px;">&#xA0;</font><font style="text-align: right; color:#000;border-bottom:solid 1px #000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:12px;">710,934</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:12px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;border-bottom:solid 1px #000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:12px;">&#xA0;</font><font style="text-align: right; color:#000;border-bottom:solid 1px #000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:12px;">710,934</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:12px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;border-bottom:solid 1px #000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:12px;">&#xA0;</font><font style="text-align: right; color:#000;border-bottom:solid 1px #000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:12px;">710,934</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:12px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;border-bottom:solid 1px #000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:12px;">&#xA0;</font><font style="text-align: right; color:#000;border-bottom:solid 1px #000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:12px;">710,935</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:12px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;border-bottom:solid 1px #000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:12px;">&#xA0;</font><font style="text-align: right; color:#000;border-bottom:solid 1px #000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:12px;">710,935</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:12px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td style="vertical-align:bottom;width:50%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;padding-bottom:1px;margin-left:0px;"><font style="font-size: 12px"><font style="color: #000; font-family: Times New Roman">Total
equity</font></font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;border-bottom:solid 1px #000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:12px;">&#xA0;</font><font style="text-align: right; color:#000;border-bottom:solid 1px #000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:12px;">26,685,002</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:12px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;border-bottom:solid 1px #000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:12px;">&#xA0;</font><font style="text-align: right; color:#000;border-bottom:solid 1px #000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:12px;">24,211,469</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:12px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;border-bottom:solid 1px #000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:12px;">&#xA0;</font><font style="text-align: right; color:#000;border-bottom:solid 1px #000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:12px;">21,577,409</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:12px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;border-bottom:solid 1px #000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:12px;">&#xA0;</font><font style="text-align: right; color:#000;border-bottom:solid 1px #000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:12px;">27,811,560</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:12px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;border-bottom:solid 1px #000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:12px;">&#xA0;</font><font style="text-align: right; color:#000;border-bottom:solid 1px #000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:12px;">35,621,651</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:12px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td style="vertical-align:bottom;width:50%;">
<div style="text-align: left; text-indent:0px;margin-right:0px;padding-bottom:1px;margin-left:0px;"><font style="font-size: 12px"><font style="color: #000; font-family: Times New Roman">Total liabilities and
equity</font></font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;border-bottom:solid 1px #000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:12px;">&#xA0;</font><font style="text-align: right; color:#000;border-bottom:solid 1px #000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:12px;">30,692,941</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:12px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;border-bottom:solid 1px #000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:12px;">&#xA0;</font><font style="text-align: right; color:#000;border-bottom:solid 1px #000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:12px;">25,264,268</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:12px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;border-bottom:solid 1px #000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:12px;">&#xA0;</font><font style="text-align: right; color:#000;border-bottom:solid 1px #000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:12px;">23,920,991</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:12px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;border-bottom:solid 1px #000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:12px;">&#xA0;</font><font style="text-align: right; color:#000;border-bottom:solid 1px #000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:12px;">28,689,166</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:12px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:12px;">&#xA0;</font><font style="text-align: left; color:#000;border-bottom:solid 1px #000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:12px;">&#xA0;</font><font style="text-align: right; color:#000;border-bottom:solid 1px #000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:12px;">39,079,903</font><font style="text-align: left; color:#000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:12px;">&#xA0;</font></div>
</td>
</tr></table>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
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<div id="ftr">
<div style="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div id="pn" style="text-align: center"><font style="font-family: Times New Roman; font-size: 13px">6</font></div>
</div>
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<div id="hdr">
<div style="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Throughout
the history of the Company there have been no dividends
declared.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="display: table">
<div style="display: table-row">
<div style="display: table-cell; width: 48px"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">B.&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">Capitalization
and indebtedness.</font></div>
</div>
</div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">This
Form 20-F is being filed as an annual report under the U.S.
Exchange Act and, as such, there is no requirement to provide any
information under this item.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="display: table">
<div style="display: table-row">
<div style="display: table-cell; width: 48px"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">C.&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">Reasons
for the offer and use of proceeds.</font></div>
</div>
</div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">This
Form 20-F is being filed as an annual report under the U.S.
Exchange Act and, as such, there is no requirement to provide any
information under this item.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="display: table">
<div style="display: table-row">
<div style="display: table-cell; width: 48px"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">D.&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">Risk
factors.</font></div>
</div>
</div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Investing
in our common shares involves a high degree of risk. In addition to
the other information included in this document, you should
carefully consider the risks described below before purchasing our
common shares. If any of the following risks actually occur, our
business, financial condition and results of operations could
materially suffer. As a result, the trading price of our common
shares could decline and you might lose all or part of your
investment.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px"><font style="font-weight: bold">
Covid-19 (2019-nCoV/COVID-19)</font> <font style="font-weight: bold">Pandemic</font></font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px;">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">

<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">The Covid-19
pandemic has not had a material effect on the operations of the
Company. The Company has made provisions so employees can work from
home, suspended all travel, mandated that international travelers
are to self-isolate for 14 days after return to Canada, and
implemented hygiene and social distancing policies. NXT continues
to communicate with employees and customers via available
communication methods such as tele-conferences and on-line video
conferencing.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">Demand for our
services and prospective revenues may become adversely impacted the
longer the Covid-19 pandemic continues. The impact of the
continuation of the Covid-19 pandemic may hamper our ability to
deliver SFD<font style="vertical-align: top; font-size: 70%">&#xAE;</font> surveys
contracts in the following ways. If restrictions on international
travel continue, our aircraft and personal will not be able to
perform surveys. An outbreak of the virus among our staff or our
customers&#x2019; personnel would delay any survey in progress.
Business development may be delayed when in-person meetings and
technical presentations may be a superior delivery method to
tele-conferences or on-line video conferencing.</font></div>
&#xA0; <font style="font-family: Times New Roman; font-size: 13px;"><br>
</font></div>
<div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">
Our ability to continue operating.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">The
consolidated financial statements for December 31, 2019 have been
prepared on a going concern basis.&#xA0; The going concern basis of
presentation assumes that NXT will continue in operation for the
foreseeable future and will be able to realize its assets and
discharge its liabilities and commitments in the normal course of
business.&#xA0;</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">NXT's
financial statements for December 31, 2018 included disclosure
related to the use of the "going concern" basis of presentation. In
2019, NXT has had positive cash flow from operations which has
resulted in a significant strengthening of the Company's liquidity
and working capital position. As a consequence, management is of
the view that removal of the "going concern" disclosure in respect
of its December 31, 2019 disclosure is warranted on the basis than
the Company currently has sufficient funds to maintain operations
for the next 12 months as of the date of the financial
statements.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">In the
preparation of the December 31, 2019 financial statements,
management determined that there are no existing conditions or
reasonably foreseeable events that raise substantial doubt about
the Company's ability to continue as a going concern. However,
NXT's future financial results and its longer term success remains
dependent upon the ability to continue to attract and execute
client projects to build its revenue base. NXT continues to develop
its pipeline of opportunities to secure new revenue contracts.
However, the Company's longer-term success remains dependent upon
its ability to convert these opportunities into successful
contracts and to continue to attract new client projects and expand
the revenue base to a level sufficient to exceed fixed operating
costs and continue to generate positive cash flow from
operations.&#xA0; The occurrence and timing of these events cannot
be predicted with certainty.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">NXT's
cash and cash equivalents plus short-term investments at December
31, 2019 totaled $<font style="color: #000000">6.64 million</font>.
Net working capital totaled $7.13 million.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">As NXT
is operating on a going concern basis, NXT's short-term ability to
generate sufficient cash depends on the success of signing
contracts and receiving advance payments pursuant to the terms of
such agreements<font style="font-weight: bold">.</font> NXT's
longer-term success remains dependent upon our ability to continue
to attract new client projects and expand the revenue base to a
level sufficient to exceed G&amp;A expenses and generate excess net
cash flow from operations<font style="color: #000000">. Proceeds
from past equity financings have been used to provide NXT with
funds to pursue, close and implement commercial transactions
currently in negotiation, develop additional revenue streams
including multi-client data sales and strategic partnerships and
for general corporate and net working capital
purposes.</font></font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<br>
<div><font style="font-family: Times New Roman; font-size: 10"><br></font></div>
</div>
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<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div id="pn" style="text-align: center"><font style="font-family: Times New Roman; font-size: 13px">7</font></div>
</div>
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<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px;">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">

<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Risks
related to having sufficient ongoing net working capital to execute
survey project contracts are mitigated through our normal practice
of obtaining advance payments and progress payments from customers
throughout the course of the projects, which often span three to
four months. In addition, where possible, risk of default on client
billings has been mitigated through the use of export insurance
programs offered by Export Development Canada.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">In
2019, NXT continued to make progress in strengthening its liquidity
and net working capital by completing the Nigerian SFD<font style="font-size: 70%; vertical-align: top">&#xAE;</font> Survey and
reducing corporate costs by reducing the number of
staff<font style="color: #1F497D">&#xA0;</font>and by implementing
new human resource policies to reduce staffing costs.</font></div>
&#xA0; <font style="font-family: Times New Roman; font-size: 13px;"><br>
</font></div>
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">As of the date of
this 20-F, NXT has sufficient funds to maintain its operations for
more than 12 months.</font></div>
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-family: Times New Roman; font-size: 13px;">&#xA0;</font></div>
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">The Company does
not have provisions in its leases, contracts, or other arrangements
that would trigger additional funding requirements or early
payments.</font></div>
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-family: Times New Roman; font-size: 13px;"><br></font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-weight: bold; font-size: 13px; font-family: Times New Roman">The
financial statements rely upon estimates and assumptions that could
be incorrect.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">The preparation of
financial statements requires our management to make estimates and
assumptions. These estimates and assumptions affect the reported
amounts of assets and liabilities including the disclosure of
contingent assets and liabilities as well as revenues and expenses
recorded in our financial statements. Estimates made relate
primarily to the measurement of accrued liabilities, stock-based
compensation expense, valuation of future income tax assets,
estimates for asset retirement obligations, the useful lives of
capital assets, and intellectual property.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px"><font style="font-size: 13px; font-family: Times New Roman">The estimates and
assumptions are reviewed periodically and are based upon the best
information available to management; however, we cannot provide
assurance that future events will not prove that these estimates
and assumptions are inaccurate. Any revisions to our estimates and
assumptions may have a material impact on our future reported net
income or loss and assets and liabilities.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px;">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">
Volatility in oil and natural gas commodity prices may affect
demand for our services.</font></div>
<div style="text-align: justify"><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">NXT's
customer base is in the oil and natural gas exploration industry,
which is exposed to risks of volatility in oil and natural gas
commodity prices. As such, demand for our services and prospective
revenues may become adversely impacted by ongoing declines in oil
and natural gas prices. The impact of price changes on our ability
to enter into SFD<font style="font-size: 70%; vertical-align: top">&#xAE;</font> survey
contracts cannot be readily determined. However, in general, if
commodity prices decline significantly, our opportunity to obtain
and execute SFD<font style="font-size: 70%; vertical-align: top">&#xAE;</font> survey
contracts will also likely decline, at least in the short
term.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">
Our financial position is affected by foreign currency
fluctuations.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">We
currently conduct cash transactions and have holdings in Canadian
dollars, U.S. dollars and periodically have holdings of local
currency in other countries. We generally contract to earn revenues
in U.S. dollars and potentially may earn revenues in Canadian
dollars and other foreign currencies.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Our
reporting currency is in Canadian dollars. We currently do not
engage in currency hedging activities, but are reviewing
opportunities to do so. Our cash positions and potential foreign
currency revenue streams in currencies other than Canadian dollars
exposes NXT to exchange rate fluctuations between the Canadian
dollar and foreign currencies.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Our
financial position will be affected by exchange rate fluctuations.
We may earn revenue and incur expenses denominated in foreign
currencies, yet report our financial results in Canadian dollars.
Furthermore, we intend to enter into contracts to provide services
in foreign countries and may periodically conduct business in other
currencies such as the Euro. Changes in currency exchange rates
could have an adverse effect on the Company's business, financial
condition and results of operations.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
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<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div id="pn" style="text-align: center"><font style="font-family: Times New Roman; font-size: 13px">8</font></div>
</div>
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<div style="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">&#xA0;
<font style="font-family: Times New Roman; font-size: 13px"><br>
</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">

<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">
Our net income or loss is impacted by interest rate
fluctuations.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">We
periodically invest available cash in short term investments that
generate interest income that will be affected by any change in
interest rates. (See Item 11).</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">
Availability of Aircraft.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">In
April 2017, NXT completed a sale and leaseback agreement of its
aircraft with a Calgary based international aircraft services
organization (the &#x201C;Lessor&#x201D;). The terms of the agreement
resulted in NXT selling its 1997 Cessna Citation Ultra 560 jet
aircraft that was purchased in 2015. NXT has leased the aircraft
over an initial term of 60 months and retains all existing
operating rights and obligations. NXT is required to make monthly
payments to the Lessor of approximately US$39,500. NXT has the
option to extend the term of the lease by an additional two years.
Should NXT want to repurchase the aircraft at the end of the
initial lease term, the purchase price is US$1,450,000. When the
aircraft is not needed for use by NXT, we seek to earn charter hire
revenues from the aircraft through a 3<font style="font-size: 70%; vertical-align: top">rd</font> party, Air
Partners.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Air
Partners also has access to an alternate, similar model aircraft
(certified for the use of our survey equipment) which could be
charter hired for use by NXT if needed.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">In the
event that NXT&#x2019;s aircraft is not available (due to damage, a
need for extensive repairs, or other unforeseen events) to conduct
survey projects, there is a risk that suitable alternative aircraft
may not be available on a timely basis from other charter operators
when needed. This inability to conduct survey operations could have
a material adverse effect on the Company's business, financial
condition and results of operations.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">
We are a small business with limited personnel and our inability to
segregate duties between administrative staff is an internal
control weakness.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Certain
duties that are most appropriately segregated between different
employees are due to our current limited staff, assigned to one or
two individuals depending on the task.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Standard
internal control methodology involves the separation of
incompatible functions by assigning these functions to separate
individuals and in larger organizations to separate departments. We
often cannot allocate these functions to separate individuals
because our administrative staff is limited.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Although
we have adopted alternative control methods designed to compensate
for the reduced ability to separate incompatible functions, these
alternative controls are not effective and there is more than a
remote likelihood that our internal control over financial
reporting will not prevent or detect material misstatements if they
should exist in our financial statements. This lack of separation
of duties exposes NXT to potential misappropriation of funds,
embezzlement and other forms of fraud and could have a material
adverse effect on our business, financial condition and results of
operations. (see also Item 15).</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
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</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">If the
Company were to default on its office lease, the current month rent
plus the next three months become immediately due. If the Company
were to default on the aircraft lease, the Company would be
required to deliver the aircraft back to the Lessor.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">
We may periodically engage in transactions with related
parties.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">We may
periodically enter into related party transactions with our
officers and directors. The most significant transaction was a
&#x201C;Technology Transfer Agreement&#x201D; (the &#x201C;TTA&#x201D;)
that was executed on December 31, 2006 between NXT and Mr. George
Liszicasz, our CEO, President and Chairman wherein we issued
10,000,000 convertible preferred shares to him in exchange for the
rights to the SFD<font style="font-size: 70%; vertical-align: top">&#xAE;</font> technology for
use in hydrocarbon exploration. In 2013, a total of 2,000,000 of
these preferred shares were converted (on a one-to-one basis) into
common shares, and the remaining 8,000,000 preferred shares were
converted in August 2015. In addition to the related party
transactions discussed elsewhere herein (i.e. the Co-operation
Agreement, the Loan Arrangement and the Targeted Issuer Bid), one
of the members of NXT's Board, Thomas Valentine, is a partner in
the law firm Norton Rose Fulbright Canada LLP which provides legal
advice to NXT.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">For a
full history of the TTA see also Item 4. part A, &#x201C;Information
on the Company - History and development of the Company&#x201D;, and
Item 4. part B. &#x201C;Information on the Company - Business
Overview &#x2013; Technology Transfer Agreement&#x201D;.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Although
we manage this potential conflict of interest risk through
maintenance of a strong independent board of directors (the
&#x201C;Board&#x201D;), all related party transactions have the
potential for conflicts of interest that may compromise the ability
of Board members to exercise their fiduciary responsibility to NXT
shareholders.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">For the
period December 1, 2017 to January 31, 2018, Mr. Selby acted as the
Interim CFO of the Company.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">
A single major shareholder who is also a Board member and an
officer of the Company retains the ability to influence or control
the Company, and this influence or control may result in a conflict
of interest.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Mr.
George Liszicasz, our CEO, is our largest shareholder and as of May
5, 2020 owns approximately 23% of our outstanding common shares and
therefore has a substantial influence in all shareholder
matters.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Controls
do exist to mitigate any potential risks associated with this
conflict of interest. Mr. Liszicasz adheres to a code of conduct
which includes a fiduciary responsibility to the Company, its
shareholders and this conduct is governed by the independent Board
of directors who collectively represent a majority of the Board.
Furthermore, all material related party transactions are disclosed
publicly.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">However,
should these conflict of interest controls not be effective,
decisions could be made by the Company that may advantage Mr.
Liszicasz and negatively impact other shareholders.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">
Our rights to SFD<font style="font-size: 70%; vertical-align: top">&#xAE;</font> technology may
be challenged and we may need to defend our rights to the
technology in the courts.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Our
rights to ownership and use of SFD<font style="font-size: 70%; vertical-align: top">&#xAE;</font> technology
depended on Mr. Liszicasz having the lawful right to sell to NXT
the exclusive rights to exploit the SFD<font style="font-size: 70%; vertical-align: top">&#xAE;</font> technology for
the exploration of hydrocarbons as agreed to in the
TTA.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">A risk
exists that an unknown party may claim some legal entitlement to
our intellectual property, our rights to commercialize this
intellectual property or our right to create SFD<font style="font-size: 70%; vertical-align: top">&#xAE;</font> devices and
processes. However, we believe that such a claim would be without
merit.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">The
SFD<font style="font-size: 70%; vertical-align: top">&#xAE;</font>
technology is an essential component of our business plan. If a
third party challenged our lawful entitlement to this technology,
the legal defense of our right to the technology may be expensive
and could cause a loss of our right to the SFD<font style="font-size: 70%; vertical-align: top">&#xAE;</font> technology, or
a protracted legal process to assert our right to the technology
would have a material adverse effect on the Company's business,
financial condition and results of operations.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
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<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<br>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">
We rely on specialized equipment, including a limited number of
SFD<font style="font-size: 70%; vertical-align: top">&#xAE;</font>
sensors and this limitation may affect our ability to conduct
business.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">We rely
on specialized data acquisition equipment, including a limited
number of SFD<font style="font-size: 70%; vertical-align: top">&#xAE;</font> sensor devices,
to conduct our aerial SFD<font style="font-size: 70%; vertical-align: top">&#xAE;</font> <font style="font-family: Times New Roman">survey</font> operations. We would
be at risk if these survey sensors were to become damaged,
destroyed, worn out, stolen or in any way became unavailable for
use in operations prior to us creating and testing additional
sensors. Should the sensors become unavailable for any reason, our
ability to conduct surveys could be delayed for several months as
we built new sensors. During this period we may become unable to
satisfy contractual obligations, which may jeopardize future
revenue opportunities and may potentially result in a client
drawing on a contract performance bond posted by the Company or
otherwise making claims against the Company for breach of contract.
In addition, an inability to satisfy contractual obligations may
have an adverse effect on our developing reputation within the oil
and gas community.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">NXT
seeks to mitigate this risk by researching new designs and
constructing additional SFD<font style="font-size: 70%; vertical-align: top">&#xAE;</font> sensor
devices.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">
As the Company is in the early commercialization phase,
SFD<font style="font-size: 70%; vertical-align: top">&#xAE;</font>
surveys have not been tested over all potential geological
conditions. Some geological conditions may subsequently be proven
to be unsuited for SFD<font style="font-size: 70%; vertical-align: top">&#xAE;</font> surveys thereby
creating unforeseen limitations to the application of
SFD<font style="font-size: 70%; vertical-align: top">&#xAE;</font>
surveys.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Any
limitation to the application of SFD<font style="font-size: 70%; vertical-align: top">&#xAE;</font> surveys has the
potential of restricting future revenue opportunities and if not
properly disclosed to industry clients, such limitations may impact
the reputation of the Company with these clients.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">
Unless we pursue ongoing technological improvement and development,
we may be unable to respond to changes in customer requirements or
new competitive technologies.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">We must
continue to refine and develop our SFD<font style="font-size: 70%; vertical-align: top">&#xAE;</font> survey system
to make it scalable for growth and to respond to potential future
competitive pressures. These improvements require substantial time
and resources. Furthermore, even if resources are available, there
can be no assurance that the Company will be commercially or
technically successful in enhancing the technology. Our inability
to keep pace with new technologies and evolving industry standards
and demands could have a material adverse effect on our business,
financial condition and results of operations.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">
We rely on a limited number of key personnel who collectively
possess the knowledge and skills to conduct SFD<font style="font-size: 70%; vertical-align: top">&#xAE;</font> surveys and
interpret SFD<font style="font-size: 70%; vertical-align: top">&#xAE;</font> data as
required to meet contract obligations. Additional or replacement
personnel cannot be found and trained quickly. The loss of any of
these key persons or increased demand for our services from clients
could impair our ability to meet contract obligations, thereby
adversely impacting our reputation and our ability to earn future
revenue from clients.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">We rely
on a limited number of key personnel who collectively possess the
knowledge and skills to conduct SFD<font style="font-size: 70%; vertical-align: top">&#xAE;</font> surveys and
interpret SFD<font style="font-size: 70%; vertical-align: top">&#xAE;</font> data as
required to meet contract obligations. Additional or replacement
personnel cannot be found and trained quickly. The loss of any of
these key persons or increased demand for our services from clients
could impair our ability to meet contract obligations, thereby
adversely impacting our reputation and our ability to earn future
revenue from clients.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">The
Company's future success depends, to a significant extent, on the
continued service of its key technical and management personnel and
on our ability to continue to attract and retain qualified
employees. The loss of the services of our employees or a failure
to attract, retain and motivate qualified personnel could have a
material adverse effect on our business, financial condition and
results of operations. We do not have &#x201C;key man&#x201D;
insurance on any of our personnel.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">The
Company put in place employment agreements with all of its
executive officers, including Mr. Liszicasz, its President and
CEO.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">We have
a dependence on Mr. Liszicasz and three other staff members to be
involved in the<font style="font-weight: bold">&#xA0;</font>SFD<font style="font-size: 70%; vertical-align: top">&#xAE;</font> data
interpretation process and to continue to enhance our technology.
We are working to minimize dependency on key personnel. Mr.
Liszicasz has trained and continues to train a team of signal
interpreters to minimize our reliance on him to perform these
functions. Currently, a total of four persons, two of which are
highly experienced, are trained to interpret SFD<font style="font-size: 70%; vertical-align: top">&#xAE;</font>
signals.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
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</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Although
we have engaged employees with suitable credentials to work with
Mr. Liszicasz to enhance our interpretation process and further
develop the SFD<font style="font-size: 70%; vertical-align: top">&#xAE;</font> technology, if
we are unable to reduce dependence on Mr. Liszicasz and he becomes
incapable of performing or unwilling to perform these functions,
then there may be an adverse effect on our ability to interpret the
data from SFD<font style="font-size: 70%; vertical-align: top">&#xAE;</font> surveys or to
enhance our technology.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Within
the province of Alberta, the skilled personnel that we require may
periodically be in short supply and there is specialized training
required that can take several months in order for a new employee
to become effective. If we cannot hire these key personnel, we have
inadequate time to train them or should we lose current personnel,
then our ability to accept contracts or meet contract commitments
may be adversely affected, thereby restricting our ability to earn
revenue.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">
Cyberattacks or other breaches of our technology hardware and
software, as well as risks associated with compliance and data
privacy could have an adverse effect on our systems, our service to
our customers, our reputation, our competitive position, and
financial results.&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Our
ability to manage our operations successfully is critical to our
success. Our business relies on our ability to electronically
gather, compile, process, store and distribute data and other
information. Unintended interruptions or failures resulting from
computer and telecommunications failures, equipment or software
malfunction, power outages, catastrophic events, security breaches
(such as unauthorized access by hackers), social engineering
schemes, unauthorized access, errors in usage by our employees,
computer viruses, ransomware or malware, and other events could
harm our business.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">In
April 2019, we were the target of a ransomware attack that involved
the infiltration and infection of our computer systems.&#xA0; We
made no payments relating to the ransomware, and believe we lost no
data.&#xA0; Following the ransomware incident, we began undertaking
remediation efforts and other steps to enhance our data security
infrastructure. In connection with these efforts, we have incurred
costs and expect to incur additional costs as we take further steps
to prevent unauthorized access to our systems and the data we
maintain. &#xA0;We cannot provide any assurance that all potential
causes of the incident have been identified and remediated and will
not occur again.&#xA0; While we have taken measures to minimize the
impact of these problems, the proper functioning of these systems
is critical to our business operations. Any security breach or
failure in our computer equipment, systems or data could result in
the interruption of our business operations and adversely impact
our financial results.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">
There is no certainty that an investor can trade our common shares
on public markets at a stable market price.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">The
Company has historically had a limited public market for our common
shares on the TSX Venture Exchange (the &#x201C;TSX-V&#x201D;), and
the United States (&#x201C;U.S.&#x201D;) OTC Markets Group&#x2019;s
Venture Stage Marketplace (the &#x201C;OTCQB&#x201D;) and there is a
risk that a broader or more active public trading market for our
common shares will not develop or be sustained, or that current
trading levels will not be sustained. Effective March 22, 2016, the
Company&#x2019;s application to graduate from the TSX-V to the
broader Toronto Stock Exchange (&#x201C;TSX&#x201D;), Canada&#x2019;s
premier stock exchange listing, was approved.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">The
market price for the common shares on the exchanges where our stock
is listed has been and we anticipate will continue to be, extremely
volatile and subject to significant price and volume fluctuations
in response to a variety of external and internal factors. This is
especially true with respect to emerging companies such as ours.
Examples of external factors, which can generally be described as
factors that are unrelated to the operating performance or
financial condition of any particular Company, include changes in
interest rates and worldwide economic and market conditions, as
well as changes in industry conditions, such as changes in oil and
natural gas prices, oil and natural gas inventory levels,
regulatory and environment rules and announcements of technology
innovations or new products by other companies. Examples of
internal factors, which can generally be described as factors that
are directly related to our consolidated financial condition or
results of operations, would include release of reports by
securities analysts and announcements we may make from time to time
relative to our operating performance, clients exploration results,
financing, advances in technology or other business
developments.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Because
we have a limited operating history and a limited history of
profitability to date, the market price for the common shares is
more volatile than that of a seasoned issuer. Changes in the market
price of the common shares, for example, may have no connection
with our operating results or the quality of services provided to
clients. No predictions or projections can be made as to what the
prevailing market price for the common shares will be at any time,
or as to what effect, if any, that the sale of shares or the
availability of common shares for sale at any time will have on the
prevailing market price. Given the relatively low historic trading
volumes, small trades of NXT&#x2019;s common shares can adversely
and potentially dramatically affect the market prices for those
shares.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
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</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Accordingly,
investors in our common stock should anticipate both volatile stock
price and poor liquidity unless these conditions
change.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">
You will be subject to the penny stock rules to the extent our
stock price on the OTCQB is less than $5.00.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Since
the common shares are not listed on a national stock exchange
within the United States, trading in the common shares on the OTCQB
is subject, to the extent the market price for the common shares is
less than $5.00 per share, to a number of regulations known as the
"penny stock rules". The penny stock rules, subject to certain
exemptions, require a broker-dealer to deliver a standardized risk
disclosure, the form of which is developed by the U.S. Securities
and Exchange Commission (the &#x201C;SEC&#x201D;) to provide the
customer with additional information, including current bid and
offer quotations for the penny stock, the compensation of the
broker-dealer and its salesperson in the transaction, monthly
account statements showing the market value of each penny stock
held in the customer's account, make a special written
determination that the penny stock is a suitable investment for the
purchaser and to receive the purchaser's written agreement to the
transaction. To the extent these requirements may be applicable,
they will reduce the level of trading activity in the secondary
market for the common shares and may severely and adversely affect
the ability of broker-dealers to sell the common
shares.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">
You should not expect to receive dividends in the foreseeable
future.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">We have
never paid any cash dividends on our common shares and we do not
anticipate that we will pay any dividends in the foreseeable
future. Our current business plan is to retain any future earnings
to finance the expansion of our business. Any future determination
to pay cash dividends will be at the discretion of our Board of
directors and will be dependent upon our consolidated financial
condition, results of operations, capital requirements and other
factors as our Board of directors may deem relevant at that
time.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">
Our right to issue additional capital stock at any time could have
an adverse effect on your proportionate ownership and voting
rights.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">We are
authorized under our Articles of Incorporation to issue an
unlimited number of common shares and an unlimited number of
preferred shares. We may issue these shares under such
circumstances and in such manner and at such times, prices, amounts
and purposes as our Board of Directors may, in its discretion,
determine to be necessary and appropriate, subject to compliance
with all applicable exchange regulations and corporate and
securities laws. Proportionate ownership and voting rights of
common shareholders could be adversely affected by the issuance of
additional common shares which may result in common share value
dilution.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">
We may not be able to protect our trade secrets and intellectual
property from competitors who would use this knowledge to eliminate
or reduce our technological advantage.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Our
success and future revenue growth will depend, in part, on our
ability to protect our intellectual property (&#x201C;IP&#x201D;). We
have commenced an IP strategy process to obtain patents related to
the SFD<font style="font-size: 70%; vertical-align: top">&#xAE;</font> technology,
while also utilizing &#x201C;trade secrets&#x201D; protection of the
proprietary nature of our technology as applicable.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Initiatives
to expand and protect our IP (including patenting and new R&amp;D
initiatives) have been very successful. Squire Patton Boggs LLP, a
U.S. based leader in IP protection, has been advising NXT on our IP
strategy, including the prior filing of an initial US provisional
patent application in May 2012. In November 2014, NXT filed a
related patent amendment submission in the US and since that time
has undertaken new patent applications in select strategic
international markets.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">So far,
SFD<font style="font-size: 70%; vertical-align: top">&#xAE;</font>
patents applications have been filed in nine (9) jurisdictions
worldwide.&#xA0; Thus far seven (7) patents have been granted: two
(2) in U.S., and one (1) in each of the following countries:
Canada, Japan, China, Russia, and Mexico. <font style="color: #262626">NXT has recently received confirmation of a patent
granted from the European Patent Office. This brings the total
number of countries granting the patent to 44. The final step is
for the validation process of the SFD</font><font style="font-size: 70%; vertical-align: top; color: #262626">&#xAE;</font>
<font style="color: #262626">technology patent in select European
countries. This is expected to take several month to
complete.</font> The SFD<font style="font-size: 70%; vertical-align: top">&#xAE;</font> patents serve
an important purpose beyond the protection they provide to the
proprietary SFD<font style="font-size: 70%; vertical-align: top">&#xAE;</font> technology. Our
patents also serve as an independent third-party verification of
the scientific principles that form the basis of the
SFD<font style="font-size: 70%; vertical-align: top">&#xAE;</font>
process and its application.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
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</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">The
patent protection application process requires disclosure of at
least some aspects of our SFD<font style="font-size: 70%; vertical-align: top">&#xAE;</font> technology to
third parties and ultimately public disclosure. This disclosure
could significantly increase the risk of unlawful use of our
technology by third parties. Furthermore, we have no assurance
that, even if we seek patent protection, a patent could be
registered to protect our IP in all or any jurisdictions within
North America or other countries throughout the world. If
registered, there can be no assurance that it would be sufficiently
broad to protect our technology or that any potential patent would
not be challenged, invalidated or circumvented or that any right
granted thereunder would provide meaningful protection or a
competitive advantage to us. Finally, protection afforded by
patents is limited by the financial resources available to legally
defend IP rights. We currently do not possess the required
financial resources to fund a lengthy defense of our rights if
challenged by a much larger competitor or an oil and gas
company.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">We do
enjoy common and contract law protection of our technology and
trade secrets. Employees and contractors are governed by
confidentiality agreements as well as a fiduciary responsibility to
protect our technology, supporting documentation and other
proprietary information.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Our
strongest protection of the SFD<font style="font-size: 70%; vertical-align: top">&#xAE;</font> technology
comes from restricting access to knowledge concerning the
technology. Only a very limited number of NXT personnel have access
to or knowledge of the underlying SFD<font style="font-size: 70%; vertical-align: top">&#xAE;</font> technology and
no one employee and only one officer has access or knowledge of all
aspects of the SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font>
system. Currently, no third party has any significant knowledge of
the technology. As further protection, <font style="font-family: Times New Roman; font-size: 13px">SFD<font style="font-size: 70%; vertical-align: top">&#xAE;</font></font>
equipment does not leave the direct control of NXT employees,
thereby preventing unauthorized replication of the
equipment.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">The
Company reassesses the appropriateness of its IP protection
strategy on an ongoing basis and seeks advice from IP advisors as
necessary.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">It is
possible that a third party will copy or otherwise obtain and use
the Company's technology without authorization, develop a similar
technology independently or design around the Company's secrets.
Accordingly, there can be no assurance that the steps taken by the
Company to prevent misappropriation or infringement of our IP will
be successful.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">An
inability to protect our IP would make it possible for competitors
to offer similar products and services that could have a material
adverse effect on our business, financial condition and results of
operations.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">
We experience operational hazards in our flight operations that may
subject us to potential claims in the event that an incident or
accident occurs.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">We
experience operational hazards in our flight operations that may
subject us to potential claims in the event that an incident or
accident occurs.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">The
flight operations of SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font>
surveys are subject to the hazards associated with general flight
operations. An aircraft accident may cause personal injury and loss
of life, as well as severe damage to and destruction of property or
the SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font>
sensors and related equipment.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Independent
third parties provide all the services required to maintain and
operate the aircraft; they bear the primary risks of flight
operations. These services are provided by an organization
accredited by Transport Canada to operate aircraft in accordance
with Transport Canada approved and audited operating procedures.
The aircraft operator employs the required pilots, aircraft
maintenance engineers and support personnel and ensures that they
operate within their Transport Canada operating certificate. Our
employees do not perform any airworthiness or flight safety
operations.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">We
require the flight contractor to maintain appropriate insurance
coverage for the risks associated with aircraft operations and we
obtain insurance coverage to provide us with additional risk
protection. In addition, we maintain general business insurance
coverage, and believe that this insurance and the policy limits are
appropriate for the operational risks that we incur.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
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<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Despite
our policy to not operate the aircraft directly and our insurance
coverage, we cannot avoid or alternatively be insured for all risks
of flight operations. In the event of an incident or accident we
may be sued by injured parties in excess of our policy limits or
for damages that are not covered by our insurance policy. The
magnitude of a lawsuit of this nature is not determinable.
Furthermore, to the extent that our SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font>
equipment is damaged, we may be unable to conduct SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font>
surveys for several months following an accident.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">
We are a Canadian Company and our nationality may impair the
enforceability of a judgment for any person resident outside
Canada.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Since
we are a Canadian company and most of our assets and key personnel
are located in Canada, you may not be able to enforce a U.S.
judgment for claims you may bring against us, our assets, our key
personnel or many of the experts named in this document. This may
prevent you from receiving compensation to which you may otherwise
have a claim.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">We are
organized under the laws of Alberta, Canada and substantially all
of our assets are normally located in Canada. In addition, all but
two of our current members of our Board of directors and all of our
officers are residents of Canada. As a result, it may be impossible
for you to affect service of process upon us or these individuals
within the U.S. or to enforce any judgments in civil and commercial
matters, including judgments under U.S. federal securities laws. In
addition, a Canadian court may not permit you to bring an original
action in Canada or to enforce in Canada a judgment of a U.S. court
based upon civil liability provisions of the U.S. federal
securities laws.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">
We conduct operations in foreign countries, which exposes us to
several risks that may have a material adverse effect on the
Company.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">We
conduct operations in foreign countries, which exposes us to
several risks that may have a material adverse effect on the
Company.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Criminal
Activity and Social Instability &#x2013; We have operated in the
past in foreign countries such as Colombia, which over the past two
decades experienced significant social upheaval and criminal
activity relating to drug trafficking, kidnapping and terrorist
acts. While the situation has improved dramatically in recent
years, there can be no guarantee that the situation will not
deteriorate again, nor are these risks eliminated as yet.
Furthermore, other potential international survey locations may
have similar or other indeterminate criminal or social instability
risks.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Systemic
criminal activity in a country or isolated criminal acts may
disrupt operations, impact our ability to earn revenue,
dramatically add to our cost of operations or potentially prevent
us from earning any survey revenue in a country.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">In
addition, foreign markets may be susceptible to a higher risk of
corruption and bribery. All of NXT&#x2019;s employees, contractors
and independent sales agents are required to adhere to the
Company&#x2019;s code of conduct and business ethics, which
prohibits illegal activities, including any acts of bribery or
corruption.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Political
Instability - Any changes in regulations or shifts in political
attitudes are beyond the control of the Company and may adversely
affect our business. Exploration may be affected in varying degrees
by government regulations which have the effect of restricting
exploration and production activities. These changes may adversely
impact the laws and policies governing price controls, export
controls, foreign exchange controls, income taxes, expropriation of
property, environmental legislation, site safety or other
areas.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Currently,
there are no restrictions (other than the payment of local
with-holding taxes) on the repatriation back to Canada of our
earnings in foreign countries in which we have operated, such as
Colombia and Bolivia; however, there can be no assurance that
significant restrictions on repatriation to Canada of earnings will
not be imposed in the future.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Our
operations may also be adversely affected by changes in laws and
policies in Canada impacting foreign travel and immigration,
foreign trade, taxation and investment.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Commercial
Disputes &#x2013; While operating in a foreign country, we are
subjected to local commercial laws which often involve executing
contracts in a foreign language. Although every effort is made to
ensure we have access to an accurate English translation,
misunderstanding and potential disputes between parties may
arise.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
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<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">In the
event of a dispute arising in connection with our foreign
operations for any reason, we may be subject to the exclusive
jurisdiction of foreign courts or may not be successful in
subjecting foreign persons to the jurisdictions of the courts of
Canada or enforcing Canadian judgments in such other jurisdictions.
We may also be hindered or prevented from enforcing our rights with
respect to a government instrumentality because of the doctrine of
sovereign immunity.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Accordingly,
these risk factors have the potential of adversely reducing the
level of survey revenue from our clients, our ability to operate
effectively or our ability to be paid for our services and may have
a material adverse effect on our financial position.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Where
possible, NXT utilizes risk mitigation products offered by entities
such as Export Development Canada (&#x201C;EDC&#x201D;). EDC
financial products include insurance coverage of contract accounts
receivable, guarantee support for contract performance bonds and
wrongful call insurance for such bonds.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">
We rely upon the right to conduct airborne surveys in foreign
countries. These foreign operations expose us to the risks that we
will be prevented from conducting surveys when requested by
clients.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">The
operation of our business, namely conducting aerial SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font>
surveys and interpreting SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font>
data, is not subject to material governmental or environmental
regulation in Canada and the United States with the exception of
flight rules issued by Transport Canada and the U.S. Federal
Aviation Administration (&#x201C;FAA&#x201D;) governing the use of
commercial aircraft, including rules relating to low altitude
flights. The requirements in other countries vary greatly and may
require permits and/or provide other restrictions to conducting
flight operations in the country that may restrict our ability to
perform SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font>
surveys.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">For
example, in South American countries in which we have operated,
such as Colombia and Bolivia, SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font>
surveys must comply with additional requirements not encountered in
Canada and the United States, including customs obligations and
bonds related to the importation and exportation of the aircraft
into the country, obtaining permits from the local aviation
authority and obtaining permits from the local Air Force. We have
successfully operated in South America and other global regions in
accordance with these typical requirements.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">With
our North America and International experience to date, we do not
anticipate any government controls or regulations that will prevent
timely completion of SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font>
surveys. However, we may encounter government restrictions in other
countries that may impact or restrict our ability to conduct
surveys.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">If we
encounter government regulation and restrictions that impact or
prevent us from conducting surveys in any country, then we will not
be able to earn revenue in the country and we may be exposed to
forfeiting any performance bonds which may have been
issued.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">
We caution that the factors referred to above and those referred to
as part of particular forward-looking statements may not be
exhaustive and that new risk factors emerge from time to time in
our rapidly changing business environment.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="display: table; margin-left: 48px">
<div style="display: table-row">
<div style="display: table-cell; width: 84px"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px"><a name="_Toc449704248"><!--anchor--></a>ITEM 4.&#xA0;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">INFORMATION
ON THE COMPANY</font></div>
</div>
</div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="display: table">
<div style="display: table-row">
<div style="display: table-cell; width: 48px"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">A.&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">History
and development of the Company.</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">We are
a technology company focused on providing a service to oil and
natural gas exploration clients using our proprietary
SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font>
remote sensing airborne survey system. SFD<font style="font-size: 70%; vertical-align: top">&#xAE;</font> and
NXT<font style="font-size: 70%; vertical-align: top; font-family: Times New Roman">&#xAE;</font>
are both registered trademarks of NXT Energy Solutions
Inc.</font></div>
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<div id="pn" style="text-align: center"><font style="font-family: Times New Roman; font-size: 13px">16</font></div>
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<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">NXT&#x2019;s
corporate history is summarized as follows:</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="margin-left: 24px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">NXT was
incorporated under the laws of the State of Nevada on September 27,
1994 as Auric Mining Corporation.</font></div>
</div>
</div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="margin-left: 24px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">In January 1996,
NXT acquired all of the common stock of NXT Energy USA, Inc. (which
was then known as Pinnacle Oil Inc.) from its shareholders in
exchange for common shares. As a consequence of this reverse
acquisition, NXT Energy USA Inc. became a wholly owned subsidiary
and its shareholders acquired a 92% controlling interest in
NXT&#x2019;s common shares.</font></div>
</div>
</div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="margin-left: 24px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">Prior to this
reverse acquisition transaction, NXT was a corporate shell
conducting no active business, and NXT Energy USA Inc. was a
development stage research and development enterprise holding the
worldwide rights to use what is now our SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font>
technology for hydrocarbon exploration purposes.</font></div>
</div>
</div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="margin-left: 24px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">Shortly thereafter,
on February 23, 1996 we changed our name to Pinnacle Oil
International, Inc. and on June 13, 2000, subsequently changed our
name to Energy Exploration Technologies.</font></div>
</div>
</div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="margin-left: 24px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">On October 24,
2003, our shareholders approved the continuance of the Company from
the State of Nevada to the Province of Alberta, Canada under the
Business Corporations Act (Alberta) (the &#x201C;ABCA&#x201D;). Also,
our name was modified to Energy Exploration Technologies Inc.
(&#x201C;EETI&#x201D;).</font></div>
</div>
</div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="margin-left: 24px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">On September 22,
2008 EETI changed its name to NXT Energy Solutions Inc. by way of
Articles of Amendment filed pursuant to the ABCA.</font></div>
</div>
</div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Our
registered office is located at 302,&#xA0;3320 &#x2013;
17<font style="font-size: 70%; vertical-align: top">th</font> AVE
SW, Calgary, Alberta, Canada, T3E 0B4 and our telephone number is
(403)&#xA0;264-7020.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">We are
a reporting issuer in Alberta, Ontario, and British Columbia and
are principally governed by the Alberta Securities Commission in
accordance with the <font style="font-style: italic">Securities Act
(Alberta)</font> and the <font style="font-style: italic">Business
Corporations Act (Alberta).</font> We are a foreign private issuer
under United States securities laws and are subject to the
regulation of the US Securities in accordance with the Exchange
Act.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">The
underlying technology employed by our SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font>
survey system was invented by Mr. Liszicasz, our President and CEO,
chairman and largest shareholder. The technology was initially
licensed to the Company by Mr. Liszicasz until December 31, 2006
through a series of consecutive license agreements. On December 31,
2006, we obtained the rights to the technology from Mr. Liszicasz
pursuant to the terms of the TTA.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Upon
execution of the TTA, Mr. Liszicasz transferred to us all his
rights and entitlements to the SFD<font style="font-size: 70%; vertical-align: top">&#xAE;</font> technology for
use in the field of hydrocarbon exploration.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font>
technology for the purposes of the TTA is defined as the theories
of quantum physics and engineering which are utilized in the
operation of stress field detectors used by NXT for the reception,
collection and recording of subsurface geological stresses for
hydrocarbon exploration.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Our
business does not normally rely on significant capital expenditures
other than period regulatory additions for the aircraft. As
described in below in &#x201C;<font style="text-decoration: underline">Property and equipment and related
amortization expense&#x201D;</font> a significant expenditure was
incurred for acquiring and installing in its aircraft a new
transponder technology known as ADS-B. For 2020 we do not
anticipate further significant upgrades for the aircraft. For the
last three fiscal years, the Company made capital expenditures for
property and equipment of $216,691 (2019), $10,006 (2018), and
$8,727 (2017). These annual expenditures normally relate largely to
upgrades to office computer equipment and SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font>
survey equipment.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">The
Company does not currently have any significant capital
expenditures in progress, or planned for the short term, for Canada
or other international operations.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">SEC
maintains an internet site (http://www.sec.gov), which contains
reports, proxy and information statements, and other information
regarding NXT that we file electronically with the SEC. Our website
is http://www.nxtenergy.com.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
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<div style="display: table-cell; width: 48px"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">B.&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">Business
overview.</font></div>
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Description of the nature of the Company&#x2019;s operations and
principal activities</font></div>
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<font style="font-family: Times New Roman; font-size: 13px">We
utilize our proprietary, airborne SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font>
survey system to provide a service for the oil and gas exploration
industry. NXT provides a rapid and cost-effective method for our
clients to evaluate large land areas for their exploration
potential.</font></div>
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<font style="font-family: Times New Roman; font-size: 13px">The
underlying technology employed by our SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font>
survey system was invented by Mr. Liszicasz, our President and
Chief Executive Officer (&#x201C;CEO&#x201D;), Chairman and one of
our largest shareholders. The technology was initially licensed to
the Company by Mr. Liszicasz until December 31, 2006 through a
series of consecutive license agreements. On December 31, 2006 we
obtained the rights to the technology from Mr. Liszicasz pursuant
to the terms of a Technology Transfer Agreement
(&#x201C;TTA&#x201D;).</font></div>
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<font style="font-family: Times New Roman; font-size: 13px">Upon
execution of the TTA, Mr. Liszicasz transferred to NXT all his
rights and entitlements to the SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font></font></font>
technology for use in the field of hydrocarbon
exploration.</font></div>
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<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">For
further details of the TTA, see &#x201C;Section 10.1&#x201D;
below.</font></div>
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<font style="font-family: Times New Roman; font-size: 13px">SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font>
technology for the purposes of the TTA is defined as the theories
of quantum physics and engineering which are utilized in the
operation of stress field detectors used by NXT for the reception,
collection and recording of subsurface geological stresses for
hydrocarbon exploration.</font></div>
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<font style="font-family: Times New Roman; font-size: 13px">SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font>
sensors remotely respond to gravity perturbations and changes in
subsurface stress regimes that are meaningful for oil and gas
exploration. These responses are captured as raw data that when
interpreted, can provide an indirect method to detect the presence
of geological features such as structures, faults, fractures and
reefs that are often associated with traps and reservoir
accumulations. SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font>
is highly effective in frontier and under-explored areas, in
offshore or onshore environments and over any terrain. The
SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font>
survey system has been demonstrated to quickly focus exploration
resources, offering the benefit of reducing the risk, time and
expense associated with frontier exploration.</font></div>
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<font style="font-family: Times New Roman; font-size: 13px">Following
completion of the aerial surveys, we deliver to our clients a
detailed report and maps of the surveyed area that identifies,
ranks and recommends areas with SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font></font></font>
indications of reservoir potential.</font></div>
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<font style="font-family: Times New Roman; font-size: 13px">In
2006, we commenced our current business model and began providing
SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font>
survey services to clients on a fee-for-service basis. In
accordance with this model, we have not invested either directly or
indirectly in exploration or development wells or engaged in other
exploration or production activities. Our current business model
minimizes our capital requirements, thereby conserving cash and
minimizes any perceived or real conflicts between the interests of
NXT and its survey clients.</font></div>
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<font style="font-family: Times New Roman; font-size: 13px">NXT&#x2019;s
primary business model is to earn revenues by conducting
SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font>
surveys for clients on a fee-for-service basis. Secondly, we may be
able to negotiate to earn revenue from gross overriding royalty
income and/or other incentive fees from clients should they
generate production on areas recommended by SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font>
surveys. Finally, in the future, we may earn a fee by providing
other related geological and geophysical integration services to
clients.</font></div>
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<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">We also
continue to utilize high quality local sales representatives with
key knowledge of their respective areas, potential clients and the
exploration potential of a region allowing NXT to cover larger
areas and more clients with minimum fixed cost. Our sales
representatives continue to pursue SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font></font></font>
opportunities in numerous regions including Latin America, the
Middle-East and Southeast Asia. Furthermore, to ensure our sales
representatives follow industry best practices, each representative
is required to annually certify they adhere to NXT's code of
conduct and business ethics.</font></div>
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<font style="font-family: Times New Roman; font-size: 13px">In
support of these sales efforts, NXT has also been effective in
positioning the SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font>
method as an established geophysical tool for oil &amp; gas
exploration following the successful completion of projects in
Latin America (Bolivia and Mexico) with the publication of
technical papers and the creation of project case studies. In
addition, NXT has now been granted patents or received patent
allowance in 48 separate countries.</font></div>
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<font style="font-family: Times New Roman; font-size: 13px">Our
overall objective remains to continue to increase industry
awareness and appreciation of the value of our SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font>
survey system and our strategy to achieve this includes maximizing
client endorsement opportunities (such as through joint case
studies) and targeting the most appropriate markets (i.e. where
SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font>
provides the maximum benefits). Our specific tactics
include:</font></div>
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<font style="font-family: Times New Roman; font-size: 13px">1.</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">Focus sales
resources on high profile primary markets which offer the maximum
opportunity for success;</font></div>
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<font style="font-family: Times New Roman; font-size: 13px">2.</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">Build upon success
in this initial market, and step out to other markets in Latin
America, and in South Asia;</font></div>
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<font style="font-family: Times New Roman; font-size: 13px">3.</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">Pursue requests of
interest from qualified potential client "bluebirds" from all other
locations in the world. The bluebird model is defined as an
opportunity that arises, not from deliberate targeted sales
initiatives, but in response to unsolicited client
enquiries;</font></div>
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<font style="font-family: Times New Roman; font-size: 13px">4.</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">Continue to conduct
pilot surveys to expand our knowledge base and provide
documentation to support the use of SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font>
in new applications. Each new application opens more market
opportunities and provides valuable case studies to support our
sales initiatives; and</font></div>
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<font style="font-family: Times New Roman; font-size: 13px">5.</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">Respond to
opportunities to present at technical conferences, publish papers
in periodicals and generally maximize our opportunities to educate
the industry on SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font>
capabilities and document case study successes.</font></div>
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<font style="font-family: Times New Roman; font-size: 13px">We
continue to progress and grow our project pipeline on a Fee for
Survey Project basis. NXT has concurrently sought the development
of an alternative business line though the sale of
&#x201C;Multi-Client Datasets&#x201D; focused on IOCs and the
development of their global exploration strategies. The purpose of
this strategy has been to integrate our SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font>
technology into the standard exploration process of such
organizations. We believe this approach will be instrumental in
helping NXT to build an independent and steady backlog of smaller
scale data sales enabling us to enhance and smooth our revenue flow
while we continue to execute on larger Fee for Survey
Projects.</font></div>
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<font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">
Description of the principal markets in which the Company
competes</font></div>
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<font style="font-family: Times New Roman; font-size: 13px">We have
an opportunity to provide our services in any region of the world
where oil and gas exploration activities are conducted. However, we
choose to be strategic and focus our limited marketing and sales
resources in a limited number of markets in the early stages of
commercialization.</font></div>
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<font style="font-family: Times New Roman; font-size: 13px">A
summary of revenues derived in our primary geographic market
segments for the last 3 fiscal years, and highlights of global
survey operations, follows:</font></div>
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Year ended December 31</font></div>
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<div><font style="font-family: Times New Roman; color: rgb(0, 0, 0); font-weight: bold;">
2019</font></div>
</font><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font></div>
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<div><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; border-bottom: 1px solid rgb(0, 0, 0); display: inline-block; font-weight: bold; font-size: 11px;">
<div><font style="font-family: Times New Roman; color: rgb(0, 0, 0); font-weight: bold;">
2018</font></div>
</font><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font></div>
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<div><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; border-bottom: 1px solid rgb(0, 0, 0); display: inline-block; font-weight: bold; font-size: 11px;">
<div><font style="font-family: Times New Roman; color: rgb(0, 0, 0); font-weight: bold;">
2017</font></div>
</font><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font></div>
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<div style="text-align: justify; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">African
and Middle East Markets</font></div>
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<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">$</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">11,976,149</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
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<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">$</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
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<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">$</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
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<div style="text-align: justify; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">South
and Central America</font></div>
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<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
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<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
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<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
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<td style="vertical-align:bottom;width:64%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">North
America</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
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<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
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<td style="vertical-align:bottom;width:64%;">
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</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; font-family:Times New Roman;vertical-align:bottom;font-size:13px;display:inline-block;width:5%;border-bottom:solid 1px #000000;">&#xA0;</font><font style="text-align: right; font-family:Times New Roman;vertical-align:bottom;font-size:13px;display:inline-block;width:75%;border-bottom:solid 1px #000000;">&#xA0;</font><font style="text-align: left; font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; font-family:Times New Roman;vertical-align:bottom;font-size:13px;display:inline-block;width:5%;border-bottom:solid 1px #000000;">&#xA0;</font><font style="text-align: right; font-family:Times New Roman;vertical-align:bottom;font-size:13px;display:inline-block;width:75%;border-bottom:solid 1px #000000;">&#xA0;</font><font style="text-align: left; font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; font-family:Times New Roman;vertical-align:bottom;font-size:13px;display:inline-block;width:5%;border-bottom:solid 1px #000000;">&#xA0;</font><font style="text-align: right; font-family:Times New Roman;vertical-align:bottom;font-size:13px;display:inline-block;width:75%;border-bottom:solid 1px #000000;">&#xA0;</font><font style="text-align: left; font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td style="vertical-align:bottom;width:64%;">
<div style="margin-left:0px;padding-bottom:1px;"><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">$</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">11,976,149</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">$</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">$</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
</tr></table>
</div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="text-decoration: underline; font-family: Times New Roman; font-size: 13px">
North America Market</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">In
February 2019, NXT entered into a Co-operative Agreement with one
of its largest shareholders, Alberta Green Ventures Limited
Partnership (&#x201C;AGV&#x201D;), to propose up to three
SFD<font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font></font>
surveys within two years. The Co-operative Agreement is based on a
cost plus formula and a gross overriding royalty interest in oil
and gas production arising on lands subject to the
surveys.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Under
the Co-operative Agreement, NXT and AGV will consider at least two
SFD<font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font></font>
surveys in North America and an additional SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font>
survey internationally. The first SFD<font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font></font>
survey was contemplated to be completed by August 31, 2019 and the
fees payable by AGV are partially secured by a US$100,000
non-refundable deposit. NXT has granted AGV an extension of the
August 31, 2019 requirement under the Co-operation Agreement to
complete at least one of three SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font>
survey to June 30, 2020. If the survey is not completed by June 30,
2020, the non-refundable deposit will be forfeited to NXT. AGV has
committed to completing an exploration drilling program on each of
the lands subject to the SFD<font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font></font></font></font>
surveys within two years of completion of the surveys.</font></div>
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<div id="pn" style="text-align: center"><font style="font-family: Times New Roman; font-size: 13px">19</font></div>
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<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="text-decoration: underline; font-family: Times New Roman; font-size: 13px">
Latin America and Central America Markets</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">NXT
completed the data acquisition and interpretation of 37,596 line-km
for the first ever SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font>
Multi-Client survey in the Gulf of Mexico in June 2017. The
airborne survey was conducted over the area that was identified by
National Hydrocarbon Commission (&#x201C;CNH&#x201D;) for the shallow
water bid round 2.1 covering the Tampicao-Misantla, Veracruz and
Cuencas del Sureste exploration areas. The survey data provides
100% grid coverage over the offshore blocks offered in Bid Round
2.1, an area of approximately 8,900 square kilometers and was
completed ahead of time and budget. In addition, NXT acquired
incidental data over many of the 35 blocks offered in the recently
concluded Bid Round 3.1. Based on the Five-Year Tender Program for
the Exploration and Extraction of Hydrocarbons 2015 - 2019 by the
Mexican Secretary of Energy, much of the remaining data will also
be applicable to future Bid Rounds. To date, there have been no
sales of this proprietary data.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Recently
with respect to our 2017 SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font>
Gulf of Mexico survey over the 2.1 bid-round offshore blocks, a
lead area, indicated by SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font>
as prospective, has now been drilled by third parties and the
results confirm that it is a commercial discovery with early
estimates of volumes greater than 200 million barrels of oil
equivalent (&#x201C;MMBOE&#x201D;). Additionally, and perhaps more
importantly, from a capital expenditure allocation perspective,
another seismic prospect, considered non-prospective by NXT, was
drilled as part of the same campaign and was declared unsuccessful.
The announcements concerning these drilling activities was reported
by internationally recognized upstream data providers starting late
2019. The SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font>
data for the 2.1 bid-round offshore blocks was submitted to and has
been available from the CNH of Mexico since mid-2018. These results
highlight the value of adding SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font>
to an upstream work program and evidences the efficacy of our
geophysical method in recommending prospects with potential for
hydrocarbon traps. Drilling activities over SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font>
recommendations are ongoing in numerous countries.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="text-decoration: underline; font-family: Times New Roman; font-size: 13px">
Asia Markets</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">In
October 2018, we signed an MOU with BGP Inc., a subsidiary of China
National Petroleum Corporation, to further explore opportunities
for NXT and BGP Inc. to work together. NXT&#x2019;s forward strategy
is to secure SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font>
contracts with BGP and its affiliates. In addition a distribution
agreement has been signed for Malaysia.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="text-decoration: underline; font-family: Times New Roman; font-size: 13px">
African and Middle East Markets</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">In
March 2019, the Company signed an US$8.9 million contract with PE
to provide 5,000 line kilometers of SFD<font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font></font>
surveys
in Nigeria. As the Nigerian SFD<font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font></font>
Survey was the Company's first project in Africa, the Company was
required to deliver more than 10,000 pages of documents to NNPC and
the Department of Petroleum Resources, a department under Nigeria's
Ministry of Petroleum Resources, and complete a test flight as part
of the qualification process which took seven months. Data
acquisition operations were completed on May 1, 2019 and NXT's
recommendations were delivered in the third quarter of
2019.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px"><font style="color: #262626">
Prior to entering into the</font> Nigerian SFD<font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font></font>
Survey <font style="color: #262626">contract with PE, the
Company</font> conducted significant due diligence to ensure it
understood the business environment in Nigeria and was in
compliance with applicable laws in each of Canada, the United
States of America and Nigeria. The Company also engaged Norton Rose
Fulbright Canada LLP and Kreller Group as advisors to provide
guidance and to ensure the integrity of its contract with PE, as
well as PE's contract with NNPC.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">The
Company has received payments of US$8.4 million for the Nigerian
SFD<font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font></font>
Survey as at the date hereof. The contracted holdback amount of
approximately US$0.5 million is should be paid to the Company upon
the conclusion of negotiations for additional work under the
current contract framework.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">The
Department of Petroleum Resources (the "DPR"), a department under
the Federal Republic of Nigeria's Ministry of Petroleum Resources
responsible for the sustainable development of Nigeria's oil and
gas resources, provided written confirmation of their
recommendation in favour of NXT's SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font>
technology based on the recent survey results, noting specifically
"in line with federal government aspiration to increase its Oil and
Gas reserves base at a considerable reduced cost, risk and optimize
exploration cycle, the Stress Field Detection SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font>
technology is hereby adopted and recommended to be deployed as an
independent data exploration tool for hydrocarbon exploration to
identify and rank prospect-level leads to focus exploration efforts
in the Nigerian Oil and Gas industry".</font></div>
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<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div id="pn" style="text-align: center"><font style="font-family: Times New Roman; font-size: 13px">20</font></div>
</div>
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<div style="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">In
March 2020, the Company signed a memorandum of understanding with
an independent oil company with interests in East-Central
Africa.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-weight: bold; font-style: italic; font-family: Times New Roman; font-size: 13px">
Notes Receivable</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">In
September 2019, NXT advanced to AGV US$250,000 (&#x201C;the
Principal Amount&#x201D;), as evidenced by, and governed in
accordance with the terms of, a promissory note dated September 6,
2019 (the "Notes Receivable"), for the purpose of providing AGV
with additional funds necessary to continue advancing the common
objectives of NXT and AGV under the Co-operation Agreement (the
&#x201C;Loan Arrangement&#x201D;). Pursuant to the Notes Receivable,
it was agreed and acknowledged, among other things,
that:</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="margin-left: 12px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="color: #000000; font-family: Times New Roman; font-size: 13px">a)</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px"><font style="color: #000000; background-color: #FFFFFF">AGV was indebted to the
Company and unconditionally promised to pay to, or to the order of,
the Company on or before December 15, 2019 (the</font>
"<font style="color: #000000; background-color: #FFFFFF">Repayment
Date</font>"<font style="color: #000000; background-color: #FFFFFF">), the Principal Amount
together with all interest payable at a rate of the greater of 2%
and the rate prescribed under the</font> <font style="font-style: italic; color: #000000; background-color: #FFFFFF">Income
Tax Act</font> <font style="color: #000000; background-color: #FFFFFF">(Canada) from time to
time in monthly arrears on the first day of each month commencing
October 1, 2019 until the repayment of the Principal Amount in full
(the</font> "<font style="color: #000000; background-color: #FFFFFF">Interest</font>"<font style="color: #000000; background-color: #FFFFFF">);</font></font></div>
</div>
</div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="margin-left: 12px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="color: #000000; font-family: Times New Roman; font-size: 13px">b)</font></div>
<div style="text-align: justify; display: table-cell"><font style="color: #000000; background-color: #FFFFFF; font-family: Times New Roman; font-size: 13px">
AGV had the right and privilege of prepaying the whole or any
portion of the Principal Amount together with the Interest at any
time or times without notice, bonus or penalty; and</font></div>
</div>
</div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="margin-left: 12px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="color: #000000; font-family: Times New Roman; font-size: 13px">c)</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px"><font style="color: #000000; background-color: #FFFFFF">NXT, in its sole and
absolute discretion, was entitled to elect to receive any payment
made by AGV in accordance with the Notes Receivable by way of, in
whole or in combination: (i) wire transfer or other immediately
available funds (</font>"<font style="color: #000000; background-color: #FFFFFF">Cash</font>"<font style="color: #000000; background-color: #FFFFFF">),
or (ii) delivery for cancellation to the Company of the equivalent
number of Common Shares having a fair market value equal to the
aggregate of such amounts, calculated using the volume weighted
average price of the Common Shares as reported and traded on the
Toronto Stock Exchange for the five trading days immediately
preceding the repayment date (the</font> "<font style="color: #000000; background-color: #FFFFFF">5-day
VWAP</font>"<font style="color: #000000; background-color: #FFFFFF">).</font></font></div>
</div>
</div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">On
December 13, 2019, the last business and trading day before the
Repayment Date, the Company elected to receive and directed AGV
to:</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="margin-left: 12px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="color: #000000; font-family: Times New Roman; font-size: 13px">a)</font></div>
<div style="text-align: justify; display: table-cell"><font style="color: #000000; background-color: #FFFFFF; font-family: Times New Roman; font-size: 13px">
in respect of the Principal Amount, deliver to the Company for
cancellation 543,673 Common Shares, calculated as the product of
US$250,000 being the Principal Amount owing on the last business
day before the Repayment Date, and 1.3183, being the daily average
US$/CDN$ exchange rate as quoted on the Bank of Canada's website
for December 13, 2019, the last business day for which a daily
average exchange rate was published before the Repayment Date,
divided by $0.6062, being the 5-day VWAP, the delivery of such
Common Shares to occur subject to and only upon receipt of
confirmation from the Company that all necessary regulatory
approvals had been received; and</font></div>
</div>
</div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="margin-left: 12px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="color: #000000; font-family: Times New Roman; font-size: 13px">b)</font></div>
<div style="text-align: justify; display: table-cell"><font style="color: #000000; background-color: #FFFFFF; font-family: Times New Roman; font-size: 13px">
in respect of the Interest, pay US$1,366.12 by way of Cash. AGV
paid this amount.</font></div>
</div>
</div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 12px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">On
April 13, 2020, NXT issued a Direction to Pay to AGV in which NXT
has revoked the previous Direction to Pay dated December 13, 2019,
and has now directed AGV to deliver US$250,000 as repayment on the
Principle Amount. Interest will begin to accrue until the date on
which payment in full of all amounts owing pursuant to the
Principle Amount are received by NXT.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">The
Company may change its election if it so decides, in its sole and
absolute discretion to receive the Principal Repayment by way of
Common Shares by application to the Alberta Securities
Commission.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
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<div id="pn" style="text-align: center"><font style="font-family: Times New Roman; font-size: 13px">21</font></div>
</div>
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<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">
Description of seasonality of the Company&#x2019;s main
business</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">There
is no seasonality to our business. NXT does however, have a very
cyclical business, as revenue activity is dependent upon the level
of capital investment in exploration drilling in the oil &amp; gas
industry and the size and timing of a limited number of survey
contracts each year.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">
Description of the sources and availability of raw
materials</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">We do
not foresee any constraints upon materials or equipment that will
impede our ability to execute our business plan or affect our
ability to conduct and/or expand our business. Our main direct
project input costs are aircraft operating costs and data
interpretation staff. None of these expenses have been subject to
significant price volatility.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">In
order to conduct our survey operations, we require the
following:</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="margin-left: 24px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-weight: bold; font-style: italic">Survey aircraft</font>
&#x2013; Historically, we have both owned aircraft and chartered
aircraft from independent charter aircraft companies. From 2009 to
December 2015, we utilized an aircraft charter agreement with Air
Partners, a Calgary-based air-charter operator, to provide
aircraft, crew and maintenance services for our survey operations
worldwide In December 2015, we acquired from Air Partners a jet
aircraft which was previously charter hired to NXT. In April 2017,
NXT completed a sale and leaseback agreement of its aircraft with a
Calgary based international aircraft services organization. The
terms of the agreement resulted in NXT selling its&#x2019; 1997
Cessna Citation Ultra 560 jet aircraft. We currently rely on Air
Partners as the manager / operator of the aircraft which we use in
SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font></font></font>
survey operations.</font></div>
</div>
</div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="margin-left: 24px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-weight: bold; font-style: italic">SFD<font style="font-size: 70%; vertical-align: top">&#xAE;</font> sensors</font>
- All of the survey sensors are manufactured in-house. Certain
machining is required by third party machine shops, with final
assembly performed by our technical staff. The sensors, once
assembled, require flight testing prior to being considered
acceptable for operational use. Not all sensors meet the
performance criteria for operational use; however, we have
demonstrated our ability to manufacture new functional
SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font></font></font>
sensors.</font></div>
</div>
</div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="margin-left: 24px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-weight: bold; font-style: italic">SFD<font style="font-size: 70%; vertical-align: top">&#xAE;</font> assembly</font>
- The units in which the sensors are incorporated are custom
designed, fabricated and assembled in-house or through
subcontracted vendors. We utilize the services of Transport Canada
approved Design Approval Representatives to prepare subsequent type
certificates (&#x201C;STC&#x201D;) for the installation of our
SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font></font></font>
units in each aircraft that we utilize for surveys. The time to
obtain an STC approval for the installation of our SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font></font></font>
units into any proposed aircraft type may require several
months.</font></div>
</div>
</div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="margin-left: 24px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-weight: bold; font-style: italic">Computer hardware and
software</font> - (<font style="font-style: italic">Data
Acquisition System, SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font></font></font>
Signal Conditioning Unit</font>, and data <font style="font-style: italic">Interpretation software).</font> During 2016,
a new data acquisition system completed final testing. The software
was developed by in-house personnel and will be utilized on future
surveys. The hardware we use in our SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font></font></font>
survey systems (other than the SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font></font></font>
unit), and the balance of the computer software we use, are all
readily available from retail or wholesale sources.</font></div>
</div>
</div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">We are
not dependent upon any other third-party contract manufacturers or
suppliers to satisfy our technology requirements.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">
Description of marketing channels</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">We
largely use direct sales methods with use of independent
commissioned sales representatives in international
markets.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">
Summary information on dependence on patents, licenses and
contracts</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">
Patents</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">In May
2012, we commenced a &#x201C;provisional&#x201D; patent application
process in the U.S. and formally filed a patent on May 22, 2013,
which was subsequently published on November 28, 2013. We intend to
continue expanding the process with additional formal patent
applications in the future. We understand that our right to patent
the SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font></font></font>
technology is not compromised by our ongoing commercial use of the
technology, as the components of the SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font></font></font>
technology have never been disclosed to third parties (except under
very limited and confidential terms) or released in any manner into
the public domain.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
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<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div id="pn" style="text-align: center"><font style="font-family: Times New Roman; font-size: 13px">22</font></div>
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<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Initiatives
to expand and protect our IP (including patenting and new R&amp;D
initiatives) were very successful in 2017. Squire Patton Boggs LLP,
a U.S. based leader in IP protection, has been advising NXT on our
IP strategy, including the prior filing of an initial US
provisional patent application in May 2012. In November 2014, NXT
filed a related patent amendment submission in the US and since
that time has undertaken new patent applications in select
strategic international markets.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px"><font style="color: #000000">
SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font></font></font>
patents have been granted in Russia (January 2017), Japan (July
2017), Canada (August 2017), Mexico (September 2017), U.S.
(November 2017 and September 2018), China (April 2018), and
European Patent Office consisting of 38 member states (January
2020). These are areas of prime commercial focus for the
Company.&#xA0;</font> <font style="color: #262626">So far, the
total number of countries granting the patent has reached 44.&#xA0;
The immediate next step is the validation of the patents in select
European countries.&#xA0; This process is expected to take several
month to complete.</font> <font style="color: #000000">&#xA0;Our
patents serve an important purpose beyond the protection for the
proprietary SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font></font></font>
technology.&#xA0;</font> They also provide multiple independent
third-party recognitions of the technological invention in terms of
the practical applicability, conceptual novelty, and knowledge
advancement.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">
<font style="color: #333333">Basis for statements made
regarding</font> competitive position</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Our
SFD<font style="font-size: 70%; vertical-align: top">&#xAE;</font>
airborne survey service is based upon a proprietary technology,
which is capable of remotely identifying, from a survey aircraft,
subsurface anomalies associated with potential hydrocarbon traps
with a resolution that we believe is technically superior to other
airborne survey systems. To our knowledge there is no other company
employing technology comparable to our SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font></font></font>
survey system for oil and natural gas exploration.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Seismic
is the standard technology used by the oil &amp; gas industry to
image subsurface structures. It is our view that the
SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font></font></font></font>
survey system is highly complementary to seismic analysis. Our
system may reduce the need for seismic in wide-area reconnaissance
but will not replace the role of seismic in verifying structure,
closure and selecting drilling locations. The seismic industry is
very competitive with many international and regional service
providers.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">The
SFD<font style="font-size: 70%; vertical-align: top">&#xAE;</font>
system can be used as a focusing tool for seismic. With an
SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font></font></font>
survey a large tract (i.e. over 5,000 square kilometers) of land
can be evaluated quickly to identify locations with indications of
reservoir potential. Seismic surveys, although effective in
identifying these locations, are much more expensive, require
significantly more time and impose a much greater negative impact
on local communities and the environment. An SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font></font></font>
survey deployed first can provide necessary information to target a
seismic program over a limited area of locations selected by
SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font></font></font>.
This approach can result in a more effective seismic program and
reduce the overall cost, time, community resistance and
environmental impact required to locate and qualify a
prospect.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">The
industry uses other technologies for wide area oil and natural gas
reconnaissance exploration, such as aeromagnetic and gravity
surveys. These systems can provide regional geological information,
such as basement depth, sedimentary thickness and major faulting
and structural development; however, these other airborne
techniques are not as suitable for identifying areas with reservoir
potential as the SFD<font style="font-size: 70%; vertical-align: top">&#xAE;</font>
system.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">
Description of material effects of governmental &amp; environmental
regulation</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 48px; margin-right: 0px; text-indent: -48px">
<font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">SFD<font style="font-size: 70%; vertical-align: top">&#xAE;</font>
Survey Flight Operations</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">The
operation of our business, namely conducting aerial SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font></font></font>
surveys and interpreting SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font></font></font>
data, is not subject to material governmental or environmental
regulation in Canada and the U. S. with the exception of flight
rules issued by Transport Canada and the Federal Aviation Authority
governing the use of commercial aircraft, including rules relating
to low altitude flights. The requirements in other countries vary
greatly and may require permits and/or provide other restrictions
to conducting flight operations in the country that may restrict
our ability to perform SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font></font></font>
surveys as freely as in Canada and the U.S.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div id="pgbrk" style="width: 100%; margin-left: 0px; text-indent: 0px; margin-right: 0px">
<div id="ftr">
<div style="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div id="pn" style="text-align: center"><font style="font-family: Times New Roman; font-size: 13px">23</font></div>
</div>
<div id="pb" style="text-align: center; page-break-after: always; margin-left: 0px; margin-right: 0px; margin-bottom: 6px; width: 100%; height: 1px; background-color: #000000">
<!--page break--></div>
<div id="hdr">
<div style="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">For
example, in Colombia, SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font></font></font>
surveys must comply with three requirements not encountered in
Canada and the United States. These requirements are i) customs
obligations and bonds related to the importation and exportation of
the aircraft into Colombia, ii) obtaining permits from the local
aviation authority, and iii) obtaining permits from the Colombian
Air Force. NXT has successfully operated in the past in Colombia in
accordance with these requirements.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">With
our past experience in Canada, the U.S., Bolivia, Mexico, Colombia
and other countries, we do not anticipate any unusual government
controls or regulations that might significantly prevent timely
completion of SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font></font></font>
surveys. However, we may encounter unforeseen government
regulations or restrictions in other countries that may impair or
restrict our ability to conduct surveys, which could limit our
ability to earn revenue or potentially expose NXT to forfeiture of
performance bonds.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="display: table">
<div style="display: table-row">
<div style="display: table-cell; width: 48px"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">C.&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">Organizational
structure.</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px;">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">The
following table provides a list of all subsidiaries and other
companies controlled by NXT:</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div>
<table cellpadding="0" cellspacing="0" style="width: 100%; font-family: Times New Roman; font-size: 13px">
<tr>
<td style="vertical-align: bottom; width: 20%; border-bottom: 2px solid rgb(0, 0, 0);">
<div style="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-size: 11px"><font style="font-weight: bold; color: rgb(0, 0, 0); font-family: Times New Roman;">
Subsidiaries</font></font></div>
</td>
<td style="vertical-align: bottom; width: 20%; border-bottom: 2px solid rgb(0, 0, 0);">
<div style="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-size: 11px"><font style="font-weight: bold; color: rgb(0, 0, 0); font-family: Times New Roman;">
Date and Manner of Incorporation</font></font></div>
</td>
<td style="vertical-align: bottom; width: 20%; border-bottom: 2px solid rgb(0, 0, 0);">
<div style="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-size: 11px"><font style="font-weight: bold; color: rgb(0, 0, 0); font-family: Times New Roman;">
Authorized Share Capital</font></font></div>
</td>
<td style="vertical-align: bottom; width: 15%; border-bottom: 2px solid rgb(0, 0, 0);">
<div style="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-size: 11px"><font style="font-weight: bold; color: rgb(0, 0, 0); font-family: Times New Roman;">
Issued and Outstanding Shares</font></font></div>
</td>
<td style="vertical-align: bottom; width: 12%; border-bottom: 2px solid rgb(0, 0, 0);">
<div style="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-size: 11px"><font style="font-weight: bold; color: rgb(0, 0, 0); font-family: Times New Roman;">
Nature of the Business</font></font></div>
</td>
<td colspan="2" style="vertical-align: bottom; width: 12%; border-bottom: 2px solid rgb(0, 0, 0);">
<div style="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-size: 11px"><font style="font-weight: bold; color: rgb(0, 0, 0); font-family: Times New Roman;">
% of each Class of Shares owned by NXT</font></font></div>
</td>
</tr><tr style="background-color: rgb(204, 238, 255);">
<td style="vertical-align: middle; width: 20%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="color: #000000; font-family: Times New Roman; font-size: 13px">
NXT Energy USA, Inc.</font></div>
</td>
<td style="vertical-align: middle; width: 20%">
<div style="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="color: #000000; font-family: Times New Roman; font-size: 13px">
October 20, 1995 by Articles of Incorporation &#x2013; State of
Nevada</font></div>
</td>
<td style="vertical-align: middle; width: 20%">
<div style="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="color: #000000; font-family: Times New Roman; font-size: 13px">
20,000,000 common</font></div>
</td>
<td style="vertical-align: middle; width: 15%">
<div style="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="color: #000000; font-family: Times New Roman; font-size: 13px">
5,000,000 common</font></div>
</td>
<td style="vertical-align: middle; width: 12%">
<div style="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="color: #000000; font-family: Times New Roman; font-size: 13px">
Inactive</font></div>
</td>
<td colspan="2" style="vertical-align: middle; width: 12%">
<div style="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="color: #000000; font-family: Times New Roman; font-size: 13px">
100%</font></div>
</td>
</tr><tr>
<td style="vertical-align: middle; width: 20%">
<div><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td style="vertical-align: middle; width: 20%">
<div><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td style="vertical-align: middle; width: 20%">
<div><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td style="vertical-align: middle; width: 15%">
<div><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td style="vertical-align: middle; width: 12%">
<div><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td colspan="2" style="vertical-align: middle; width: 12%">
<div><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
</tr><tr style="background-color: rgb(204, 238, 255);">
<td rowspan="2" style="vertical-align: middle; width: 20%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="color: #000000; font-family: Times New Roman; font-size: 13px">
NXT Aero USA, Inc.</font></div>
</td>
<td rowspan="2" style="vertical-align: middle; width: 20%">
<div style="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="color: #000000; font-family: Times New Roman; font-size: 13px">
August 28, 2000 by Articles of Incorporation &#x2013; State of
Nevada</font></div>
</td>
<td style="vertical-align: middle; width: 20%">
<div style="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="color: #000000; font-family: Times New Roman; font-size: 13px">
1,000 common</font></div>
</td>
<td style="vertical-align: middle; width: 15%">
<div style="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="color: #000000; font-family: Times New Roman; font-size: 13px">
100 common</font></div>
</td>
<td style="vertical-align: middle; width: 12%">
<div style="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="color: #000000; font-family: Times New Roman; font-size: 13px">
Inactive</font></div>
</td>
<td colspan="2" style="vertical-align: middle; width: 12%">
<div style="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="color: #000000; font-family: Times New Roman; font-size: 13px">
100%</font></div>
</td>
</tr><tr>
<td style="vertical-align: middle; width: 20%; background-color: rgb(204, 238, 255);">
<div style="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="color: #000000; font-family: Times New Roman; font-size: 13px">
4,000 preferred</font></div>
</td>
<td style="vertical-align: bottom; width: 15%; background-color: rgb(204, 238, 255);">
<div><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td style="vertical-align: bottom; width: 12%; background-color: rgb(204, 238, 255);">
<div><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td colspan="2" style="vertical-align: bottom; width: 12%; background-color: rgb(204, 238, 255);">
<div><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
</tr><tr style="background-color: rgb(204, 238, 255);">
<td style="vertical-align: middle; width: 20%">
<div><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td style="vertical-align: middle; width: 20%">
<div><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td style="vertical-align: middle; width: 20%">
<div><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td style="vertical-align: middle; width: 15%">
<div><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td style="vertical-align: middle; width: 12%">
<div><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td colspan="2" style="vertical-align: middle; width: 12%">
<div><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
</tr><tr>
<td style="vertical-align: middle; width: 20%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="color: #000000; font-family: Times New Roman; font-size: 13px">
Cascade Petroleum Inc. (Formerly Survey Services International
Inc.)&#xB9;</font></div>
</td>
<td style="vertical-align: middle; width: 20%">
<div style="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="color: #000000; font-family: Times New Roman; font-size: 13px">
2011-09-06 by Articles of Incorporation &#x2013; Province of
Alberta</font></div>
</td>
<td style="vertical-align: middle; width: 20%">
<div style="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="color: #000000; font-family: Times New Roman; font-size: 13px">
Unlimited number of common shares</font></div>
</td>
<td style="vertical-align: middle; width: 15%">
<div style="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="color: #000000; font-family: Times New Roman; font-size: 13px">
100 common</font></div>
</td>
<td style="vertical-align: middle; width: 12%">
<div style="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="color: #000000; font-family: Times New Roman; font-size: 13px">
Inactive</font></div>
</td>
<td colspan="2" style="vertical-align: middle; width: 12%">
<div style="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="color: #000000; font-family: Times New Roman; font-size: 13px">
100%</font></div>
</td>
</tr><tr style="background-color: rgb(204, 238, 255);">
<td style="vertical-align: middle; width: 20%">
<div><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td style="vertical-align: middle; width: 20%">
<div><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td style="vertical-align: middle; width: 20%">
<div><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td style="vertical-align: bottom; width: 15%">
<div><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td style="vertical-align: bottom; width: 12%">
<div><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td colspan="2" style="vertical-align: bottom; width: 12%">
<div><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
</tr><tr>
<td style="vertical-align: middle; width: 20%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="color: #000000; font-family: Times New Roman; font-size: 13px">
NXT Energy Services (SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font></font></font></font>)
Inc.</font></div>
</td>
<td style="vertical-align: middle; width: 20%">
<div style="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="color: #000000; font-family: Times New Roman; font-size: 13px">
2019-12-08 by Federal Articles of Incorporation &#x2013;
Canada</font></div>
</td>
<td style="vertical-align: middle; width: 20%">
<div style="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="color: #000000; font-family: Times New Roman; font-size: 13px">
Unlimited number of common shares</font></div>
</td>
<td style="vertical-align: middle; width: 15%">
<div style="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="color: #000000; font-family: Times New Roman; font-size: 13px">
100 common</font></div>
</td>
<td style="vertical-align: middle; width: 12%">
<div style="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="color: #000000; font-family: Times New Roman; font-size: 13px">
Inactive</font></div>
</td>
<td colspan="2" style="vertical-align: middle; width: 12%">
<div style="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="color: #000000; font-family: Times New Roman; font-size: 13px">
100%</font></div>
</td>
</tr><tr style="background-color: rgb(204, 238, 255);">
<td style="vertical-align: middle; width: 20%">
<div><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td style="vertical-align: middle; width: 20%">
<div><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td style="vertical-align: middle; width: 20%">
<div><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td style="vertical-align: middle; width: 15%">
<div><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td style="vertical-align: middle; width: 12%">
<div><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td colspan="2" style="vertical-align: middle; width: 12%">
<div><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
</tr><tr>
<td style="vertical-align: middle; width: 20%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="color: #000000; font-family: Times New Roman; font-size: 13px">
PetroCaza Exploration Inc.</font></div>
</td>
<td style="vertical-align: middle; width: 20%">
<div style="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="color: #000000; font-family: Times New Roman; font-size: 13px">
May 2015 by Articles of Incorporation Province of
Alberta</font></div>
</td>
<td style="vertical-align: middle; width: 20%">
<div style="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="color: #000000; font-family: Times New Roman; font-size: 13px">
Unlimited number of common and preferred shares</font></div>
</td>
<td style="vertical-align: middle; width: 15%">
<div style="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="color: #000000; font-family: Times New Roman; font-size: 13px">
100 common</font></div>
</td>
<td style="vertical-align: middle; width: 12%">
<div style="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="color: #000000; font-family: Times New Roman; font-size: 13px">
Inactive</font></div>
</td>
<td colspan="2" style="vertical-align: middle; width: 12%">
<div style="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="color: #000000; font-family: Times New Roman; font-size: 13px">
100%</font></div>
</td>
</tr><tr>
<td colspan="6" style="vertical-align: top; width: 96%">
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-style: italic; font-family: Times New Roman; font-size: 13px">
</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px;">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-style: italic; font-family: Times New Roman; font-size: 13px">
&#xB9;On January 16<font style="font-size: 70%; vertical-align: top">th</font>, 2017, the name of
Survey Services International Inc. was changed to &#x201C;Cascade
Petroleum Inc.&#x201D;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td style="vertical-align: top; width: 4%">
<div><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
</tr></table>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">In
addition, in March 2015, NXT registered NXT Energy Solutions Inc.
(Sucursal Bolivia) as a wholly owned &#x201C;Branch&#x201D; entity
under the laws of the Plurinational State of Bolivia, to contract
and conduct survey operations in Bolivia. Operations have now
ceased in Bolivia and we are in the process of closing the branch
which should be completed in the second quarter of
2020.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div id="pgbrk" style="width: 100%; margin-left: 0px; text-indent: 0px; margin-right: 0px">
<div id="ftr">
<div style="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div id="pn" style="text-align: center"><font style="font-family: Times New Roman; font-size: 13px">24</font></div>
</div>
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<!--page break--></div>
<div id="hdr">
<div style="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="display: table">
<div style="display: table-row">
<div style="display: table-cell; width: 48px"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">D.&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">Property,
plant and equipment.</font></div>
</div>
</div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="text-decoration: underline; font-family: Times New Roman; font-size: 13px">
Oil and Gas Properties</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">We have
minor historical interests in a limited number of acreage holdings
of undeveloped lands in western Canada. These assets are not a
material asset and have been written off in our financial
statements. Additionally, we may in the future become entitled to
receive gross over-riding royalty (&#x201C;GORR&#x201D;) interests on
production from portions of certain lands where we conducted past
surveys for clients in Canada. There is no certainty that wells on
these lands will become placed on production, or that future
royalty revenues will be earned from these entitlements prior to
the expiry of the landowners&#x2019; related mineral leases. No
asset value has been recorded in the financial statements for these
GORRs.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="text-decoration: underline; font-family: Times New Roman; font-size: 13px">
Facilities / Office Premises</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">In
August 2015, NXT moved to a new office premises (11,333 square
feet) at 3320 &#x2013; 17<font style="font-size: 70%; vertical-align: top">th</font> Avenue SW in
Calgary under a 10-year lease at an initial estimated minimum
monthly lease payment of $48,243 (including building operating
costs) commencing in October 2015. See also Item 5.F
&#x201C;Contractual Obligations&#x201D;.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="text-decoration: underline; font-family: Times New Roman; font-size: 13px">
Aircraft</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">In
order to perform our survey services, NXT requires to fly the
survey area in a jet aircraft. In April 2017, NXT completed a sale
and leaseback agreement of its aircraft with a Calgary based
international aircraft services organization (the
&#x201C;Lessor&#x201D;). The terms of the agreement resulted in NXT
selling its&#x2019; 1997 Cessna Citation Ultra 560 jet aircraft that
was purchased in 2015. NXT has leased the aircraft over an initial
term of 60 months and retains all existing operating rights and
obligations. NXT is required to make monthly payments to the Lessor
of approximately US$39,500. NXT has the option to extend the term
of the lease by an additional two years. Should NXT want to
repurchase the aircraft at the end of the initial lease term, the
purchase price is US$1,450,000. When the aircraft is not needed for
use by NXT, we seek to earn charter hire revenues from the aircraft
through a third party, Air Partners.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Air
Partners also has access to an alternate, similar model aircraft
(certified for the use of our survey equipment) which could be
charter hired for use by NXT if needed.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="text-decoration: underline; font-family: Times New Roman; font-size: 13px">
Equipment</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Our
SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font></font></font>
technology is comprised of three main components, detailed below,
which we collectively refer to as our SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font></font></font>
survey system. This system is generally stored at our Calgary
office facility unless deployed during survey operations when this
equipment would travel with the aircraft or be stored in a locked
facility at the survey location when not in use. In addition, there
is extensive interpretation equipment located in Calgary. The main
categories of equipment we use are:</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div>
<table cellpadding="0" cellspacing="0" style="width: 100%; font-family: Times New Roman; font-size: 13px">
<tr>
<td style="vertical-align: top; width: 2%">
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="color: #000000; font-size: 13px">&#x25CF;</font></div>
</td>
<td style="vertical-align: top; width: 98%">
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px"><font style="font-style: italic; color: #000000">
Stress Field Detector -</font> <font style="color: #000000">The
stress field detector, or SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font></font></font>
system, including a unit which houses the SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font></font></font>
sensors, is the principal component of our technology.&#xA0; The
SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font></font></font>
sensors respond to fine-scale perturbations in the gravitational
field caused by changes in subsurface density and stress
distribution. These responses are transformed through
electromechanical transduction into electronic digital signals as
the output.&#xA0; The SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font></font></font>
method has proven highly effective at identifying potential
hydrocarbon traps in a wide variety of geological settings onshore
and offshore. Airborne SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font></font></font>
surveys are currently conducted utilizing an array of 22
SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font></font></font>
sensors, consisting of 6 primary, 8 secondary and 8 research and
development sensors, allowing multiple independent SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font></font></font>
signals to be acquired at all points of a designed
survey.&#xA0;</font></font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
</tr><tr>
<td style="vertical-align: top; width: 2%">
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="color: #000000; font-size: 13px">&#x25CF;</font></div>
</td>
<td style="vertical-align: top; width: 98%">
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px"><font style="font-style: italic">
Data Acquisition System -</font> used in conjunction with the
SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font></font></font>
sensor array on surveys, our data acquisition system is a compact,
portable computer system which concurrently acquires the electronic
digital signals from the SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font></font></font>
sensor array and other pertinent client data, including the GPS
location information of the data.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
</tr><tr>
<td style="vertical-align: top; width: 2%">
<div style="text-align: left; margin-left: 0px; text-indent: 0px; margin-right: 0px;"><font style="font-size: 13px">&#x25CF;</font><font id="tab2" style="letter-spacing: 12px; color: black">&#xA0;</font></div>
</td>
<td style="vertical-align: top; width: 98%">
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px"><font style="font-style: italic">
SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font></font></font>
Signal Conditioning Unit -</font> this self-contained unit contains
electronic circuits for stabilizing and conditioning electronic
signals. All sensor output is directly connected to this unit and
after signal conditioning is completed, all output is forwarded to
the computer system.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
</tr><tr>
<td style="vertical-align: top; width: 2%">
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="color: #000000; font-size: 13px">&#x25CF;</font></div>
</td>
<td style="vertical-align: top; width: 98%">
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px"><font style="font-style: italic">
Interpretation Theatre -</font> once returned to our home base, the
SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font></font></font>
data collected is processed and converted into a format that can be
used by our interpretation staff using systems consisting of
generally off-the-shelf computer equipment, high definition
monitors, projectors and screens. This equipment is generally
permanently set up at our Calgary office facility. A remote
SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font></font></font>
data interpretation theater is available and may be deployed during
survey operations and would be set up in a facility at the survey
client&#x2019;s city.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
</tr></table>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div id="pgbrk" style="width: 100%; margin-left: 0px; text-indent: 0px; margin-right: 0px">
<div id="ftr">
<div style="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div id="pn" style="text-align: center"><font style="font-family: Times New Roman; font-size: 13px">25</font></div>
</div>
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<div id="hdr">
<div style="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">We are
not affected by any significant environmental concerns, nor is
there any planned significant capital additions
contemplated.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="display: table; margin-left: 48px">
<div style="display: table-row">
<div style="display: table-cell; width: 96px;"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px"><a name="_Toc449704249"><!--anchor--></a>ITEM 4A.&#xA0;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">UNRESOLVED
STAFF COMMENTS</font></div>
</div>
</div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Not
applicable.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="display: table; margin-left: 48px">
<div style="display: table-row">
<div style="display: table-cell; width: 96px"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px"><a name="_Toc449704250"><!--anchor--></a>ITEM 5.&#xA0;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">OPERATING
AND FINANCIAL REVIEW AND PROSPECTS</font></div>
</div>
</div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">The
following discussion of our financial condition and results of
operations should be read in conjunction with the &#x201C;Selected
Financial Data&#x201D; and the accompanying Consolidated Financial
Statements and the notes to those statements incorporated by
reference elsewhere in this Form 20-F. The following discussion
contains forward-looking statements that reflect our plans,
estimates and beliefs. Our actual results could differ materially
from those discussed in these forward-looking statements. Factors
that could cause or contribute to such differences include, but are
not limited to, those discussed below and elsewhere in this annual
report, particularly under the caption &#x201C;Risk
Factors&#x201D;.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="display: table">
<div style="display: table-row">
<div style="display: table-cell; width: 48px"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">A.&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">Operating
results.</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Overall
Operational Performance</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div>
<table cellpadding="0" cellspacing="0" style="margin-right:0px;width:100%;font-size:inherit;font-family:inherit;margin-left:0px;">
<tr>
<td rowspan="1" style="vertical-align:bottom;width:64%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="font-weight: bold; color: #000000; font-family: Times New Roman; font-size: 13px">
Selected Annual Information</font></div>
</td>
<td colspan="3" rowspan="1" style="vertical-align:bottom;width:36%;">
<div><font style="text-align: left; vertical-align: bottom; width: 3%; display: inline-block; font-size: 11px;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 94%; display: inline-block; font-size: 11px;">
<div><font style="font-weight: bold; font-family: Times New Roman; color: rgb(0, 0, 0);">
For the year ended December 31</font></div>
</font><font style="text-align: left; vertical-align: bottom; width: 3%; display: inline-block; font-size: 11px;">&#xA0;</font></div>
</td>
</tr><tr>
<td style="vertical-align:bottom;width:64%;">
<div style="margin-left:0px;padding-bottom:1px;"><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; border-bottom: 1px solid rgb(0, 0, 0); display: inline-block; font-size: 11px;">
<div><font style="font-weight: bold; font-family: Times New Roman;">2019</font></div>
</font><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; border-bottom: 1px solid rgb(0, 0, 0); display: inline-block; font-weight: bold; font-size: 11px;">
<div><font style="font-family: Times New Roman; font-weight: bold;">2018</font></div>
</font><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; border-bottom: 1px solid rgb(0, 0, 0); display: inline-block; font-weight: bold; font-size: 11px;">
<div><font style="font-family: Times New Roman; font-weight: bold;">2017</font></div>
</font><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font></div>
</td>
</tr><tr>
<td style="vertical-align:bottom;width:64%;">
<div style="margin-left:0px;"><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;display:inline-block;">&#xA0;</font><font style="text-align: center; vertical-align:bottom;width:80%;display:inline-block;">
<div><font style="font-size:13px;font-family:Times New Roman;">&#xA0;</font></div>
</font><font style="text-align: left; vertical-align:bottom;width:10%;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;display:inline-block;">&#xA0;</font><font style="text-align: center; vertical-align:bottom;width:80%;display:inline-block;">
<div><font style="font-size:13px;font-family:Times New Roman;">&#xA0;</font></div>
</font><font style="text-align: left; vertical-align:bottom;width:10%;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;display:inline-block;">&#xA0;</font><font style="text-align: center; vertical-align:bottom;width:80%;display:inline-block;">
<div><font style="font-size:13px;font-family:Times New Roman;">&#xA0;</font></div>
</font><font style="text-align: left; vertical-align:bottom;width:10%;display:inline-block;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td style="vertical-align:bottom;width:64%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="font-family: Times New Roman; font-size: 13px"><font style="color: #000000">Survey revenue</font>&#xA0;&#xA0;$</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">$&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">11,976,149</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">$</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">-</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">$</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">-</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td style="vertical-align:bottom;width:64%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Net
comprehensive income (loss)</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">3,772,908</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">(6,968,511</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">)</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">(8,970,398</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">)</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td style="vertical-align:bottom;width:64%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Net
income (loss) per common share - basic</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">$&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">0.06</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">$</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">(0.11</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">)</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">$</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">(0.16</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">)</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td style="vertical-align:bottom;width:64%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Net
income (loss) per common share - diluted</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">$&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">0.06</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">$</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">(0.11</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">)</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">$</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">(0.16</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">)</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td style="vertical-align:bottom;width:64%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Net
cash generated by (used in) operating activities</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">4,078,427</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">(6,043,919</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">)</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">(5,464,679</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">)</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td style="vertical-align:bottom;width:64%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Cash
and short term investments</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">6,639,757</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">4,239,532</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">1,116,618</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td style="vertical-align:bottom;width:64%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Total
assets</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">30,692,941</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">25,264,268</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">23,920,991</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td style="vertical-align:bottom;width:64%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Long
term liabilities</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">2,691,217</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">510,661</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">741,408</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
</tr></table>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="color: #000000; font-family: Times New Roman; font-size: 13px">
<br></font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Summary
financial highlights for the last three fiscal years are as
follows:</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="text-decoration: underline; font-family: Times New Roman; font-size: 13px">
Financial Highlights for 2019</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="margin-left: 24px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="text-decoration: line-through; font-weight: bold; font-size: 13px">
</font><font style="font-size: 13px;">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">In Q3 the Company
completed its Nigerian SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font></font></font>
survey for approximately US$8.9 Million with PE Energy Limited
(&#x201C;PE&#x201D;), a Nigerian oil and gas service company. PE had
a contract with the Nigerian National Petroleum Company
(&#x201C;NNPC&#x201D;), to provide 5,000-line kilometers of
SFD<font style="color: #262626"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font><font style="font-size: 70%; vertical-align: top; color: #262626">&#xA0;</font>surveys
in Nigeria.</font></div>
</div>
</div>
<div style="margin-left: 24px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">As of the date of
this 20-F, the Company has received a total of US$8.4 million
payments in cash from PE for the SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font></font></font>
survey in Nigeria, including US$1.9 million in Q4 and an additional
US$0.47 million in the first quarter of 2020. The final payment for
contracted holdbacks amount to approximately $0.5 million
USD.</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div id="pgbrk" style="width: 100%; margin-left: 0px; text-indent: 0px; margin-right: 0px">
<div id="ftr">
<div style="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div id="pn" style="text-align: center"><font style="font-family: Times New Roman; font-size: 13px">26</font></div>
</div>
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<div id="hdr">
<div style="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="margin-left: 24px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="color: #262626; font-family: Times New Roman; font-size: 13px">NXT
received confirmation of a patent granted from the European Patent
Office. This brings the total number of countries granting the
patent to 44. The final step is for the validation process of the
SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font></font></font>
technology patent in select European countries.</font></div>
</div>
</div>
<div style="margin-left: 24px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px;">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">In February 2019,
NXT entered into a Co-operative Agreement with AGV, for AGV to
bring to proposal up to three SFD<font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font></font></font></font>
surveys for cooperation with the Company within two years. The
Co-operative Agreement is based on a cost-plus formula and a gross
overriding royalty interest in oil and gas production arising on
lands subject to the surveys. The Company received a US$100,000
non-refundable deposit paid in connection with the Co-operative
Agreement in Q2. Pursuant to the Co-operation Agreement, the
deadline to complete at least one of three SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font></font></font>
surveys is June 30, 2020.</font></div>
</div>
</div>
<div style="margin-left: 24px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px;">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">In Q3, the Company
advanced US$250,000 to AGV for the purpose of furthering the shared
objectives of NXT and AGV under the Co-operation Agreement. On
April 13, 2020, NXT elected to receive and directed AGV to deliver
US$250,000 as repayment of the Principal Amount.</font></div>
</div>
</div>
<div style="margin-left: 24px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px;">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">During Q4 the
Company completed the C$1,250,000 targeted issuer bid, purchasing
for cancellation 4,166,667 common shares in the capital of the
Company representing approximately 6.08% of the total outstanding
Common Shares as of November 14, 2019, at a price of C$0.30 per
Common Share.</font></div>
</div>
</div>
<div style="margin-left: 24px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px;">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">Common share
purchase warrants held by AGV have expired as of October 31,
2019.</font></div>
</div>
</div>
<div style="margin-left: 24px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">Cash and short-term
investments at the end of the 2019 were $6.64 million.</font></div>
</div>
</div>
<div style="margin-left: 24px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">There was $11.98
million of survey revenues recorded in 2019.</font></div>
</div>
</div>
<div style="margin-left: 24px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">Net income of $3.77
million was recorded for 2019, including amortization expense of
$1.78 million.</font></div>
</div>
</div>
<div style="margin-left: 24px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px;">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">Operating
activities provided $4.08 million of cash during 2019 and net cash
used for financing activities was $1.39 million.</font></div>
</div>
</div>
<div style="margin-left: 24px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px;">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">Net income per
common share for 2019 was $0.06&#xA0;basic and $0.06 fully
diluted.</font></div>
</div>
</div>
<div style="margin-left: 24px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">General and
administrative costs for 2019 as compared to 2018 have been reduced
by $0.50 million or 13% mostly due a reduction in business
development costs, lower headcount and costs and certain
expenditures being recognized as direct survey costs, offset by
higher professional fees and information technology
costs.</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="text-decoration: underline; font-family: Times New Roman; font-size: 13px">
Financial Highlights for 2018</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="margin-left: 36px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
&#x25CF;</div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">Following the
Company&#x2019;s participation at the Upstream West Africa Summit in
Senegal in Q2, NXT management traveled twice to Africa to meet with
representatives of the Nigerian National Petroleum Corporation
(&#x201C;NNPC&#x201D;) and the Ghana National Petroleum Corporation
(&#x201C;GNPC&#x201D;) to discuss the benefits <font style="color: #222222; background-color: #FFFFFF">SFD<font style="font-size: 70%; vertical-align: top">&#xAE;</font></font> would
bring to their current exploration programs.</font></div>
</div>
</div>
<div style="margin-left: 36px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px;">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">Discussions with
NNPC continued in the fourth quarter of 2018 and have resulted in
the signing of a contract in March 2019 with PE Energy Limited, a
Nigerian oil and gas service company, for the value of
approximately $US8.9 million.</font></div>
</div>
</div>
<div style="margin-left: 36px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px;">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">NXT has entered
into a three year exclusive sales representative agreement with
AGV, in nine jurisdictions in the Middle East and Latin America.
This agreement has expired in 2020.</font></div>
</div>
</div>
<div style="margin-left: 36px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">NXT received
notification of the granting of NXT's SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font></font></font>
patent in China on April 13, 2018.</font></div>
</div>
</div>
<div style="margin-left: 36px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">In September 2018,
NXT received a U.S. patent for its new sensor design we term the
&#x201C;Cascade&#x201D; configuration.</font></div>
</div>
</div>
<div style="margin-left: 96px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-family: Times New Roman; font-size: 13px">o</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">The Cascade sensor
is the result of NXT&#x2019;s continued research &amp; development
efforts and builds upon our existing US patent. Management believes
the Company&#x2019;s Cascade sensors will provide enhanced ability
for identifying trapped fluid bodies indicative of potential
hydrocarbon accumulations along with improved reliability and
flexibility during SFD<font style="font-size: 70%; vertical-align: top">&#xAE;</font> survey
operations.</font></div>
</div>
</div>
<div style="margin-left: 36px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px"><font style="color: #000000">In October 2018, we signed an MOU with BGP Inc., a
subsidiary of China National Petroleum Corporation, to further
explore opportunities for NXT and PGP Inc. to work together.
NXT&#x2019;s forward strategy is to secure</font> <font style="color: #222222; background-color: #FFFFFF">SFD<font style="font-size: 70%; vertical-align: top">&#xAE;</font></font>
<font style="color: #000000">contracts with BGP and its
affiliates.</font></font></div>
</div>
</div>
<div style="margin-left: 36px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">The MOU entered
into between Generation Resource Discoveries (&#x201C;GRD&#x201D;),
NXT&#x2019;s regional representative, and the Government of Aceh,
Indonesia on February 22, 2018, GRD has expired.</font></div>
</div>
</div>
<div style="margin-left: 36px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">NXT completed a
Private Placement financing on July 3, 2018 of $9,484,810 through
the issuance of an aggregate of 10,264,946 units at $0.924 per unit
(the "Private Placement"). Each unit consisted of one common share
and one-third of one common share purchase warrant (each whole
warrant, a "Warrant"), and each Warrant entitles the holder to
acquire one common share at an exercise price of $1.20 for twelve
(12) months from closing of the first tranche of the Private
Placement on February 16, 2018. The Warrants expired on October 31,
2019.</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div id="pgbrk" style="width: 100%; margin-left: 0px; text-indent: 0px; margin-right: 0px">
<div id="ftr">
<div style="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div id="pn" style="text-align: center"><font style="font-family: Times New Roman; font-size: 13px">27</font></div>
</div>
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<div id="hdr">
<div style="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="margin-left: 36px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">No survey revenues
were recorded in 2018.</font></div>
</div>
</div>
<div style="margin-left: 36px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">A net loss of $6.97
million was recorded for 2018, including amortization expense of
$1.79 million and stock-based compensation expense of $0.39
million.</font></div>
</div>
</div>
<div style="margin-left: 36px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px;">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">Losses per common
share was $0.11 for 2018 (basic and diluted).</font></div>
</div>
</div>
<div style="margin-left: 36px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
&#x25CF;</div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">Operating
activities used $6.04 million as at 2018 and net cash from
financing activities was $9.18 million.</font></div>
</div>
</div>
<div style="margin-left: 36px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">General and
administrative costs for 2018 as compared to 2017 have been reduced
by $0.96 million or 19% mostly due to a reduction in headcount,
public company costs and partially offset by increased business
development activity.</font></div>
</div>
</div>
<div style="margin-left: 36px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">Cash and short-term
investments at the end of the 2018 were $4.24 million.</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="text-decoration: underline; font-family: Times New Roman; font-size: 13px">
Financial Highlights for 2017</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="margin-left: 36px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">No survey revenues
were recorded for 2017.</font></div>
</div>
</div>
<div style="margin-left: 36px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">NXT completed its
first ever SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font></font></font>
Multi-Client survey in the Gulf of Mexico.</font></div>
</div>
</div>
<div style="margin-left: 72px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="color: #262626; font-family: Times New Roman; font-size: 13px">o</font></div>
<div style="text-align: justify; display: table-cell"><font style="color: #262626; font-family: Times New Roman; font-size: 13px">Acquired
37,596 line km of SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font></font></font>
data in June 2017 for the shallow water Bid Round 2.1 covering the
Tampicao-Misantla, Veracruz and Cuencas del Sureste exploration
areas. The SFD<font style="font-size: 70%; vertical-align: top">&#xAE;</font> survey data
provides 100% grid coverage over the offshore blocks, an area of
approximately 8,900 km2. In addition, NXT acquired incidental data
over many of the 35 blocks offered in the recently concluded Bid
Round 3.1 and believe the remaining data will also be applicable to
future bid rounds.</font></div>
</div>
</div>
<div style="margin-left: 36px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="color: #262626; font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="color: #262626; font-family: Times New Roman; font-size: 13px">Successfully
tested the upgraded SFD<font style="font-size: 70%; vertical-align: top">&#xAE;</font> Data
Acquisition System during the Gulf of Mexico survey.</font></div>
</div>
</div>
<div style="margin-left: 36px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="color: #262626; font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="color: #262626; font-family: Times New Roman; font-size: 13px">Significantly
expanded protection of IP through multiple patent grants
globally.</font></div>
</div>
</div>
<div style="margin-left: 72px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="color: #262626; font-family: Times New Roman; font-size: 13px">o</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px"><font style="color: #262626">SFD</font><font style="font-size: 70%; vertical-align: top; color: #262626">&#xAE;</font>
<font style="color: #262626">patents granted in Russia (January
2017), Japan (July 2017), Mexico (July 2017), Canada (August 2017)
and the U.S. (November 2017); and notices of allowance received
from China (February 2018).</font></font></div>
</div>
</div>
<div style="margin-left: 36px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="color: #262626; font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="color: #262626; font-family: Times New Roman; font-size: 13px">A
net loss of $8,970,398 for the year including amortization expense
of $1,897,576.</font></div>
</div>
</div>
<div style="margin-left: 36px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="color: rgb(38, 38, 38); font-size: 13px;">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px"><font style="color: #262626">Operating activities used $5,464,679 of cash
during the year and net cash utilization was
$323,878.</font></font></div>
</div>
</div>
<div style="margin-left: 36px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="color: rgb(38, 38, 38); font-size: 13px;">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px"><font style="color: #262626">Losses per common share were $0.16&#xA0;(basic and
diluted).</font></font></div>
</div>
</div>
<div style="margin-left: 36px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="color: #262626; font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="color: #262626; font-family: Times New Roman; font-size: 13px">Significant
progress made in 2017 and the first quarter of 2018 to reduce
corporate costs and execute on financing options significantly
strengthening the Company&#x2019;s liquidity and working capital
position.</font></div>
</div>
</div>
<div style="margin-left: 72px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="color: #262626; font-family: Times New Roman; font-size: 13px">o</font></div>
<div style="text-align: justify; display: table-cell"><font style="color: #262626; font-family: Times New Roman; font-size: 13px">$2.7
million sale and leaseback arrangement on our airplane completed in
April 2017.</font></div>
</div>
</div>
<div style="margin-left: 72px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="color: #262626; font-family: Times New Roman; font-size: 13px">o</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px"><font style="color: #262626">Rights offering completed on November
3</font><font style="font-size: 70%; vertical-align: top; color: #262626">rd</font>
<font style="color: #262626">for gross proceeds of
$2,093,645.</font></font></div>
</div>
</div>
<div style="margin-left: 36px; display: table;">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">Cash and short-term
investments at the end of 2017 were $1,116,618.</font></div>
</div>
</div>
<div><br></div>
<div>
<table cellpadding="0" cellspacing="0" style="margin-right:0px;width:100%;font-size:inherit;font-family:inherit;margin-left:0px;">
<tr>
<td rowspan="1" style="vertical-align:bottom;width:64%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="font-weight: bold; color: #000000; font-family: Times New Roman; font-size: 13px">
Net Income (Loss)</font></div>
</td>
<td rowspan="1" style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;display:inline-block;">&#xA0;</font><font style="text-align: center; vertical-align:bottom;width:80%;display:inline-block;">
<div><font style="font-size:13px;font-family:Times New Roman;">&#xA0;</font></div>
</font><font style="text-align: left; vertical-align:bottom;width:10%;display:inline-block;">&#xA0;</font></div>
</td>
<td rowspan="1" style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;display:inline-block;">&#xA0;</font><font style="text-align: center; vertical-align:bottom;width:80%;display:inline-block;">
<div><font style="font-size:13px;font-family:Times New Roman;">&#xA0;</font></div>
</font><font style="text-align: left; vertical-align:bottom;width:10%;display:inline-block;">&#xA0;</font></div>
</td>
<td rowspan="1" style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;display:inline-block;">&#xA0;</font><font style="text-align: center; vertical-align:bottom;width:80%;display:inline-block;">
<div><font style="font-size:13px;font-family:Times New Roman;">&#xA0;</font></div>
</font><font style="text-align: left; vertical-align:bottom;width:10%;display:inline-block;">&#xA0;</font></div>
</td>
</tr><tr>
<td style="vertical-align:bottom;width:64%;">
<div style="margin-left:0px;padding-bottom:1px;"><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; border-bottom: 1px solid rgb(0, 0, 0); display: inline-block; font-weight: bold; font-size: 11px;">
<div><font style="font-family: Times New Roman; color: rgb(0, 0, 0); font-weight: bold;">
2019</font></div>
</font><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; border-bottom: 1px solid rgb(0, 0, 0); display: inline-block; font-weight: bold; font-size: 11px;">
<div><font style="font-family: Times New Roman; color: rgb(0, 0, 0); font-weight: bold;">
2018</font></div>
</font><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; border-bottom: 1px solid rgb(0, 0, 0); display: inline-block; font-weight: bold; font-size: 11px;">
<div><font style="font-family: Times New Roman; color: rgb(0, 0, 0); font-weight: bold;">
2017</font></div>
</font><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td style="vertical-align:bottom;width:64%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Survey
revenue</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">$</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">11,976,149</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">$</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">$&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td style="vertical-align:bottom;width:64%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Expenses</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td style="vertical-align:bottom;width:64%;">
<div style="text-align: left; text-indent:24px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Survey
costs</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">2,611,086</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">1,103,946</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">1,289,429</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td style="vertical-align:bottom;width:64%;">
<div style="text-align: left; text-indent:24px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">General
and administrative</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">3,497,785</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">3,999,089</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">4,960,961</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td style="vertical-align:bottom;width:64%;">
<div style="text-align: left; text-indent:24px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Stock
based compensation expense</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">43,809</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">386,154</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">581,356</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td style="vertical-align:bottom;width:64%;">
<div style="text-align: left; text-indent:24px;margin-right:0px;padding-bottom:1px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Amortization
expense</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">1,781,181</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">1,790,267</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">1,897,576</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td style="vertical-align:bottom;width:64%;">
<div style="margin-left:0px;"><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">7,933,861</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">7,279,456</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">8,729,332</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td style="vertical-align:bottom;width:64%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;padding-bottom:1px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Other
expense (income), net</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">269,380</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">(310,945</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">)</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">165,531</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td style="vertical-align:bottom;width:64%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Income
(loss) before income taxes</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">3,772,908</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">(6,968,511</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">)</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">(8,894,853</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">)</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td style="vertical-align:bottom;width:64%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Income
tax expense (recovery)</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td style="vertical-align:bottom;width:64%;">
<div style="text-align: left; text-indent:24px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Current</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">75,545</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td style="vertical-align:bottom;width:64%;">
<div style="text-align: left; text-indent:24px;margin-right:0px;padding-bottom:1px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Deferred</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td style="vertical-align:bottom;width:64%;">
<div style="margin-left:0px;padding-bottom:1px;"><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">75,545</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td style="vertical-align:bottom;width:64%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;padding-bottom:1px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Net
income (loss) for the year</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">3,772,908</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">(6,968,511</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">)</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">(8,970,398</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">)</font></div>
</td>
</tr></table>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div id="pgbrk" style="width: 100%; margin-left: 0px; text-indent: 0px; margin-right: 0px">
<div id="ftr">
<div style="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div id="pn" style="text-align: center"><font style="font-family: Times New Roman; font-size: 13px">28</font></div>
</div>
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<div id="hdr">
<div style="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="text-decoration: underline; font-family: Times New Roman; font-size: 13px">
Expenses for the years ended December 31, 2019, 2018 and
2017</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px"><font style="font-style: italic; text-decoration: underline">
Survey costs</font> &#x2013; Survey expenses relate entirely to the
direct survey costs and aircraft handling and maintenance costs,
net of charter hire revenue.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">In
2019, survey expenses included direct incremental survey costs for
the Nigerian SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font></font></font>
Survey incurred which include aircraft and hanger operating costs,
staff costs to support the survey, and mobilization/demobilization
costs. Also these costs include staff costs to interpret and
integrate the survey, and their travel costs. Aircraft operations
costs in 2019 were higher than 2018 as additional scheduled
maintenance was required after the Nigerian SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font></font></font>
Survey, net of charter hire revenue.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">The
aircraft is available for charter to third parties through our
aircraft manager when it is not being used by NXT. Any charter fees
received are used to offset aircraft costs.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">In
comparing 2018 with 2017, costs for aircraft operations are higher
because of the Phase 5 major maintenance performed on the aircraft.
This was offset by increased charter hours for all of 2018 which
offset operating costs. Aircraft lease costs in 2018 are $202,085
higher than 2017 as the lease payments started in May 2017, which
resulted in 4 months less of lease costs in 2017. Correspondingly,
amortization costs are lower in 2018.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">For
most of 2017, the survey costs related entirely to the aircraft
lease and maintenance costs, net of charter hire revenue. During Q2
2017, NXT completed its first ever SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font></font></font>
Multi-Client survey in the Gulf of Mexico. There have been no sales
for the SFD<font style="font-size: 70%; vertical-align: top">&#xAE;</font> data that was
recorded and therefore the direct costs of the survey have been
expensed. Survey costs only represent the direct costs that were
incurred during operations of this survey and exclude any indirect
costs associated with the use of the technology.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px"><font style="font-style: italic; text-decoration: underline">
General and administrative (&#x201C;G&amp;A&#x201D;) expense</font> -
G&amp;A is a major component of NXT's total expenses. All salaries
and overhead costs related to SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font></font></font>
data interpretation staff (other than out of country per diem
allowances) are included in G&amp;A, and not included with direct
survey expenses. The categories included in G&amp;A expense are as
follows:</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div>
<table cellpadding="0" cellspacing="0" style="margin-right:0px;width:100%;font-size:inherit;font-family:inherit;margin-left:0px;">
<tr>
<td rowspan="1" style="vertical-align:bottom;width:64%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;padding-bottom:1px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">For
the year ended December 31</font></div>
</td>
<td rowspan="1" style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; border-bottom: 1px solid rgb(0, 0, 0); display: inline-block; font-size: 11px;">
<div><font style="font-weight: bold; font-family: Times New Roman; color: rgb(0, 0, 0);">
2019</font></div>
</font><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px;">&#xA0;</font></div>
</td>
<td rowspan="1" style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; border-bottom: 1px solid rgb(0, 0, 0); display: inline-block; font-weight: bold; font-size: 11px;">
<div><font style="font-family: Times New Roman; color: rgb(0, 0, 0); font-weight: bold;">
2018</font></div>
</font><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font></div>
</td>
<td rowspan="1" style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; border-bottom: 1px solid rgb(0, 0, 0); display: inline-block; font-weight: bold; font-size: 11px;">
<div><font style="font-family: Times New Roman; color: rgb(0, 0, 0); font-weight: bold;">
2017</font></div>
</font><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td style="vertical-align:bottom;width:64%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Salaries,
benefits and consulting charges</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">$&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">1,599,247</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">$&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">2,046,886</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">$</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">2,709,194</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td style="vertical-align:bottom;width:64%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Board,
professional fees, and public company costs</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">857,556</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">781,330</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">873,864</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td style="vertical-align:bottom;width:64%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Indirect
financing costs</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">35,865</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td style="vertical-align:bottom;width:64%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Premises
and administrative overhead</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">800,626</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">753,380</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">842,994</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td style="vertical-align:bottom;width:64%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Business
development</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">240,356</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">382,146</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">257,465</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td style="vertical-align:bottom;width:64%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;padding-bottom:1px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Bolivia/Colombia
overhead</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">35,347</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">241,579</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td style="vertical-align:bottom;width:64%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;padding-bottom:1px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Total
G&amp;A</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">3,497,785</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">3,999,089</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">4,960,961</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
</tr></table>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">G&amp;A
expenses decreased by $501,304, or 13%, in 2019 compared to 2018
for the following reasons:</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="margin-left: 24px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">salaries, benefits
and consulting charges decreased $447,639, or 22%, due primarily to
a change to a lower cost mix in corporate staff, two less headcount
and allocation of direct salary costs to survey costs;</font></div>
</div>
</div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="margin-left: 24px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">board and
professional fees and public company costs increased $76,226, or
10%, due primarily to higher professional fees paid in connection
with the Nigerian SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font></font></font>
Survey and higher insurance costs given the increased business
activity (partially offset by termination costs to suspend the
Advisory Board in 2018);</font></div>
</div>
</div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="margin-left: 24px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">premises and
administrative overhead increased $47,246, or 6%, due primarily to
increased costs related to the improvement of the Company's
information systems security;</font></div>
</div>
</div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div id="pgbrk" style="width: 100%; margin-left: 0px; text-indent: 0px; margin-right: 0px">
<div id="ftr">
<div style="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div id="pn" style="text-align: center"><font style="font-family: Times New Roman; font-size: 13px">29</font></div>
</div>
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<!--page break--></div>
<div id="hdr">
<div style="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="margin-left: 24px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">business
development costs decreased $141,790, or 37%, due primarily to
Company resources focused on first the negotiation and then the
implementation of the Nigerian SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font></font></font>
Survey; and</font></div>
</div>
</div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="margin-left: 24px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">Bolivian overhead
costs decreased by $35,347, or 100%, as the Company officially
closed its offices and ceased operations in that country in
Q4-18.</font></div>
</div>
</div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">G&amp;A
expenses decreased by 19% or $961,872 in 2018:</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="margin-left: 24px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">The main reason for
salaries, benefits and consulting charges being lower in 2018 than
2017 is due to a reduction in corporate headcount. In addition,
focus was put on reducing vacation liabilities.</font></div>
</div>
</div>
<div style="margin-left: 24px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">Board, professional
fees and public company costs, were 14% lower in 2018 compared to
2017 as the Advisory Board was indefinitely suspended and there was
one less Director on the Board of Directors. Also, professional
fees were higher in 2017 as there were two significant
transactions, the Rights Offering and the Sale Leaseback
transaction which required significant legal assistance. In 2018,
the significant transaction was the Private Placement.</font></div>
</div>
</div>
<div style="margin-left: 24px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px"><font style="color: #000000">Premises and administrative overhead was 11% lower
in</font> 2018 <font style="color: #000000">compared to the prior
year, mostly due to lower property taxes and lower maintenance
costs early in the year. In addition, there was significant cost
reduction efforts in office overhead costs like supplies and
subscriptions.</font></font></div>
</div>
</div>
<div style="margin-left: 24px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="color: #000000; font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px"><font style="color: #000000">Business development costs increased $124,681 as
the Company increased marketing efforts for the</font>
SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font></font></font>
technology <font style="color: #000000">during
2018.</font></font></div>
</div>
</div>
<div style="margin-left: 24px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="color: #000000; font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">2018
YTD Bolivian overhead costs of $35,347 are related to closing of
the branch.</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Total
G&amp;A for 2017 was $5.0 million which was $0.7 million lower than
2016. G&amp;A within the six individual expense categories noted
above reflect several factors:</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="margin-left: 24px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">2017 salaries,
benefits and consulting charges are lower than 2016 levels due to
lower staffing levels.</font></div>
</div>
</div>
<div style="margin-left: 24px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">For
2017 the full year costs were slightly down due to 2 less board
members and other cost controls.</font></div>
</div>
</div>
<div style="margin-left: 24px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Indirect
financing costs in 2017 were higher due to work focused on
obtaining new financing and negotiating the aircraft
leaseback.</font></div>
</div>
</div>
<div style="margin-left: 24px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Premises
and administrative overhead where lower in 2017 versus the 2016 due
to cost reduction and deferred spending efforts.</font></div>
</div>
</div>
<div style="margin-left: 24px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="color: #000000; font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Business
development costs were lower for the year as marketing costs were
reduced.</font></div>
</div>
</div>
<div style="margin-left: 24px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px"><font style="color: #000000">Before 2017, Bolivian overhead costs were
classified as consolidated survey costs as the sole purpose of the
office opening was to administer the YPFB survey. At the beginning
of Q1 2017, Bolivian overhead costs were presented as G&amp;A to
reflect the fact the office has been maintained to facilitate
periodic operating activities in Bolivia that are anticipated from
time to time.</font> In Q2 2017, a previously held &#x201C;fiscal
tax credit&#x201D; of $127,798 was expensed as the recoverability of
this receivable was no longer considered certain. The credit
related to the Bolivian equivalent of input sales tax and is
usually offset against output sales tax. It is not refundable if
input tax exceeds output tax.</font></div>
</div>
</div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px"><font style="font-style: italic; text-decoration: underline">
Stock-Based Compensation Expense (&#x201C;SBCE&#x201D;)</font>
&#x2013;</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">SBCE
varies in any given quarter or year as it is a function of several
factors including the number of stock options issued in the period
and the period of amortization (based on the term of the contract
and/or number of years for full vesting of the options, which is
normally three years) of the resultant expense. Also, SBCE is a
function of periodic changes in the inputs used in the
Black-Scholes option valuation model, such as volatility in NXT's
trailing share price.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">SBCE in
2019 was lower compared to 2018 by $342,345. In Q1 2018, 333,333
options vested resulting in substantial SBCE. In 2019, most options
previously issued by the Company had vested resulting in minimal
SBCE, partially offset by 100,000 options awarded to a
consultant.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">SBCE
was lower in 2018 versus 2017 as significant unvested options were
forfeited and almost all remaining options were fully vested early
2018.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">There
was a lower average number of options outstanding at the end of
2017 (total of 1,648,667 as compared to 3,321,001 at the end of
2016).</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div id="pgbrk" style="width: 100%; margin-left: 0px; text-indent: 0px; margin-right: 0px">
<div id="ftr">
<div style="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div id="pn" style="text-align: center"><font style="font-family: Times New Roman; font-size: 13px">30</font></div>
</div>
<div id="pb" style="text-align: center; page-break-after: always; margin-left: 0px; margin-right: 0px; margin-bottom: 6px; width: 100%; height: 1px; background-color: #000000">
<!--page break--></div>
<div id="hdr">
<div style="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px"><font style="font-style: italic; text-decoration: underline">
Amortization expense</font> &#x2013; consists of the following
amounts:</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div>
<table cellpadding="0" cellspacing="0" style="margin-right:0px;width:100%;font-size:inherit;font-family:inherit;margin-left:0px;">
<tr>
<td rowspan="1" style="vertical-align:bottom;width:64%;">
<div style="margin-left:0px;padding-bottom:1px;"><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td rowspan="1" style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; border-bottom: 1px solid rgb(0, 0, 0); display: inline-block; font-size: 11px;">
<div><font style="font-weight: bold; font-family: Times New Roman; color: rgb(0, 0, 0);">
2019</font></div>
</font><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px;">&#xA0;</font></div>
</td>
<td rowspan="1" style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; border-bottom: 1px solid rgb(0, 0, 0); display: inline-block; font-weight: bold; font-size: 11px;">
<div><font style="font-family: Times New Roman; color: rgb(0, 0, 0); font-weight: bold;">
2018</font></div>
</font><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font></div>
</td>
<td rowspan="1" style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; border-bottom: 1px solid rgb(0, 0, 0); display: inline-block; font-weight: bold; font-size: 11px;">
<div><font style="font-family: Times New Roman; color: rgb(0, 0, 0); font-weight: bold;">
2017</font></div>
</font><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font></div>
</td>
</tr><tr>
<td colspan="1" style="vertical-align:bottom;width:64%;">
<div style="text-align: left; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Amortization
of:</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;display:inline-block;">&#xA0;</font><font style="text-align: center; vertical-align:bottom;width:80%;display:inline-block;">
<div><font style="font-size:13px;font-family:Times New Roman;">&#xA0;</font></div>
</font><font style="text-align: left; vertical-align:bottom;width:10%;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;display:inline-block;">&#xA0;</font><font style="text-align: center; vertical-align:bottom;width:80%;display:inline-block;">
<div><font style="font-size:13px;font-family:Times New Roman;">&#xA0;</font></div>
</font><font style="text-align: left; vertical-align:bottom;width:10%;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;display:inline-block;">&#xA0;</font><font style="text-align: center; vertical-align:bottom;width:80%;display:inline-block;">
<div><font style="font-size:13px;font-family:Times New Roman;">&#xA0;</font></div>
</font><font style="text-align: left; vertical-align:bottom;width:10%;display:inline-block;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td colspan="1" style="vertical-align:bottom;width:64%;">
<div style="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 24px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Property
and equipment</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">$</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">96,448</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">$</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">105,534</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">$</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">212,841</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td colspan="1" style="vertical-align:bottom;width:64%;">
<div style="text-align: left; text-indent: 0px; margin-right: 0px; padding-bottom: 1px; margin-left: 24px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Intellectual
property</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">1,684,733</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">1,684,733</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">1,684,735</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td colspan="1" style="vertical-align:bottom;width:64%;">
<div style="margin-left:0px;"><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">1,781,181</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">1,790,267</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">1,897,576</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
</tr></table>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px"><font style="text-decoration: underline">
Property and equipment and related amortization
expense.</font><font style="font-family: Times New Roman">&#xA0;</font>Property and equipment
additions in 2019 was for acquiring and installing in its aircraft
a new transponder technology known as ADS-B. The U.S. Federal
Aviation Administration (the "FAA") and European Aviation Safety
Agency have mandated that all aircraft flying in designated
controlled airspaces must be equipped with ADS-B by January 1, 2020
(US airspace) and June 7, 2020 (European airspace). Total costs for
installing the ADS-B was approximately $208,000. This amortization
was offset as the Company uses the declining balance method of
depreciation, thereby having the effect of lowering amortization
each year on existing assets. In prior years most of our capital
investment in property and equipment was in computer hardware,
which is amortized on a 30% declining balance basis, such that
amortization is high in the initial year of capital investment.
Since 2016, annual capital spending has been minimal, resulting in
declining levels of amortization expense.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px"><font style="text-decoration: underline">
Intellectual property and related amortization
expense.</font><font style="font-family: Times New Roman">&#xA0;</font>NXT acquired specific
rights to utilize the proprietary SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font></font></font>
technology in global hydrocarbon exploration applications from the
inventor of the SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font></font></font>
technology, NXT's Chairman, President and Chief Executive Officer,
on August 31, 2015. The value attributed to the acquired IP assets
was $25.3 million. The IP assets are being amortized on a
straight-line basis over a 15-year period (future amortization
expense of $1,685,000 per year) and are also being subject to
ongoing tests of potential impairment of the recorded net book
value. No impairments were recognized in 2019, 2018 or
2017.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-weight: bold; color: #000000; font-family: Times New Roman; font-size: 13px">
Other Expense (Income)</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div>
<table cellpadding="0" cellspacing="0" style="margin-right:0px;width:100%;font-size:inherit;font-family:inherit;margin-left:0px;">
<tr>
<td rowspan="1" style="vertical-align:bottom;width:64%;">
<div style="margin-left:0px;padding-bottom:1px;"><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td rowspan="1" style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; border-bottom: 1px solid rgb(0, 0, 0); display: inline-block; font-size: 11px;">
<div><font style="font-weight: bold; font-family: Times New Roman;">2019</font></div>
</font><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px;">&#xA0;</font></div>
</td>
<td rowspan="1" style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; border-bottom: 1px solid rgb(0, 0, 0); display: inline-block; font-weight: bold; font-size: 11px;">
<div><font style="font-family: Times New Roman; font-weight: bold;">2018</font></div>
</font><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font></div>
</td>
<td rowspan="1" style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; border-bottom: 1px solid rgb(0, 0, 0); display: inline-block; font-weight: bold; font-size: 11px;">
<div><font style="font-family: Times New Roman; font-weight: bold;">2017</font></div>
</font><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td style="vertical-align:bottom;width:64%;">
<div style="text-align: left; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="font-family: Times New Roman; font-size: 13px">Interest expense
(income), net</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">$</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">(20,684</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">)</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">$</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">(62,004</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">)</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">$</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">4,485</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td style="vertical-align:bottom;width:64%;">
<div style="text-align: left; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="font-family: Times New Roman; font-size: 13px">Foreign exchange
(gain) loss</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">233,232</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">(19,852</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">)</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">69,676</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td style="vertical-align:bottom;width:64%;">
<div style="text-align: left; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="font-family: Times New Roman; font-size: 13px">Intellectual
property, R&amp;D and ARO</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">56,833</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">(43,428</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">)</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">91,370</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td style="vertical-align:bottom;width:64%;">
<div style="text-align: left; text-indent:0px;margin-right:0px;padding-bottom:1px;margin-left:0px;"><font style="font-family: Times New Roman; font-size: 13px">Gain on
extinguishment of liability</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; font-family:Times New Roman;vertical-align:bottom;font-size:13px;display:inline-block;width:5%;border-bottom:solid 1px #000000;">&#xA0;</font><font style="text-align: right; font-family:Times New Roman;vertical-align:bottom;font-size:13px;display:inline-block;width:75%;border-bottom:solid 1px #000000;">-</font><font style="text-align: left; font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; font-family:Times New Roman;vertical-align:bottom;font-size:13px;display:inline-block;width:5%;border-bottom:solid 1px #000000;">&#xA0;</font><font style="text-align: right; font-family:Times New Roman;vertical-align:bottom;font-size:13px;display:inline-block;width:75%;border-bottom:solid 1px #000000;">(185,661</font><font style="text-align: left; font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">)</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; font-family:Times New Roman;vertical-align:bottom;font-size:13px;display:inline-block;width:5%;border-bottom:solid 1px #000000;">&#xA0;</font><font style="text-align: right; font-family:Times New Roman;vertical-align:bottom;font-size:13px;display:inline-block;width:75%;border-bottom:solid 1px #000000;">&#xA0;</font><font style="text-align: left; font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td style="vertical-align:bottom;width:64%;">
<div style="margin-left:0px;padding-bottom:1px;"><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; font-family:Times New Roman;vertical-align:bottom;font-size:13px;display:inline-block;width:5%;border-bottom:solid 1px #000000;">&#xA0;</font><font style="text-align: right; font-family:Times New Roman;vertical-align:bottom;font-size:13px;display:inline-block;width:75%;border-bottom:solid 1px #000000;">269,381</font><font style="text-align: left; font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; font-family:Times New Roman;vertical-align:bottom;font-size:13px;display:inline-block;width:5%;border-bottom:solid 1px #000000;">&#xA0;</font><font style="text-align: right; font-family:Times New Roman;vertical-align:bottom;font-size:13px;display:inline-block;width:75%;border-bottom:solid 1px #000000;">(310,945</font><font style="text-align: left; font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">)</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; font-family:Times New Roman;vertical-align:bottom;font-size:13px;display:inline-block;width:5%;border-bottom:solid 1px #000000;">&#xA0;</font><font style="text-align: right; font-family:Times New Roman;vertical-align:bottom;font-size:13px;display:inline-block;width:75%;border-bottom:solid 1px #000000;">165,531</font><font style="text-align: left; font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
</tr></table>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px"><font style="text-decoration: underline">
Interest (income) expense, net.</font> This category of other
expenses includes interest income earned on short-term investments
netted by interest expense from financial lease obligations. Since
January 1,&#xA0;2019 interest on finance leases is included in this
account under the new lease accounting standard. 2019 interest
(income) expense net was $41,320 less than 2018, as lease interest
expense has offset income earned on guaranteed investment
certificates.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px"><font style="text-decoration: underline">
Foreign exchange loss (gain).</font> This category of other
expenses includes losses and gains caused by changes in the
relative currency exchange values of US dollars and CDN dollars.
The foreign exchange (gain) loss for the periods was primarily
caused by the translation of assets and liabilities in the Canadian
Company which were held in US$. The Company held significant assets
in US dollars at December 31, 2019, including accounts receivable,
cash and cash equivalents, short-term investments and the security
deposit for the aircraft, all of which have an effect on the
unrealized foreign exchange gain and loss. At December 31, 2019,
the Company had a significant foreign exchange loss which was the
result of the CDN dollar strengthening compared to May 2019 when
several of the US dollar assets were initially recorded. The
Company does not currently have the ability to enter hedging
contracts, but uses strategies to reduce the volatility of US
dollar assets including converting excess US dollars to CDN
dollars.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div id="pgbrk" style="width: 100%; margin-left: 0px; text-indent: 0px; margin-right: 0px">
<div id="ftr">
<div style="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div id="pn" style="text-align: center"><font style="font-family: Times New Roman; font-size: 13px">31</font></div>
</div>
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<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px"><font style="text-decoration: underline">
Intellectual property, R&amp;D and ARO</font> &#x2013; this total
includes costs incurred for the following:</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div>
<table cellpadding="0" cellspacing="0" style="margin-right:0px;width:100%;font-size:inherit;font-family:inherit;margin-left:0px;">
<tr>
<td rowspan="1" style="vertical-align:bottom;width:64%;">
<div style="margin-left:0px;padding-bottom:1px;"><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td rowspan="1" style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; border-bottom: 1px solid rgb(0, 0, 0); display: inline-block; font-size: 11px;">
<div><font style="font-weight: bold; font-family: Times New Roman;">2019</font></div>
</font><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px;">&#xA0;</font></div>
</td>
<td rowspan="1" style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; border-bottom: 1px solid rgb(0, 0, 0); display: inline-block; font-weight: bold; font-size: 11px;">
<div><font style="font-family: Times New Roman; font-weight: bold;">2018</font></div>
</font><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font></div>
</td>
<td rowspan="1" style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; border-bottom: 1px solid rgb(0, 0, 0); display: inline-block; font-weight: bold; font-size: 11px;">
<div><font style="font-family: Times New Roman; font-weight: bold;">2017</font></div>
</font><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td style="vertical-align:bottom;width:64%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="font-family: Times New Roman; font-size: 13px">Intellectual
property, R&amp;D and ARO</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">$</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">56,833</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">$&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">(43,428</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">)</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">$</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">86,604</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td style="vertical-align:bottom;width:64%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="font-family: Times New Roman; font-size: 13px">TSX
Listing</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">-</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">-</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">-</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td style="vertical-align:bottom;width:64%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;padding-bottom:1px;margin-left:0px;"><font style="font-family: Times New Roman; font-size: 13px">Other,
net</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; font-family:Times New Roman;vertical-align:bottom;font-size:13px;display:inline-block;width:5%;border-bottom:solid 1px #000000;">&#xA0;</font><font style="text-align: right; font-family:Times New Roman;vertical-align:bottom;font-size:13px;display:inline-block;width:75%;border-bottom:solid 1px #000000;">-</font><font style="text-align: left; font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; font-family:Times New Roman;vertical-align:bottom;font-size:13px;display:inline-block;width:5%;border-bottom:solid 1px #000000;">&#xA0;</font><font style="text-align: right; font-family:Times New Roman;vertical-align:bottom;font-size:13px;display:inline-block;width:75%;border-bottom:solid 1px #000000;">-</font><font style="text-align: left; font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; font-family:Times New Roman;vertical-align:bottom;font-size:13px;display:inline-block;width:5%;border-bottom:solid 1px #000000;">&#xA0;</font><font style="text-align: right; font-family:Times New Roman;vertical-align:bottom;font-size:13px;display:inline-block;width:75%;border-bottom:solid 1px #000000;">4,766</font><font style="text-align: left; font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td style="vertical-align:bottom;width:64%;">
<div style="margin-left:0px;padding-bottom:1px;"><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; font-family:Times New Roman;vertical-align:bottom;font-size:13px;display:inline-block;width:5%;border-bottom:solid 1px #000000;">&#xA0;</font><font style="text-align: right; font-family:Times New Roman;vertical-align:bottom;font-size:13px;display:inline-block;width:75%;border-bottom:solid 1px #000000;">56,833</font><font style="text-align: left; font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; font-family:Times New Roman;vertical-align:bottom;font-size:13px;display:inline-block;width:5%;border-bottom:solid 1px #000000;">&#xA0;</font><font style="text-align: right; font-family:Times New Roman;vertical-align:bottom;font-size:13px;display:inline-block;width:75%;border-bottom:solid 1px #000000;">(43,428</font><font style="text-align: left; font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">)</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; font-family:Times New Roman;vertical-align:bottom;font-size:13px;display:inline-block;width:5%;border-bottom:solid 1px #000000;">&#xA0;</font><font style="text-align: right; font-family:Times New Roman;vertical-align:bottom;font-size:13px;display:inline-block;width:75%;border-bottom:solid 1px #000000;">91,370</font><font style="text-align: left; font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
</tr></table>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">This
category includes primarily costs related to IP filings and R&amp;D
activity related to the SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font></font></font>
technology and costs for certain non-recurring, "project"
activities.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">In
2019, the Company's IP, R&amp;D and ARO expenses related mostly to
costs associated with the validation process for certain European
SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font></font></font>
patents. In 2018, these costs were negative as the Company
renegotiated fees from a provider of R&amp;D services.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">In
2018, the Company's Intellectual property and R&amp;D expenses were
negative as it incurred less costs from a provider of services than
originally estimated. The Company also updated estimates for
several asset retirement obligations related to minor non-operated
interests in oil and natural gas wells in which NXT has outstanding
abandonment and reclamation obligations in accordance with
government regulations were significantly reduced in
Q4-18.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px"><font style="text-decoration: underline">
Gain on Extinguishment of Liability</font> - In Q3-18, the Company
determined that liabilities it had recorded before 2005 were no
longer payable. As a result, a gain of $185,661 was recorded in
other income on the extinguishment of the liability. No cash was
paid to settle the liability.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">For
2017 YTD, other expenses consisted primarily of costs incurred to
secure a patent for SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font></font></font>
in the U.S. and to continue to develop SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font></font></font>
technology.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">For
2017, Intellectual property and R&amp;D costs consisted primarily
of costs incurred to secure a patent for SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font></font></font>
in the U.S. and to continue to develop SFD<font style="font-size: 70%; vertical-align: top">&#xAE;</font>
technology.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Other
expenses includes primarily discretionary costs related to
intellectual property / patent filings and R&amp;D activity related
to the SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font></font></font>
technology.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="color: #000000; font-family: Times New Roman; font-size: 13px">
We currently have no other outstanding derivative financial
instruments, such as foreign currency hedges.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px"><font style="font-style: italic; text-decoration: underline">
Income tax expense</font> &#x2013; There was no income tax expense
in 2019 or 2018.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">NXT
periodically earns revenues while operating outside of Canada as a
non-resident within certain foreign jurisdictions and services
rendered to clients in such countries may be subject to foreign
withholding taxes, which are only recoverable in certain limited
circumstances. Income tax expense for 2017 is a result of
withholding taxes that were incurred on charges related to the
Bolivia survey project. There was no income tax expense in Canada
or Bolivia during 2018.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">
A total net income tax was recognized as follows:</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px;">&#xA0;</font></div>
<div>
<table cellpadding="0" cellspacing="0" style="margin-right:0px;width:100%;font-size:inherit;font-family:inherit;margin-left:0px;">
<tr>
<td rowspan="1" style="vertical-align:bottom;width:64%;">
<div style="margin-left:0px;padding-bottom:1px;"><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td rowspan="1" style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; border-bottom: 1px solid rgb(0, 0, 0); display: inline-block; font-size: 11px;">
<div><font style="font-weight: bold; font-family: Times New Roman; color: rgb(0, 0, 0);">
2019</font></div>
</font><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px;">&#xA0;</font></div>
</td>
<td rowspan="1" style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; border-bottom: 1px solid rgb(0, 0, 0); display: inline-block; font-weight: bold; font-size: 11px;">
<div><font style="font-family: Times New Roman; color: rgb(0, 0, 0); font-weight: bold;">
2018</font></div>
</font><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font></div>
</td>
<td rowspan="1" style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; border-bottom: 1px solid rgb(0, 0, 0); display: inline-block; font-weight: bold; font-size: 11px;">
<div><font style="font-family: Times New Roman; color: rgb(0, 0, 0); font-weight: bold;">
2017</font></div>
</font><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td style="vertical-align:bottom;width:64%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;padding-bottom:1px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Foreign
with-holding taxes incurred</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">$</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">$</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">$</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">75,545</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td style="vertical-align:bottom;width:64%;">
<div style="margin-left:0px;"><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">75,545</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td style="vertical-align:bottom;width:64%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Foreign
corporate taxes incurred</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td style="vertical-align:bottom;width:64%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Less
portion accrued at Dec 2015</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td style="vertical-align:bottom;width:64%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;padding-bottom:1px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Corporate
income tax expense &#x2013; foreign</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">75,545</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td style="vertical-align:bottom;width:64%;">
<div style="margin-left:0px;"><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">75,545</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td style="vertical-align:bottom;width:64%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;padding-bottom:1px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Deferred
tax recovery</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td style="vertical-align:bottom;width:64%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;padding-bottom:1px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Net
tax expense (recovery)</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">75,545</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
</tr></table>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div id="pgbrk" style="width: 100%; margin-left: 0px; text-indent: 0px; margin-right: 0px">
<div id="ftr">
<div style="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div id="pn" style="text-align: center"><font style="font-family: Times New Roman; font-size: 13px">32</font></div>
</div>
<div id="pb" style="text-align: center; page-break-after: always; margin-left: 0px; margin-right: 0px; margin-bottom: 6px; width: 100%; height: 1px; background-color: #000000">
<!--page break--></div>
<div id="hdr">
<div style="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">At the
end of 2019, NXT has available for future Canadian income tax
deduction purposes significant unrecorded deferred income tax
assets, the benefit of which has not been recorded in the
Company&#x2019;s financial statements due to uncertainty regarding
the amount and timing of their potential future utilization. These
deferred income tax assets include non-capital losses
carried-forward (expiring in 2027 to 2039) and other resource
deductions totaling approximately $39.4 million.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">
Summary of Quarterly Results (Unaudited)</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">A
summary of operating results for each of the trailing 8 quarters
(including a comparison to each respective prior quarter) follows.
The extent of the profit or loss each quarter is mainly due to the
timing and the number of survey contracts that are underway, and
variances in such non-cash items as SBCE, which can occasionally be
a significant expense in any given quarter</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
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<div>
<table cellpadding="0" cellspacing="0" style="margin-right:0px;width:100%;font-size:inherit;font-family:inherit;margin-left:0px;">
<tr>
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<div style="margin-left:0px;"><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td rowspan="1" style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; display: inline-block; vertical-align: bottom; width: 10%; font-weight: bold; font-size: 11px;">&#xA0;</font><font style="text-align: center; display: inline-block; vertical-align: bottom; width: 80%; font-weight: bold; font-size: 11px;">
<div><font style="font-family: Times New Roman; font-weight: bold;">Q4-19</font><font style="font-family: Times New Roman; font-weight: bold;">&#xA0;</font></div>
</font><font style="text-align: left; display: inline-block; vertical-align: bottom; width: 10%; font-weight: bold; font-size: 11px;">&#xA0;</font></div>
</td>
<td rowspan="1" style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; display: inline-block; vertical-align: bottom; width: 10%; font-weight: bold; font-size: 11px;">&#xA0;</font><font style="text-align: center; display: inline-block; vertical-align: bottom; width: 80%; font-weight: bold; font-size: 11px;">
<div><font style="font-family: Times New Roman; font-weight: bold;">Q3-19</font><font style="font-family: Times New Roman; font-weight: bold;">&#xA0;</font></div>
</font><font style="text-align: left; display: inline-block; vertical-align: bottom; width: 10%; font-weight: bold; font-size: 11px;">&#xA0;</font></div>
</td>
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<div><font style="text-align: left; display: inline-block; vertical-align: bottom; width: 10%; font-weight: bold; font-size: 11px;">&#xA0;</font><font style="text-align: center; display: inline-block; vertical-align: bottom; width: 80%; font-weight: bold; font-size: 11px;">
<div><font style="font-family: Times New Roman; font-weight: bold;">Q2-19</font><font style="font-family: Times New Roman; font-weight: bold;">&#xA0;</font></div>
</font><font style="text-align: left; display: inline-block; vertical-align: bottom; width: 10%; font-weight: bold; font-size: 11px;">&#xA0;</font></div>
</td>
<td colspan="1" rowspan="1" style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; display: inline-block; vertical-align: bottom; width: 10%; font-weight: bold; font-size: 11px;">&#xA0;</font><font style="text-align: center; display: inline-block; vertical-align: bottom; width: 80%; font-weight: bold; font-size: 11px;">
<div><font style="font-family: Times New Roman; font-weight: bold;">Q1-19</font><font style="font-family: Times New Roman; font-weight: bold;">&#xA0;</font></div>
</font><font style="text-align: left; display: inline-block; vertical-align: bottom; width: 10%; font-weight: bold; font-size: 11px;">&#xA0;</font></div>
</td>
</tr><tr>
<td style="vertical-align:bottom;width:52%;">
<div style="margin-left: 0px; padding-bottom: 1px;"><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; display: inline-block; vertical-align: bottom; width: 10%; padding-bottom: 1px; font-weight: bold; font-size: 11px;">&#xA0;</font><font style="text-align: center; display: inline-block; vertical-align: bottom; width: 80%; border-bottom: 1px solid rgb(0, 0, 0); font-weight: bold; font-size: 11px;">
<div style="margin-left:0px;"><font style="text-align: left; vertical-align: bottom; display: inline-block; font-weight: bold;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; display: inline-block; font-weight: bold;">
<div style="text-align: right; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-weight: bold;">Dec
31, 2019</font></div>
</font><font style="text-align: left; vertical-align: bottom; display: inline-block; font-weight: bold;">&#xA0;</font></div>
</font><font style="text-align: left; display: inline-block; vertical-align: bottom; width: 10%; padding-bottom: 1px; font-weight: bold; font-size: 11px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; display: inline-block; vertical-align: bottom; width: 10%; padding-bottom: 1px; font-weight: bold; font-size: 11px;">&#xA0;</font><font style="text-align: center; display: inline-block; vertical-align: bottom; width: 80%; border-bottom: 1px solid rgb(0, 0, 0); font-weight: bold; font-size: 11px;">
<div><font style="font-weight: bold;">&#xA0;</font><font style="font-family: Times New Roman; font-weight: bold;">Sep 30,
2019</font><font style="font-weight: bold;">&#xA0;</font></div>
</font><font style="text-align: left; display: inline-block; vertical-align: bottom; width: 10%; padding-bottom: 1px; font-weight: bold; font-size: 11px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; padding-bottom: 1px; font-weight: bold; font-size: 11px;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; display: inline-block; border-bottom: 1px solid rgb(0, 0, 0); font-weight: bold; font-size: 11px;">
<div><font style="font-family: Times New Roman; font-weight: bold;">Jun 30,
2019</font></div>
</font><font style="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; padding-bottom: 1px; font-weight: bold; font-size: 11px;">&#xA0;</font></div>
</td>
<td colspan="1" style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; padding-bottom: 1px; font-weight: bold; font-size: 11px;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; display: inline-block; border-bottom: 1px solid rgb(0, 0, 0); font-weight: bold; font-size: 11px;">
<div><font style="font-family: Times New Roman; font-weight: bold;">&#xA0;Mar
31,&#xA0;2019</font> <font style="font-family: Times New Roman; font-weight: bold;">&#xA0;</font></div>
</font><font style="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; padding-bottom: 1px; font-weight: bold; font-size: 11px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color: rgb(204, 238, 255);">
<td style="vertical-align:bottom;width:52%;">
<div style="text-align: left; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="font-family: Times New Roman; font-size: 13px">Survey
revenue</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">$</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">-</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">$</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">1,021,532</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">$</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">10,954,617</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
<td colspan="1" style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">$</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">-</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
</tr><tr>
<td style="vertical-align:bottom;width:52%;">
<div style="text-align: left; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="font-family: Times New Roman; font-size: 13px">Net income
(loss)</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">(1,775,287</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">)</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">(774,373</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">)</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">8,085,888</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
<td colspan="1" style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">(1,763,320</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">)</font></div>
</td>
</tr><tr style="background-color: rgb(204, 238, 255);">
<td style="vertical-align:bottom;width:52%;">
<div style="text-align: left; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="font-family: Times New Roman; font-size: 13px">Income (loss) per
share - basic</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">(0.03</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">)</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">(0.01</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">)</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">0.12</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
<td colspan="1" style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">(0.03</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">)</font></div>
</td>
</tr><tr>
<td style="vertical-align:bottom;width:52%;">
<div style="text-align: left; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="font-family: Times New Roman; font-size: 13px">Income (loss) per
share - diluted</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">(0.03</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">)</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">(0.01</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">)</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">0.11</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
<td colspan="1" style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">(0.03</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">)</font></div>
</td>
</tr></table>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div>
<table cellpadding="0" cellspacing="0" style="margin-right:0px;width:100%;font-size:inherit;font-family:inherit;margin-left:0px;">
<tr>
<td rowspan="1" style="vertical-align:bottom;width:52%;">
<div style="margin-left:0px;"><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td rowspan="1" style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; font-size: 11px; font-weight: bold;">&#xA0;</font><font style="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%; font-size: 11px; font-weight: bold;">&#xA0;</font><font style="text-align: center; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%; font-size: 11px; font-weight: bold;">Q4-18</font><font style="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; font-size: 11px; font-weight: bold;">&#xA0;</font></div>
</td>
<td rowspan="1" style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; font-size: 11px; font-weight: bold;">&#xA0;</font><font style="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%; font-size: 11px; font-weight: bold;">&#xA0;</font><font style="text-align: center; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%; font-size: 11px; font-weight: bold;">Q3-18</font><font style="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; font-size: 11px; font-weight: bold;">&#xA0;</font></div>
</td>
<td rowspan="1" style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; font-size: 11px; font-weight: bold;">&#xA0;</font><font style="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%; font-size: 11px; font-weight: bold;">&#xA0;</font><font style="text-align: center; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%; font-size: 11px; font-weight: bold;">Q2-18</font><font style="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; font-size: 11px; font-weight: bold;">&#xA0;</font></div>
</td>
<td rowspan="1" style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; font-size: 11px; font-weight: bold;">&#xA0;</font><font style="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%; font-size: 11px; font-weight: bold;">&#xA0;</font><font style="text-align: center; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%; font-size: 11px; font-weight: bold;">Q1-18</font><font style="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; font-size: 11px; font-weight: bold;">&#xA0;</font></div>
</td>
</tr><tr>
<td style="vertical-align:bottom;width:52%;">
<div style="margin-left: 0px; padding-bottom: 1px;"><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; display: inline-block; vertical-align: bottom; width: 10%; padding-bottom: 1px; font-weight: bold; font-size: 11px;">&#xA0;</font><font style="text-align: center; display: inline-block; vertical-align: bottom; width: 80%; border-bottom: 1px solid rgb(0, 0, 0); font-weight: bold; font-size: 11px;">
<div style="margin-left:0px;"><font style="text-align: left; vertical-align: bottom; display: inline-block; font-weight: bold;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; display: inline-block; font-weight: bold;">
<div style="text-align: right; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-weight: bold;">Dec
31, 2018</font></div>
</font><font style="text-align: left; vertical-align: bottom; display: inline-block; font-weight: bold;">&#xA0;</font></div>
</font><font style="text-align: left; display: inline-block; vertical-align: bottom; width: 10%; padding-bottom: 1px; font-weight: bold; font-size: 11px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; padding-bottom: 1px; font-weight: bold; font-size: 11px;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; display: inline-block; border-bottom: 1px solid rgb(0, 0, 0); font-weight: bold; font-size: 11px;">
<div><font style="font-family: Times New Roman; font-weight: bold;">Sep 30,
201<font style="color: rgb(0, 0, 0); font-weight: bold;">8</font></font></div>
</font><font style="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; padding-bottom: 1px; font-weight: bold; font-size: 11px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; padding-bottom: 1px; font-weight: bold; font-size: 11px;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; display: inline-block; border-bottom: 1px solid rgb(0, 0, 0); font-weight: bold; font-size: 11px;">
<div><font style="font-family: Times New Roman; font-weight: bold;">Jun 30,
201<font style="color: rgb(0, 0, 0); font-weight: bold;">8</font></font></div>
</font><font style="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; padding-bottom: 1px; font-weight: bold; font-size: 11px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; padding-bottom: 1px; font-weight: bold; font-size: 11px;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; display: inline-block; border-bottom: 1px solid rgb(0, 0, 0); font-weight: bold; font-size: 11px;">
<div><font style="font-family: Times New Roman; font-weight: bold;">Mar
31,&#xA0;201<font style="color: rgb(0, 0, 0); font-weight: bold;">8</font></font></div>
</font><font style="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; padding-bottom: 1px; font-weight: bold; font-size: 11px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color: rgb(204, 238, 255);">
<td style="vertical-align:bottom;width:52%;">
<div style="text-align: left; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Survey
revenue</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">$</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">$</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">$</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">$</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr>
<td style="vertical-align:bottom;width:52%;">
<div style="text-align: left; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Net
income (loss)</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">(1,392,716</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">)</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">(1,660,031</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">)</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">(1,961,114</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">)</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">(1,954,650</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">)</font></div>
</td>
</tr><tr style="background-color: rgb(204, 238, 255);">
<td style="vertical-align:bottom;width:52%;">
<div style="text-align: left; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Income
(loss) per share - basic</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">(0.02</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">)</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">(0.02</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">)</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">(0.03</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">)</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">(0.03</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">)</font></div>
</td>
</tr><tr>
<td style="vertical-align:bottom;width:52%;">
<div style="text-align: left; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Income
(loss) per share - diluted</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">(0.02</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">)</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">(0.02</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">)</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">(0.03</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">)</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">(0.03</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">)</font></div>
</td>
</tr></table>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">&#xA0;
<font style="font-family: Times New Roman; font-size: 13px"><br>
</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-style: italic; font-family: Times New Roman; font-size: 13px">
Significant or Unusual Items Impacting Net Income
(Loss):</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">In
Q4-19, SBCE was lower as most outstanding options were fully
vested. In Q3-19, NXT recognized $1,021,532 of revenue for services
rendered in connection with the Nigerian SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font></font></font>
Survey, compared to $10,954,617 in Q2-19. There were no revenues in
the previous five quarters, rather, the Company incurred net losses
in each due primarily to survey costs (related to aircraft lease
and aircraft maintenance costs), G&amp;A expenses and non-cash
items like SBCE, which can be a significant expense in any given
quarter, as detailed more specifically below:</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="margin-left: 36px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">in Q1-19, survey
costs were higher due to scheduled maintenance on the aircraft and
significant legal and contract negation costs in preparing for the
Nigerian SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font></font></font>
Survey;</font></div>
</div>
</div>
<div style="margin-left: 36px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">In Q4-18, SBCE was
lower by $283,811 as unvested options were forfeited. In addition,
G&amp;A costs decreased $156,271 for two reasons. Firstly, business
development decreased as most of the business development work was
centred in Calgary supporting Nigerian SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font></font></font>
survey negotiations. Secondly, there was a decrease in public
company costs as the previous quarter had significant costs related
to the Private Placement. Offsetting this was an increase of
$44,010 in survey expenses as NXT&#x2019;s aircraft incurred a
scheduled major maintenance in December 2018.</font></div>
</div>
</div>
<div style="margin-left: 36px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">In Q3-18, a gain of
$185,661 has been recognized on the extinguishment of a liability
that was recorded before 2005 which is no longer payable. Also,
interest income of $26,171 was earned on cash received from the
Private Placement.</font></div>
</div>
</div>
<div style="margin-left: 36px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">In Q1-18, G&amp;A
costs were lower as NXT began to recognize the full extent of cost
reductions started in the prior quarter.</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div id="pgbrk" style="width: 100%; margin-left: 0px; text-indent: 0px; margin-right: 0px">
<div id="ftr">
<div style="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div id="pn" style="text-align: center"><font style="font-family: Times New Roman; font-size: 13px">33</font></div>
</div>
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<div id="hdr">
<div style="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="display: table">
<div style="display: table-row">
<div style="display: table-cell; width: 48px"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">B.&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">Liquidity
and capital resources.</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-weight: bold; font-style: italic; font-family: Times New Roman; font-size: 13px">
Going Concern</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">The
consolidated financial statements for 2019 have been prepared on a
going concern basis.&#xA0; The going concern basis of presentation
assumes that NXT will continue in operation for the foreseeable
future and will be able to realize its assets and discharge its
liabilities and commitments in the normal course of
business.&#xA0;</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">NXT's
financial statements for 2018 included disclosure related to the
use of the "going concern" basis of presentation. In 2019, NXT has
had positive cash flow from operations which has resulted in a
significant strengthening of the Company's liquidity and working
capital position. As a consequence, management is of the view that
removal of the "going concern" disclosure in respect of its 2019
disclosure is warranted on the basis than the Company currently has
sufficient funds to maintain operations for the next 12 months as
of the date of these financial statements.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">In the
preparation of the 2019 financial statements, management determined
that there are no existing conditions or reasonably foreseeable
events that raise substantial doubt about the Company's ability to
continue as a going concern. However, NXT's future financial
results and its longer term success remains dependent upon the
ability to continue to attract and execute client projects to build
its revenue base. NXT continues to develop its pipeline of
opportunities to secure new revenue contracts. However, the
Company's longer-term success remains dependent upon its ability to
convert these opportunities into successful contracts and to
continue to attract new client projects and expand the revenue base
to a level sufficient to exceed fixed operating costs and continue
to generate positive cash flow from operations.&#xA0; The
occurrence and timing of these events cannot be predicted with
certainty.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">NXT's
cash and cash equivalents plus short-term investments at December
31, 2019 totaled $<font style="color: #000000">6.64 million</font>.
Net working capital totaled $7.13 million.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">As NXT
is operating on a going concern basis, NXT's short-term ability to
generate sufficient cash depends on the success of signing
contracts and receiving advance payments pursuant to the terms of
such agreements<font style="font-weight: bold">.</font> NXT's
longer-term success remains dependent upon our ability to continue
to attract new client projects and expand the revenue base to a
level sufficient to exceed G&amp;A expenses and generate excess net
cash flow from operations<font style="color: #000000">. Proceeds
from past equity financings have been used to provide NXT with
funds to pursue, close and implement commercial transactions
currently in negotiation, develop additional revenue streams
including multi-client data sales and strategic partnerships and
for general corporate and net working capital
purposes.</font></font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Risks
related to having sufficient ongoing net working capital to execute
survey project contracts are mitigated through our normal practice
of obtaining advance payments and progress payments from customers
throughout the course of the projects, which often span three to
four months. In addition, where possible, risk of default on client
billings has been mitigated through the use of export insurance
programs offered by Export Development Canada.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">In
2019, NXT continued to make progress in strengthening its liquidity
and net working capital by completing the Nigerian SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font></font></font>
Survey and reducing corporate costs by reducing the number of
staff<font style="color: #1F497D">&#xA0;</font>and by implementing
new human resource policies to reduce staffing costs.<font style="font-weight: bold; color: #1F497D">&#xA0;</font>Please see the
discussion under "<font style="font-style: italic">Summary of
Operating Results &#x2013; General and Administrative
Expenses</font>" for the results of these cost
reductions.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">As of
the date of this 20-F, NXT has sufficient funds to maintain its
operations for more than 12 months. The Company does not have
provisions in its leases, contracts, or other arrangements that
would trigger additional funding requirements or early
payments.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div id="pgbrk" style="width: 100%; margin-left: 0px; text-indent: 0px; margin-right: 0px">
<div id="ftr">
<div style="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div id="pn" style="text-align: center"><font style="font-family: Times New Roman; font-size: 13px">34</font></div>
</div>
<div id="pb" style="text-align: center; page-break-after: always; margin-left: 0px; margin-right: 0px; margin-bottom: 6px; width: 100%; height: 1px; background-color: #000000">
<!--page break--></div>
<div id="hdr">
<div style="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">If the
Company were to default on its office lease, the current month rent
plus the next three months become immediately due. If the Company
were to default on the aircraft lease, the Company would be
required to deliver the aircraft back to the Lessor.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">This
discussion includes references to the term &#x201C;net working
capital&#x201D;, which do not have a standardized meaning prescribed
by U.S. GAAP and may not be comparable to similar measures
presented by other entities.&#xA0; NXT management uses this
non-GAAP measure&#xA0;to improve our ability to assess liquidity at
a point in time.&#xA0; Net working capital is defined as total
current assets less total current liabilities, excluding amounts
accumulated in work in progress and deferred revenue.&#xA0;
Management excludes these amounts from the calculation as they do
not represent future cash inflows or outflows to the
Company.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">NXT had
no secured debt and had net working capital of $7,129,182 as at
December 31, 2019 as follows:</font></div>
<div style="null"><font>&#xA0;</font></div>
<div>
<table cellpadding="0" cellspacing="0" style="margin-right:0px;width:100%;font-size:inherit;font-family:inherit;margin-left:0px;">
<tr>
<td rowspan="1" style="vertical-align:bottom;width:64%;">
<div style="margin-left:0px;"><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td colspan="1" rowspan="1" style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-weight: bold; font-size: 11px;">
<div><font style="font-family: Times New Roman; color: rgb(0, 0, 0); font-weight: bold;">
<font style="font-family: Times New Roman; color: rgb(0, 0, 0); font-weight: bold;">
December 31,</font></font></div>
</font><font style="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font></div>
</td>
<td rowspan="1" style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-weight: bold; font-size: 11px;">
<div><font style="font-family: Times New Roman; color: rgb(0, 0, 0); font-weight: bold;">
<font style="font-family: Times New Roman; color: rgb(0, 0, 0); font-weight: bold;">
December 31,</font> &#xA0;</font></div>
</font><font style="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font></div>
</td>
<td rowspan="1" style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-weight: bold; font-size: 11px;">
<div><font style="font-family: Times New Roman; color: rgb(0, 0, 0); font-weight: bold;">
net change&#xA0;</font></div>
</font><font style="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font></div>
</td>
</tr><tr>
<td style="vertical-align:bottom;width:64%;">
<div style="margin-left: 0px; padding-bottom: 1px;"><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td colspan="1" style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; padding-bottom: 1px; font-weight: bold; font-size: 11px;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; display: inline-block; border-bottom: 1px solid rgb(0, 0, 0); font-weight: bold; font-size: 11px;">
<div><font style="font-family: Times New Roman; color: rgb(0, 0, 0); font-weight: bold;">
2019</font></div>
</font><font style="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; padding-bottom: 1px; font-weight: bold; font-size: 11px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; padding-bottom: 1px; font-weight: bold; font-size: 11px;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; display: inline-block; border-bottom: 1px solid rgb(0, 0, 0); font-weight: bold; font-size: 11px;">
<div><font style="font-family: Times New Roman; color: rgb(0, 0, 0); font-weight: bold;">
2018</font></div>
</font><font style="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; padding-bottom: 1px; font-weight: bold; font-size: 11px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; padding-bottom: 1px; font-weight: bold; font-size: 11px;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; display: inline-block; border-bottom: 1px solid rgb(0, 0, 0); font-weight: bold; font-size: 11px;">
<div><font style="font-family: Times New Roman; color: rgb(0, 0, 0); font-weight: bold;">
in 2019</font></div>
</font><font style="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; padding-bottom: 1px; font-weight: bold; font-size: 11px;">&#xA0;</font></div>
</td>
</tr><tr>
<td style="vertical-align:bottom;width:64%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Current
assets (current liabilities):</font></div>
</td>
<td colspan="1" style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;display:inline-block;">&#xA0;</font><font style="text-align: center; vertical-align:bottom;width:80%;display:inline-block;">
<div><font style="font-size:13px;font-family:Times New Roman;">&#xA0;</font></div>
</font><font style="text-align: left; vertical-align:bottom;width:10%;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;display:inline-block;">&#xA0;</font><font style="text-align: center; vertical-align:bottom;width:80%;display:inline-block;">
<div><font style="font-size:13px;font-family:Times New Roman;">&#xA0;</font></div>
</font><font style="text-align: left; vertical-align:bottom;width:10%;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;display:inline-block;">&#xA0;</font><font style="text-align: center; vertical-align:bottom;width:80%;display:inline-block;">
<div><font style="font-size:13px;font-family:Times New Roman;">&#xA0;</font></div>
</font><font style="text-align: left; vertical-align:bottom;width:10%;display:inline-block;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td style="vertical-align:bottom;width:64%;">
<div style="text-align: left; text-indent:24px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Cash
and cash equivalents</font></div>
</td>
<td colspan="1" style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">$</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">2,858,245</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">$&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">339,532</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">$</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">2,518,713</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td style="vertical-align:bottom;width:64%;">
<div style="text-align: left; text-indent:24px;margin-right:0px;padding-bottom:1px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Short-term
investments</font></div>
</td>
<td colspan="1" style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">3,781,512</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">3,900,000</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">(118,488</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">)</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td style="vertical-align:bottom;width:64%;">
<div style="margin-left:0px;"><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td colspan="1" style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">6,639,757</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">4,239,532</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">2,400,225</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td style="vertical-align:bottom;width:64%;">
<div style="text-align: left; text-indent:24px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Accounts
receivable</font></div>
</td>
<td colspan="1" style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">1,384,315</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">61,279</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">1,323,036</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td style="vertical-align:bottom;width:64%;">
<div style="text-align: left; text-indent:24px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Note
receivable</font></div>
</td>
<td colspan="1" style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">324,700</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">324,700</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td style="vertical-align:bottom;width:64%;">
<div style="text-align: left; text-indent:24px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Prepaid
expenses and deposits</font></div>
</td>
<td colspan="1" style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">97,132</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">65,159</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">31,973</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td style="vertical-align:bottom;width:64%;">
<div style="text-align: left; text-indent:24px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Accounts
payable and accrued liabilities</font></div>
</td>
<td colspan="1" style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">(448,928</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">)</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">(499,535</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">)</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">50,607</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td style="vertical-align:bottom;width:64%;">
<div style="text-align: left; text-indent:24px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Contract
obligations</font></div>
</td>
<td colspan="1" style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">(131,386</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">)</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">(131,386</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">)</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td style="vertical-align:bottom;width:64%;">
<div style="text-align: left; text-indent:24px;margin-right:0px;padding-bottom:1px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Current
portion of capital lease obligation</font></div>
</td>
<td colspan="1" style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">(736,408</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">)</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">(42,603</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">)</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">(693,805</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">)</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td style="vertical-align:bottom;width:64%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;padding-bottom:1px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Net
Working Capital</font></div>
</td>
<td colspan="1" style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">7,129,182</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">3,823,832</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">3,305,350</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
</tr></table>
</div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">The
increase in net working capital in 2019 was due to recognizing
accounts receivable, cash from the Nigerian SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font></font></font>
Survey and the note receivable in respect of the Loan Arrangement.
This increase was offset due to the recognition of the current
portion of lease obligations under ASC Topic 842 ("Topic 842") and
contract obligations (deposit) received from AGV for the
Co-operation Agreement.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="text-decoration: underline; font-style: italic; font-family: Times New Roman; font-size: 13px">
Sources and uses of cash</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">The
overall net changes in cash balances in each of the periods noted
above is a function of several factors including any inflows
(outflows) due to changes in net working capital balances and net
of any cash transferred into/out of short-term investments. Further
information on the net changes in cash, by each of the operating,
financing and investing activities, at the end of the periods, for
the last three fiscal years is as follows:</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div>
<table cellpadding="0" cellspacing="0" style="margin-right:0px;width:100%;font-size:inherit;font-family:inherit;margin-left:0px;">
<tr>
<td rowspan="1" style="vertical-align:bottom;width:64%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;padding-bottom:1px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">For
the year ended December 31</font></div>
</td>
<td rowspan="1" style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; border-bottom: 1px solid rgb(0, 0, 0); display: inline-block; font-weight: bold; font-size: 11px;">
<div><font style="font-family: Times New Roman; color: rgb(0, 0, 0); font-weight: bold;">
2019</font></div>
</font><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font></div>
</td>
<td rowspan="1" style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; border-bottom: 1px solid rgb(0, 0, 0); display: inline-block; font-weight: bold; font-size: 11px;">
<div><font style="font-family: Times New Roman; color: rgb(0, 0, 0); font-weight: bold;">
2018</font></div>
</font><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font></div>
</td>
<td rowspan="1" style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; border-bottom: 1px solid rgb(0, 0, 0); display: inline-block; font-weight: bold; font-size: 11px;">
<div><font style="font-family: Times New Roman; color: rgb(0, 0, 0); font-weight: bold;">
2017</font></div>
</font><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font></div>
</td>
</tr><tr>
<td style="vertical-align:bottom;width:64%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Cash
provided by (used in):</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;display:inline-block;">&#xA0;</font><font style="text-align: center; vertical-align:bottom;width:80%;display:inline-block;">
<div><font style="font-size:13px;font-family:Times New Roman;">&#xA0;</font></div>
</font><font style="text-align: left; vertical-align:bottom;width:10%;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;display:inline-block;">&#xA0;</font><font style="text-align: center; vertical-align:bottom;width:80%;display:inline-block;">
<div><font style="font-size:13px;font-family:Times New Roman;">&#xA0;</font></div>
</font><font style="text-align: left; vertical-align:bottom;width:10%;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;display:inline-block;">&#xA0;</font><font style="text-align: center; vertical-align:bottom;width:80%;display:inline-block;">
<div><font style="font-size:13px;font-family:Times New Roman;">&#xA0;</font></div>
</font><font style="text-align: left; vertical-align:bottom;width:10%;display:inline-block;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td style="vertical-align:bottom;width:64%;">
<div style="text-align: left; text-indent:24px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Operating
activities</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">$&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">4,078,427</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">$&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">(6,043,919</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">)</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">$&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">(5,464,679</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">)</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td style="vertical-align:bottom;width:64%;">
<div style="text-align: left; text-indent:24px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Financing
activities</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">(1,385,787</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">)</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">9,176,839</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">2,022,943</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td style="vertical-align:bottom;width:64%;">
<div style="text-align: left; text-indent:24px;margin-right:0px;padding-bottom:1px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Investing
activities</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">(173,927</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">)</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">(2,960,006</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">)</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">3,117,858</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td style="vertical-align:bottom;width:64%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Net
cash inflow (outflow)</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">2,518,713</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">172,914</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">(323,878</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">)</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td style="vertical-align:bottom;width:64%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;padding-bottom:1px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Cash
&amp; cash equivalents, start of the year</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">339,532</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">166,618</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">490,496</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td style="vertical-align:bottom;width:64%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;padding-bottom:1px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Cash
&amp; cash equivalents, end of the year</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">2,858,245</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">339,532</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">166,618</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td style="vertical-align:bottom;width:64%;">
<div style="margin-left:0px;"><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td style="vertical-align:bottom;width:64%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Cash
&amp; cash equivalents</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">2,858,245</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">339,532</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">166,618</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td style="vertical-align:bottom;width:64%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;padding-bottom:1px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Short-term
investments</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">3,781,512</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">3,900,000</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">950,000</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td style="vertical-align:bottom;width:64%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;padding-bottom:1px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Total</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">6,639,757</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">4,239,532</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">1,116,618</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
</tr></table>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div id="pgbrk" style="width: 100%; margin-left: 0px; text-indent: 0px; margin-right: 0px">
<div id="ftr">
<div style="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div id="pn" style="text-align: center"><font style="font-family: Times New Roman; font-size: 13px">35</font></div>
</div>
<div id="pb" style="text-align: center; page-break-after: always; margin-left: 0px; margin-right: 0px; margin-bottom: 6px; width: 100%; height: 1px; background-color: #000000">
<!--page break--></div>
<div id="hdr">
<div style="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="text-decoration: underline; font-style: italic; font-family: Times New Roman; font-size: 13px">
Operating Activities</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Net
cash flow from operating activities listed above is a function of
net income (loss) for the year, an add back of the net non-cash
revenue and expense items (such as SBCE, amortization expense,
deferred tax expense / (recovery) and the net change in year-end
working capital items (for example, a net decrease in working
capital in the year gives rise to a source of cash), with these
components each year as follows:</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div>
<table cellpadding="0" cellspacing="0" style="margin-right:0px;width:100%;font-size:inherit;font-family:inherit;margin-left:0px;">
<tr>
<td rowspan="1" style="vertical-align:bottom;width:64%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;padding-bottom:1px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">For
the year ended December 31</font></div>
</td>
<td rowspan="1" style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; border-bottom: 1px solid rgb(0, 0, 0); display: inline-block; font-weight: bold; font-size: 11px;">
<div><font style="font-family: Times New Roman; color: rgb(0, 0, 0); font-weight: bold;">
2019</font></div>
</font><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font></div>
</td>
<td rowspan="1" style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; border-bottom: 1px solid rgb(0, 0, 0); display: inline-block; font-weight: bold; font-size: 11px;">
<div><font style="font-family: Times New Roman; color: rgb(0, 0, 0); font-weight: bold;">
2018</font></div>
</font><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font></div>
</td>
<td rowspan="1" style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; border-bottom: 1px solid rgb(0, 0, 0); display: inline-block; font-weight: bold; font-size: 11px;">
<div><font style="font-family: Times New Roman; color: rgb(0, 0, 0); font-weight: bold;">
2017</font></div>
</font><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td style="vertical-align:bottom;width:64%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Comprehensive
income (loss) for the year</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">$&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">3,772,908</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">$&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">(6,968,511</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">)</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">$</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">(8,970,398</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">)</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td style="vertical-align:bottom;width:64%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;padding-bottom:1px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Add
back net non-cash expense and income items</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">1,777,580</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">1,782,762</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">2,676,705</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td style="vertical-align:bottom;width:64%;">
<div style="margin-left:0px;"><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">5,550,488</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">(5,185,749</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">)</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">(6,293,693</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">)</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td style="vertical-align:bottom;width:64%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;padding-bottom:1px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Change
in non-cash working capital balances</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">(1,472,061</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">)</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">(858,170</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">)</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">829,014</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td style="vertical-align:bottom;width:64%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;padding-bottom:1px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Total
cash provided by (used in) in operations</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">4,078,427</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">(6,043,919</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">)</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">(5,464,679</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">)</font></div>
</td>
</tr></table>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Operating
cash flow increased by $10,122,347 in 2019 as compared to 2018
because of payments received from the Nigerian SFD<font style="font-size: 70%; vertical-align: top">&#xAE;</font> Survey net of
payments for survey costs.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">For
2018 and 2017, changes in operating cash flow was driven by the
lack of revenue and incurred operating costs for the
period.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="text-decoration: underline; font-style: italic; font-family: Times New Roman; font-size: 13px">
Financing Activities</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px"><font style="font-weight: bold">
2019</font> &#x2013; During the fourth quarter of 2019 the Company
completed the TIB for $1,250,000 plus costs of $93,184 to
repurchase 4,166,667 TIB Common Shares, at a price of $0.30 per.
Also NXT recorded a net cash financing outflow of $42,603 in 2019
on payments for its finance leases.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px"><font style="font-weight: bold">
2018</font> &#x2013; During 2018 NXT recorded a net inflow of
$9,176,839 as a result of proceeds received from the closing of
tranches in the Private Placement.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px"><font style="font-weight: bold">
2017</font> - NXT recorded a cash inflow of $2,019,865 in 2017
related mostly from the Rights Offering.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="text-decoration: underline; font-style: italic; font-family: Times New Roman; font-size: 13px">
Investing Activities</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px"><font style="font-weight: bold">
2019</font> &#x2013; Company acquired the new transponder technology
known as ADS-B for its aircraft. Total costs for installing the
ADS-B was approximately $208,000. Short-term investments in 2019
increased as the Company invested excess funds from operations into
Guaranteed Investment Certificates.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div id="pgbrk" style="width: 100%; margin-left: 0px; text-indent: 0px; margin-right: 0px">
<div id="ftr">
<div style="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div id="pn" style="text-align: center"><font style="font-family: Times New Roman; font-size: 13px">36</font></div>
</div>
<div id="pb" style="text-align: center; page-break-after: always; margin-left: 0px; margin-right: 0px; margin-bottom: 6px; width: 100%; height: 1px; background-color: #000000">
<!--page break--></div>
<div id="hdr">
<div style="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px"><font style="font-weight: bold">
2018</font> &#x2013;Short-term investments increased as a result of
the Private Placement funds.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px"><font style="font-weight: bold">
2017</font> - The overall net cash source in investing activities
of $3,117,858 for 2017 reflects these components:</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="margin-left: 24px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">On April
28<font style="font-size: 70%; vertical-align: top">th</font>, 2017
NXT completed a sale and leaseback transaction on its&#x2019; Cessna
Citation aircraft for $3,142,260 (US$2,300,000).</font></div>
</div>
</div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="margin-left: 24px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">A use of $518,765
for deposits on the aircraft and building leases.</font></div>
</div>
</div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="margin-left: 24px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">A source of
$503,091 from a net decrease in cash invested in short-term
investments</font></div>
</div>
</div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="display: table">
<div style="display: table-row">
<div style="display: table-cell; width: 48px"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">C.&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">Research
and development, patents and licenses, etc.</font></div>
</div>
</div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Research
and development, patents and licenses for NXT primarily includes
costs related to intellectual property filings, research and
development activity related to the SFD<font style="font-size: 70%; vertical-align: top">&#xAE;</font> technology and
certain non-recurring project activities.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">For
2019, the Company's expenses related mostly to costs associated
with the validation process for certain European SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font></font></font>
patents. In 2018, these costs were negative as the Company
renegotiated fees from a provider of R&amp;D services. In 2017
these costs were the result of acquiring patents.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="display: table">
<div style="display: table-row">
<div style="display: table-cell; width: 47px"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">D.&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">Trend
information.</font></div>
</div>
</div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">We have
historically conducted a limited number of service contracts each
year, the dollar value and timing of securing and ultimate delivery
of which are subject to numerous external factors.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">As
noted previously, the amount and timing of our annual revenues can
vary widely year to year, as we derive our revenues from a limited
number of service contracts each year and each individual contract
may have a large effect on the aggregate annual revenues and
profits. For example, in 2012, we conducted our first contract with
PEMEX, the National Oil Company of Mexico. This project was
completed in 2012 and was our largest to that time, at US$5.8
million. In 2015, projects totaling US$13 million were completed in
Bolivia for YPFB, then our next survey in Nigeria during 2019 was
for US$8.9 million. At the date of this 20-F current external
trends such as in commodity prices and Covid-19 could affect our
operations for the current fiscal year. Please see Item 1 3B for a
discussion on these risks.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="display: table">
<div style="display: table-row">
<div style="display: table-cell; width: 47px"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">E.&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">Off-balance
sheet arrangements.</font></div>
</div>
</div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">The
Company has no off-balance sheet arrangements as of the date of
this MD&amp;A other than office premise non-lease operating costs
with Interloq Capital (the "Landlord"). If the Company were to
default on its office lease the current month rent including
operation costs plus the next three months become immediately due.
Operating cost amounts are disclosed under the heading
"<font style="font-style: italic">Liquidity and Capital Resources
&#x2013; Contractual Commitments</font>". NXT pays an estimated
operating cost during the current year, but has the obligation to
pay the actual operating costs incurred as defined in the office
lease with the Landlord early in the first quarter of the preceding
year if the estimate was low, or will receive a refund if the
estimate was too high. Currently, the Company believes that the
current operating cost estimate is reasonable and is constant with
discussions with the Landlord.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="display: table">
<div style="display: table-row">
<div style="display: table-cell; width: 47px"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">F.&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">Tabular
disclosure of contractual obligations.</font></div>
</div>
</div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">The
following table sets forth our outstanding contractual obligations
as at December 31, 2019:</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div>
<table cellpadding="0" cellspacing="0" style="margin-right:0px;width:100%;font-size:inherit;font-family:inherit;margin-left:0px;">
<tr>
<td rowspan="1" style="vertical-align:bottom;width:50%;">
<div style="margin-left:0px;"><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td rowspan="1" style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-weight: bold; font-size: 11px;">
<div><font style="font-family: Times New Roman; font-weight: bold;">&#xA0;</font></div>
</font><font style="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font></div>
</td>
<td rowspan="1" style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-weight: bold; font-size: 11px;">
<div><font style="font-family: Times New Roman; color: rgb(0, 0, 0); font-weight: bold;">
less than</font></div>
</font><font style="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font></div>
</td>
<td rowspan="1" style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-weight: bold; font-size: 11px;">
<div><font style="font-family: Times New Roman; color: rgb(0, 0, 0); font-weight: bold;">
1 to 3</font></div>
</font><font style="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font></div>
</td>
<td rowspan="1" style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-weight: bold; font-size: 11px;">
<div><font style="font-family: Times New Roman; color: rgb(0, 0, 0); font-weight: bold;">
3 to 5</font></div>
</font><font style="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font></div>
</td>
<td rowspan="1" style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-weight: bold; font-size: 11px;">
<div><font style="font-family: Times New Roman; color: rgb(0, 0, 0); font-weight: bold;">
more than</font></div>
</font><font style="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font></div>
</td>
</tr><tr>
<td style="vertical-align:bottom;width:50%;">
<div style="margin-left:0px;padding-bottom:1px;"><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; border-bottom: 1px solid rgb(0, 0, 0); display: inline-block; font-weight: bold; font-size: 11px;">
<div><font style="font-family: Times New Roman; color: rgb(0, 0, 0); font-weight: bold;">
Total</font></div>
</font><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; border-bottom: 1px solid rgb(0, 0, 0); display: inline-block; font-weight: bold; font-size: 11px;">
<div><font style="font-family: Times New Roman; color: rgb(0, 0, 0); font-weight: bold;">
1 year</font></div>
</font><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; border-bottom: 1px solid rgb(0, 0, 0); display: inline-block; font-weight: bold; font-size: 11px;">
<div><font style="font-family: Times New Roman; color: rgb(0, 0, 0); font-weight: bold;">
years</font></div>
</font><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; border-bottom: 1px solid rgb(0, 0, 0); display: inline-block; font-weight: bold; font-size: 11px;">
<div><font style="font-family: Times New Roman; color: rgb(0, 0, 0); font-weight: bold;">
years</font></div>
</font><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; border-bottom: 1px solid rgb(0, 0, 0); display: inline-block; font-weight: bold; font-size: 11px;">
<div><font style="font-family: Times New Roman; color: rgb(0, 0, 0); font-weight: bold;">
5 years</font></div>
</font><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td style="vertical-align:bottom;width:50%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="font-style: italic; color: #000000; font-family: Times New Roman; font-size: 13px">
Long-term debt</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">$</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">$</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">$</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">$</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">$</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td style="vertical-align:bottom;width:50%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-style: italic; font-family: Times New Roman; font-size: 13px">
Lease obligations:</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td style="vertical-align:bottom;width:50%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;Premises
rent</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">2,102,840</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">358,712</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">734,370</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">734,370</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">275,388</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td style="vertical-align:bottom;width:50%;">
<div style="text-align: left; text-indent:24px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Premises
operating costs</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">1,278,949</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">222,069</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">445,002</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">445,002</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">166,876</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td style="vertical-align:bottom;width:50%;">
<div style="text-align: left; text-indent:24px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Aircraft
Lease</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">2,031,754</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">646,204</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">1,385,550</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td style="vertical-align:bottom;width:50%;">
<div style="text-align: left; text-indent:24px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Office
equipment</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">63,210</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">52,860</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">10,350</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td style="vertical-align:bottom;width:50%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="font-style: italic; color: #000000; font-family: Times New Roman; font-size: 13px">
Purchase obligations</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td style="vertical-align:bottom;width:50%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-style: italic; font-family: Times New Roman; font-size: 13px">
Other long term liabilities:</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td style="vertical-align:bottom;width:50%;">
<div style="text-align: left; text-indent:24px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Asset
retirement obligation</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">21,481</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">21,481</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td style="vertical-align:bottom;width:50%;">
<div style="text-align: left; text-indent:24px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Total</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">5,498,234</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">1,279,845</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">2,596,753</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">1,179,372</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">442,264</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
</tr></table>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div id="pgbrk" style="width: 100%; margin-left: 0px; text-indent: 0px; margin-right: 0px">
<div id="ftr">
<div style="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div id="pn" style="text-align: center"><font style="font-family: Times New Roman; font-size: 13px">37</font></div>
</div>
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<div style="display: table-cell; width: 47px"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">G.&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">Safe
Harbor.</font></div>
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<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
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<font style="color: #000000; font-family: Times New Roman; font-size: 13px">
The Company seeks safe harbor for our forward-looking statements.
Please see the section titled &#x201C;Forward-Looking
Statements&#x201D; above.</font></div>
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<div style="display: table-cell; width: 84px"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px"><a name="_Toc449704251"><!--anchor--></a>ITEM 6.&#xA0;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">DIRECTORS,
SENIOR MANAGEMENT AND EMPLOYEES</font></div>
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</div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
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<div style="display: table-cell; width: 48px"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">A.&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">Directors
and senior management.</font></div>
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<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
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<font style="font-family: Times New Roman; font-size: 13px">Our
articles of incorporation provide for a minimum of one director and
a maximum of 15 directors comprising our Board of directors. At
present, our Board of directors consists of six
members.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Our
directors are elected by our shareholders at our annual meeting of
shareholders and hold the position either until the next annual
shareholders&#x2019; meeting, the date of their resignation or until
a successor is appointed.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">The
following sets forth information, including directorships in other
reporting issuers, as of May 5, 2020, for our directors, executive
officers and key employees:</font></div>
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</td>
</tr><tr>
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<font style="font-weight: bold; font-variant: small-caps; font-family: Times New Roman; font-size: 13px">
George Liszicasz</font></div>
<div style="text-align: left; margin-left: 0px; margin-right: -45px; text-indent: 0px">
<font style="font-weight: bold; font-variant: small-caps; font-family: Times New Roman; font-size: 13px">
Calgary, Alberta, Canada</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: left; margin-left: 48px; margin-right: 0px; text-indent: -48px">
<font style="font-family: Times New Roman; font-size: 13px">Director, Chairman
and Chief</font></div>
<div style="text-align: left; margin-left: 48px; margin-right: -45px; text-indent: -48px">
<font style="font-family: Times New Roman; font-size: 13px">Executive Officer
since January</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">1996;
President since July 2002</font></div>
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<font style="font-family: Times New Roman; font-size: 13px;">&#xA0;</font></div>
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<font style="font-family: Times New Roman; font-size: 13px">Mr.
Liszicasz is the inventor of the SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font></font></font>
Technology and has been Chairman and Chief Executive Officer since
the Corporation's inception in 1996. Mr. Liszicasz&#x2019; primary
responsibilities, as the President and CEO, are to oversee all
operations and to further develop the SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font></font></font>
technology.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">He
holds an Electronics Engineer degree from the Landler Jeno
Technitken in Hungary in 1973 and studied general sciences at the
University of British Columbia between 1979 and 1983. Mr. Liszicasz
has extensive R&amp;D body of work with various technologies, and
52 inventions.</font></div>
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<font style="font-weight: bold; font-variant: small-caps; font-family: Times New Roman; font-size: 13px">
Charles Selby</font></div>
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<font style="font-weight: bold; font-variant: small-caps; font-family: Times New Roman; font-size: 13px">
Calgary, Alberta, Canada</font></div>
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<font style="font-family: Times New Roman; font-size: 13px;">&#xA0;</font></div>
<div style="text-align: left; margin-left: 48px; margin-right: 0px; text-indent: -48px">
<font style="font-family: Times New Roman; font-size: 13px">Director
since</font></div>
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">January
2006</font></div>
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<font style="font-family: Times New Roman; font-size: 13px">Mr.
Selby holds a B. Sc. (Hons) in Chemical Engineering, a J.D. degree
and is a registered Professional Engineer in the Province of
Alberta.&#xA0; He previously practiced law for two large Canadian
law firms, specializing in securities, international transactions
in the energy business and corporate finance matters.&#xA0; Since
leaving the practice of law,&#xA0; <font style="color: #000000; background-color: #FFFFFF">&#xA0;Mr. Selby was a
Vice President of Pengrowth Corporation, the Administrator of
Pengrowth Energy Trust, for almost 20 years.&#xA0; He also</font>
has served on the board and in management of a number of reporting
issuers including Arakis Energy, which had operations in the Sudan,
and other issuers in the oil and natural gas industry.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">He is
currently the president and a director of Wildcat Royalty
Corporation and Caledonian Midstream Corporation, private entities
which are involved in oil &amp; gas production and the midstream
oil and gas business primarily in the Province of Alberta.&#xA0; He
is a director of Caledonian Global Corporation, an international
company with royalty interests Vietnam and Chairman and CEO of
Montana Exploration Corp. (formerly AltaCanada Energy Corp.) an oil
and gas company.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px;">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Mr.
Selby is the Lead Director of NXT.&#xA0; He is also Chair of NXT's
Compensation Committee and a member of the Audit, Disclosure, and
Strategic Planning Committees.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px;">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Mr.
Selby also served as the Company's Interim Chief Financial Officer
from December, 2017 to January, 2018.&#xA0;</font></div>
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<font style="font-weight: bold; font-variant: small-caps; font-family: Times New Roman; font-size: 13px">
John Tilson</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-weight: bold; font-variant: small-caps; font-family: Times New Roman; font-size: 13px">
Montecito, California, USA</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-style: italic; font-family: Times New Roman; font-size: 13px">
Director since February 2015</font></div>
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<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Mr.
Tilson is retired, and after obtaining MBA and CFA designations,
had a distinguished career as an analyst, portfolio manager,
and&#xA0;advisor in the US investment and financial industry with
such firms as Sutro &amp; Company and&#xA0;EF Hutton &amp; Company.
Mr. Tilson joined Roger Engemann and Associates in 1983 when assets
under management were roughly US$160 million. During
his&#xA0;tenure there, the Pasadena Group of Mutual Funds was
started, with Pasadena Capital Corporation formed as the holding
company for the mutual funds and investment management business.
After working as an analyst and portfolio manager, John later
became Executive Vice President &amp; Managing Director of Pasadena
Capital Corporation. Assets under management had grown to over US$5
billion by the time the firm was sold to Phoenix Companies in 1997.
Mr. Tilson later retired in 2005.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px;">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">From
2006 to 2012, Mr. Tilson was a member of the Board of Trustees,
including three years serving as VP and Chairman of the long-range
planning committee, for Lotusland, a Santa Barbara non-profit
organization established by Madame Ganna Walska.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px;">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Mr.
Tilson is the Chair of the Board&#x2019;s Strategic Planning
Committee, and a member of the Compensation, Governance and Audit
Committees.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
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<font style="font-weight: bold; font-variant: small-caps; font-family: Times New Roman; font-size: 13px">
Thomas E. Valentine</font></div>
<div style="text-align: left; margin-left: 0px; margin-right: -45px; text-indent: 0px">
<font style="font-weight: bold; font-variant: small-caps; font-family: Times New Roman; font-size: 13px">
Calgary, Alberta, Canada</font></div>
<div style="text-align: left; margin-left: 0px; margin-right: -45px; text-indent: 0px">
<font style="font-style: italic; font-family: Times New Roman; font-size: 13px">
</font></div>
<div style="text-align: left; margin-left: 0px; margin-right: -45px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px;">&#xA0;</font></div>
<div style="text-align: left; margin-left: 0px; margin-right: -45px; text-indent: 0px">
<font style="font-style: italic; font-family: Times New Roman; font-size: 13px">
Director since November 2007</font></div>
<div style="text-align: left; margin-left: 0px; margin-right: -45px; text-indent: 0px">
<font style="font-style: italic; font-family: Times New Roman; font-size: 13px">
</font></div>
<div style="text-align: left; margin-left: 0px; margin-right: -45px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px;">&#xA0;</font></div>
<div style="text-align: left; margin-left: 0px; margin-right: -45px; text-indent: 0px">
<font style="font-style: italic; font-family: Times New Roman; font-size: 13px">
Corporate Secretary since April 2014</font></div>
</td>
<td style="vertical-align: top; width: 71%">
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Mr.
Valentine is a Partner with Norton Rose Fulbright Canada LLP, where
he has practiced law, both as a Barrister and a Solicitor, since
his call to the Bar in 1987. He is a member of the firm&#x2019;s
Energy and Infrastructure Practice Group and is involved in energy
and energy related matters throughout the Middle East, North
Africa, the CIS, Asia and South America.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px;">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Mr.
Valentine is a member of the Board of Directors of Touchstone
Exploration Inc., and formerly was a director of two other Canadian
public companies, Calvalley Petroleum Inc. (to May 2015) and Veraz
Petroleum Ltd.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Mr.
Valentine holds a BA from the University of British Columbia, a LLB
from Dalhousie University, and a LL.M. from the London School of
Economics.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Mr.
Valentine is the Chair of the Governance Committee and a member of
the Compensation Committee.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px;">&#xA0;</font></div>
</td>
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<font style="font-weight: bold; font-variant: small-caps; font-family: Times New Roman; font-size: 13px">
Bruce G. Wilcox</font></div>
<div style="text-align: left; margin-left: 0px; margin-right: -45px; text-indent: 0px">
<font style="font-weight: bold; font-variant: small-caps; font-family: Times New Roman; font-size: 13px">
New York, New York, USA</font></div>
<div style="text-align: left; margin-left: 0px; margin-right: -45px; text-indent: 0px">
<font style="font-style: italic; font-family: Times New Roman; font-size: 13px">
</font></div>
<div style="text-align: left; margin-left: 0px; margin-right: -45px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px;">&#xA0;</font></div>
<div style="text-align: left; margin-left: 0px; margin-right: -45px; text-indent: 0px">
<font style="font-style: italic; font-family: Times New Roman; font-size: 13px">
Director since June 2015</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px"><br></font></div>
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<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
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<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Mr.
Wilcox has had a long career as an investment company CEO, analyst
and portfolio manager. He spent most of his career with Cumberland
Associates, LLC, a New York equity fund, from 1986 through
retirement in 2010, progressing from analyst / portfolio manager to
partner, and Chairman of the Management Committee. Mr. Wilcox
specialized in Cumberland's investments in the energy industry
(E&amp;P and service companies), with an emphasis on value and
long-term holdings. During his tenure, the fund's assets under
management ranged from US$0.7 to $1.5 billion.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px;">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">From
1984 to 1986, Mr. Wilcox was with Central National-Gottesman, Inc.
as an analyst and portfolio manager on a team responsible for a
$500 million listed equity portfolio.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px;">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Mr.
Wilcox is presently CEO of E Street Management, LLC which manages a
long/short equity fund of funds. He is also one of the managing
members of Xiling Fund III, LLC, part of a series of private equity
funds (US$100+ million) which specialize in investing in museum
quality Chinese art and collectibles.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px;">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Mr.
Wilcox obtained a BA (Honors), in Modern Chinese from the
University of California, Santa Barbara, and a Master of
International Management from the American Graduate School of
International Management in Phoenix.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px;">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Mr.
Wilcox is a member of several Boards, including the Teachers
College of Colombia University (2003 to date, including acting as
the Chair of the Investment Committee), the University of
California Santa Barbara Foundation (2003 to date, including as
former Chair of the Board, Investment and Finance Committees), and
is a Trustee (2001 to date) of the Manhattan Institute For Policy
Research, a leading urban, state, and national policy institution,
which works on matters such as energy policy.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px;">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Mr.
Wilcox is the chair of the Board's Audit Committee and a member of
the Disclosure, Governance and Strategic Planning
Committees.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
</tr><tr>
<td style="vertical-align: top; width: 29%">
<div style="text-align: left; margin-left: 0px; margin-right: -45px; text-indent: 0px">
<font style="font-weight: bold; font-variant: small-caps; font-family: Times New Roman; font-size: 13px">
Frank Ingriselli</font></div>
<div style="text-align: left; margin-left: 0px; margin-right: -45px; text-indent: 0px">
<font style="font-weight: bold; font-variant: small-caps; font-family: Times New Roman; font-size: 13px">
Danville, California, USA</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: left; margin-left: 0px; margin-right: -45px; text-indent: 0px">
<font style="font-style: italic; font-family: Times New Roman; font-size: 13px">
Director since September 2019</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td style="vertical-align: top; width: 71%">
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Mr.
Ingriselli has over 40 years of experience in the energy industry,
Mr. Ingriselli is a seasoned leader and entrepreneur with
wide-ranging energy industry experience in diverse geographies,
business climates and political environments.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Mr.
Ingriselli has over 40 years of experience in the energy industry,
Mr. Ingriselli is a seasoned leader and entrepreneur with
wide-ranging energy industry experience in diverse geographies,
business climates and political environments.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">From
1979 to 2001, Mr. Ingriselli worked at Texaco in a variety of
senior executive positions involving exploration and production,
power and gas operations, merger and acquisition activities,
pipeline operations and corporate development. &#xA0;While at
Texaco, Mr. Ingriselli held the position of President of Texaco
Technology Ventures, President and CEO of the Timan Pechora Company
(owned by affiliates of Texaco, Exxon, Amoco, Norsk Hydro and
Lukoil), and President of Texaco International Operations, where he
directed Texaco's global initiatives in exploration and
development. &#xA0;During his tenure, Mr. Ingriselli, also led
Texaco's initiatives in exploration and development in China,
Russia, Australia, India, Venezuela and many other
countries.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">From
2005 to 2018, he was the founder, President, CEO and Chairman of
PEDEVCO Corp. and Pacific Asia Petroleum, Inc., both energy
companies which are or were listed on the New York or American
stock exchanges.&#xA0; From 2016 through 2019, Mr. Ingriselli was
the founder, President and CEO of Blackhawk Energy Ventures Inc.
which endeavored to acquire oil and gas assets in the U.S. for
development purposes.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Currently
Mr. Ingriselli is the President of Indonesia Energy Corporation and
is a member of the Board of Directors of DataSight Corporation.
&#xA0;Mr. Ingriselli serves on the Board of Trustees of the Eurasia
Foundation, and is the founder and Chairman of Brightening Lives
Foundation, Inc., a US Section 501(c)(3) public charitable
foundation.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Mr.
Ingriselli graduated from Boston University with a B.S. in business
administration. He also earned an M.B.A. from New York University
in both finance and international finance and a J.D. from Fordham
University School of Law.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Mr.
Ingriselli is a member of NXT&#x2019;s audit committee.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
</tr><tr>
<td style="vertical-align: top; width: 29%">
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-weight: bold; font-variant: small-caps; font-family: Times New Roman; font-size: 13px">
Eugene Woychyshyn</font></div>
<div style="text-align: left; margin-left: 0px; margin-right: -45px; text-indent: 0px">
<font style="font-weight: bold; font-variant: small-caps; font-family: Times New Roman; font-size: 13px">
Calgary, Alberta, Canada</font></div>
<div style="text-align: left; margin-left: 0px; margin-right: -45px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px;">&#xA0;</font></div>
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-style: italic; font-family: Times New Roman; font-size: 13px">
VP Finance and CFO since December 2018</font></div>
</td>
<td style="vertical-align: top; width: 71%">
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Mr.
Woychyshyn originally served as a consultant to NXT since late
November 2017 providing controllership services. Mr. Woychyshyn
brings to NXT over 25 years of leadership experience in multiple
industries and worldwide regions including North America, Europe
and Asia. He has extensive hands-on experience and accomplishments
in mergers and acquisitions, organizational restructuring,
purchasing, treasury, financial reporting and control, compliance,
human resource management and tax planning. In almost ten years as
an expatriate with assignments in Norway, China, the U.S. and South
East Asia he developed international business
competencies.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Mr.
Woychyshyn is a Chartered Professional Accountant, CA, who holds a
Bachelor of Commerce (Hons.) from the University of Manitoba and a
Masters of Business Administration from St. Joseph&#x2019;s
University, Philadelphia PA.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Mr.
Woychyshyn is a member of the Disclosure Committee.</font></div>
</td>
</tr></table>
</div>
<div><font style="font-family: Times New Roman; font-size: 10"><br></font></div>
<div id="pgbrk" style="width: 100%; margin-left: 0px; text-indent: 0px; margin-right: 0px">
<div id="ftr">
<div style="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div id="pn" style="text-align: center"><font style="font-family: Times New Roman; font-size: 13px">39</font></div>
</div>
<div id="pb" style="text-align: center; page-break-after: always; margin-left: 0px; margin-right: 0px; margin-bottom: 6px; width: 100%; height: 1px; background-color: #000000">
<!--page break--></div>
<div id="hdr">
<div style="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div>
<div style="text-align: justify; margin-left: 0px; margin-right: 5px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">None of
the directors or executive officers is, or has been in the last ten
years, a director, chief executive officer or chief financial
officer of any company that: (i) was subject to a cease trade or
similar order or an order that denied the relevant company access
to any exemption under securities legislation for a period of more
than 30 consecutive days that was issued while the director was
acting in that capacity; (ii) was subject to such an order that was
issued after the proposed director ceased to be a director, chief
executive officer or chief financial officer and which resulted
from an event that occurred while that person was acting in such a
capacity.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 5px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">None of
the directors or executive officers is, or has been in the last ten
years, a director or executive officer of any company that, while
that person was acting in that capacity, or within a year of that
person ceasing to act in that capacity, became bankrupt, made a
proposal under any legislation relating to bankruptcy or insolvency
or was subject to or instituted any proceedings, arrangement or
compromise with creditors or had a receiver, receiver manager or
trustee appointed to hold its assets, other than as discussed
below.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 5px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Charles
Selby was previously a member of the board of directors of
Wellpoint Systems Inc. (&#x201C;Wellpoint&#x201D;, a reporting issuer
on the TSX-V), which in 2011 had a Receiver appointed by the Court
of Queen&#x2019;s Bench of the Province of Alberta on behalf of the
holders of secured debts.&#xA0; Wellpoint was subsequently wound up
following a restructuring and sale of its operating assets.&#xA0;
Charles Selby was previously a member of the board of directors of
Idaho Natural Resources Corp., which was cease-traded by the TSX
Venture Exchange in December 2012 for failing to meet listing
requirements.&#xA0; A cease trade order was issued by the Alberta
Securities Commission on May 4, 2018 against Montana Exploration
Corp. (&#x201C;MEC&#x201D;) for failing to file its annual audited
financial statements, annual management&#x2019;s discussion and
analysis and certification of annual filings within the required
time period.&#xA0; Charlies Selby is the Chief Executive Officer of
MEC.&#xA0; The TSX Venture Exchange has announced that upon
revocation of the Cease Trade Order, MEC&#x2019;s shares will remain
suspended until the company meets TSX Venture Exchange
requirements.</font></div>
</div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 5px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">None of
the directors or executive officers has, within the last ten years,
become bankrupt, made a proposal under any legislation relating to
bankruptcy or insolvency, or become subject to or instituted any
proceedings, arrangement or compromise with creditors or had a
receiver, receiver manager or trustee appointed to hold their
assets.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Messrs.
Tilson, Valentine, Ingriselli, and Wilcox are considered
"independent" within the meaning of Canadian securities
law.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="display: table">
<div style="display: table-row">
<div style="display: table-cell; width: 48px"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">B.&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">Compensation</font></div>
</div>
</div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="text-decoration: underline; font-family: Times New Roman; font-size: 13px">
Executive Compensation</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">The
following table sets out certain information regarding the annual
and long-term compensation of the Chief Executive Officer, the
Chief Financial Officer at December 31, 2019, as well as any
additional individuals for whom disclosure would have been provided
pursuant to the above criteria except that the individual was not
serving as an officer of the Company at the end of 2019. All
officers of the Company are based in the Calgary, Canada head
office and are paid in Canadian dollars.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Summary
compensation table for the year ended December 31,
2019:</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div>
<table cellpadding="0" cellspacing="0" style="margin-right:0px;width:100%;font-size:inherit;font-family:inherit;margin-left:0px;">
<tr>
<td rowspan="1" style="vertical-align:bottom;width:50%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;padding-bottom:1px;margin-left:0px;"><font style="font-weight: bold; font-size: 11px;"><font style="color: rgb(0, 0, 0); font-family: Times New Roman; font-weight: bold;">
Name &amp; Principal Position</font></font></div>
</td>
<td rowspan="1" style="vertical-align:bottom;width:10%;">
<div><font style="font-weight: bold; font-size: 11px;"><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; border-bottom: 1px solid rgb(0, 0, 0); display: inline-block; font-weight: bold;">
<div><font style="font-family: Times New Roman; font-weight: bold;"><font style="color: rgb(0, 0, 0); font-weight: bold;">Salary</font><font style="vertical-align:top;font-weight:bold;font-size:70%;color:#000000;">&#xA0;</font></font></div>
</font><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold;">&#xA0;</font></font></div>
</td>
<td rowspan="1" style="vertical-align:bottom;width:10%;">
<div><font style="font-weight: bold; font-size: 11px;"><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; border-bottom: 1px solid rgb(0, 0, 0); display: inline-block; font-weight: bold;">
<div><font style="font-family: Times New Roman; color: rgb(0, 0, 0); font-weight: bold;">
Stock Options</font></div>
</font><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold;">&#xA0;</font></font></div>
</td>
<td rowspan="1" style="vertical-align:bottom;width:10%;">
<div><font style="font-weight: bold; font-size: 11px;"><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; border-bottom: 1px solid rgb(0, 0, 0); display: inline-block; font-weight: bold;">
<div><font style="font-family: Times New Roman; font-weight: bold;"><font style="color: rgb(0, 0, 0); font-weight: bold;">&#xA0;Vacation</font>
<font style="vertical-align:top;font-weight:bold;font-size:70%;color:#000000;">(1)</font></font></div>
</font><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold;">&#xA0;</font></font></div>
</td>
<td rowspan="1" style="vertical-align:bottom;width:10%;">
<div><font style="font-weight: bold; font-size: 11px;"><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; border-bottom: 1px solid rgb(0, 0, 0); display: inline-block; font-weight: bold;">
<div><font style="font-family: Times New Roman; font-weight: bold;"><font style="color: rgb(0, 0, 0); font-weight: bold;">Other</font> <font style="vertical-align:top;font-weight:bold;font-size:70%;color:#000000;">(2)</font></font></div>
</font><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold;">&#xA0;</font></font></div>
</td>
<td rowspan="1" style="vertical-align:bottom;width:10%;">
<div><font style="font-weight: bold; font-size: 11px;"><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; border-bottom: 1px solid rgb(0, 0, 0); display: inline-block; font-weight: bold;">
<div><font style="font-family: Times New Roman; color: rgb(0, 0, 0); font-weight: bold;">
&#xA0;Total</font></div>
</font><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold;">&#xA0;</font></font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td style="vertical-align:bottom;width:50%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="font-family: Times New Roman; font-size: 13px"><font style="color: #000000">George Liszicasz, President &amp; CEO</font>
<font style="font-weight: bold; font-size: 70%; vertical-align: top; color: #000000">
(4)</font></font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">$</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">274,800</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">$</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">$</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">$</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">11,145</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">$</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">285,945</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td style="vertical-align:bottom;width:50%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="font-family: Times New Roman; font-size: 13px"><font style="color: #000000">Eugene Woychyshyn, VP of Finance &amp; Chief
Financial Officer</font><font style="font-size: 70%; vertical-align: top; color: #000000">(6)</font></font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">$</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">174,167</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">$</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">$</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">$</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">1,227</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:10%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">$</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">175,394</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
</tr></table>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div>
<table cellpadding="0" cellspacing="0" style="width: 100%; font-family: Times New Roman; font-size: 13px">
<tr>
<td style="vertical-align: top; width: 100%">
<div style="text-align: left; margin-left: 36px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">(1)
&#x201C;Vacation&#x201D; represents a cash payout in the year of a
portion of unused vacation entitlements carried
forward.</font></div>
<div style="text-align: justify; margin-left: 36px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">(2)
&#x201C;Other&#x201D; consists of any vehicle allowance paid ($9,000
for Mr. Liszicasz) plus the taxable portion of company paid amounts
for group health benefits and parking.</font></div>
<div style="text-align: justify; margin-left: 36px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">(3)
Salary and other totals exclude the cash portion of fees earned as
Board Members, $35,000 for Mr. Liszicasz.</font></div>
<div style="text-align: justify; margin-left: 36px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">(4) Mr.
Eugene Woychyshyn became the Corporate Controller as of November 1,
2018, the Interim Chief Financial Officer from December 1, 2018 and
then the VP-Finance, Chief Financial Officer as of August 1,
2019.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
</tr></table>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">(See
Item 6.E &#x201C;Share Ownership&#x201D; for details regarding stock
options granted to officers).</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">No
amount is set aside or accrued by the Company or its subsidiaries
to provide pension, retirement or similar benefits to officers or
directors.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="text-decoration: underline; font-family: Times New Roman; font-size: 13px">
Director Compensation</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">NXT
compensates directors for serving on our Board by paying a
combination of an annual cash retainer as well granting stock
options to purchase NXT common shares. New members who join the
Board receive a separate grant of stock options (with entitlement
to exercise vesting over a 3 year period) in the year of joining
the Board. There were was one new Board member in 2019 and no
options were granted to Board members.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div id="pgbrk" style="width: 100%; margin-left: 0px; text-indent: 0px; margin-right: 0px">
<div id="ftr">
<div style="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div id="pn" style="text-align: center"><font style="font-family: Times New Roman; font-size: 13px">40</font></div>
</div>
<div id="pb" style="text-align: center; page-break-after: always; margin-left: 0px; margin-right: 0px; margin-bottom: 6px; width: 100%; height: 1px; background-color: #000000">
<!--page break--></div>
<div id="hdr">
<div style="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">In
2019, the directors each individually elected to receive cash as
payment of Board fees earned for the year. The annual cash retainer
was based on $30,000 ($35,000 in the case of each of the Chairman
of the Board and the Audit Committee.) Compensation payable
(including pro-rated amounts for periods of partial service in the
year) for 2019 is summarized as follows:</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div>
<table cellpadding="0" cellspacing="0" style="margin-right:0px;width:100%;font-size:inherit;font-family:inherit;margin-left:0px;">
<tr>
<td rowspan="1" style="vertical-align:bottom;width:88%;">
<div style="margin-left:0px;padding-bottom:1px;"><font style="font-family: Times New Roman; font-size: 11px;">&#xA0;</font></div>
</td>
<td rowspan="1" style="vertical-align:bottom;width:12%;">
<div><font style="font-size: 11px"><font style="text-align: left; padding-bottom:1px;width:10%;vertical-align:bottom;display:inline-block;">&#xA0;</font><font style="text-align: center; vertical-align:bottom;width:80%;border-bottom:solid 1px #000000;display:inline-block;">
<div><font style="font-family: Times New Roman;"><font style="color:#000000;">&#xA0;</font><font style="color:#000000;font-weight:bold;">2019</font></font></div>
</font><font style="text-align: left; padding-bottom:1px;width:10%;vertical-align:bottom;display:inline-block;">&#xA0;</font></font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td style="vertical-align:bottom;width:88%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">George
Liszicasz</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">$</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">35,000</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td style="vertical-align:bottom;width:88%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Charles
Selby</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">30,000</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td style="vertical-align:bottom;width:88%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Bruce
G. Wilcox</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">35,000</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td style="vertical-align:bottom;width:88%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Tom
Valentine</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">30,000</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td style="vertical-align:bottom;width:88%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">John
Tilson</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">30,000</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td style="vertical-align:bottom;width:88%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Frank
Ingriselli</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">9,750</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
</tr></table>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">The
amount and terms of any stock options granted as compensation for
Board member services is determined by the Board. We do not provide
additional compensation for committee participation (other than as
noted previously re the minor additional amount for service as the
Chairman of the Board and of the Audit Committee) or for special
assignments of the Board. (See Item 6.E &#x201C;Share
ownership&#x201D; for details regarding stock options granted to
directors.)</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">The
Company reimburses directors for out-of-pocket expenses for
attending Board and committee meetings. We do not provide
termination benefits for directors.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="display: table">
<div style="display: table-row">
<div style="display: table-cell; width: 48px"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">C.&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">Board
practices.</font></div>
</div>
</div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="text-decoration: underline; font-family: Times New Roman; font-size: 13px">
Expiration Dates</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">No
director or member of our administrative, or supervisory bodies has
an expiration date for their current term of office. Directors are
elected by shareholders at the annual meeting of shareholders and
hold the position either until the next annual shareholders&#x2019;
meeting or until a successor is appointed. The period during which
each individual has served as a director is set out in the table
under Item 6.A &#x2013; &#x201C;Directors and senior
management&#x201D;.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="text-decoration: underline; font-family: Times New Roman; font-size: 13px">
Service Contracts</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">No
directors (other than an employment contract for the CEO, Mr.
Liszicasz) have service contracts with the Company or any of its
subsidiaries that provide benefits upon termination of
employment.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="text-decoration: underline; font-family: Times New Roman; font-size: 13px">
Board of Directors Mandate</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">The
principal role of the Board is stewardship of the Company through
the creation of shareholder value, including the protection and
enhancement of the value of its assets, as the fundamental
objective. The stewardship responsibility means that the Board
oversees the general operation of the business and management,
which is responsible for the day-to-day conduct of the business.
The Board must assess and ensure systems are in place to manage the
risks of the Company&#x2019;s business with the objective of
preserving the Company&#x2019;s assets. The Board, through the CEO,
sets the attitude and disposition of the Company towards compliance
with applicable laws, environmental, safety and health policies,
financial practices and reporting. In addition to its primary
accountability to shareholders, the Board is also accountable to
employees, government authorities, other stakeholders and the
public. The Mandate of the Board of directors is posted on the
Company website and may viewed at www.nxtenergy.com or you may
request a copy be mailed to you by writing to our offices at Suite
302, 3320 - 17th Avenue SW Calgary, Alberta, Canada, T3E
0B4.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="text-decoration: underline; font-weight: bold; font-family: Times New Roman; font-size: 13px">
Board Committees</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 48px; margin-right: 0px; text-indent: -48px">
<font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">CORPORATE
GOVERNANCE COMMITTEE</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">The
Company and the Board recognize the importance of corporate
governance to the effective management of the Company and to its
shareholders. The Company&#x2019;s approach to significant issues of
corporate governance is designed with a view to ensuring that the
business and affairs of the Company are effectively managed so as
to enhance shareholder value. The Mandate of the Corporate
Governance Committee is posted on the Company website and may be
viewed at www.nxtenergy.com or you may request a copy be mailed to
you by writing to our offices at Suite 302, 3320 - 17th Avenue SW
Calgary, Alberta, Canada, T3E 0B4.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">The
Board and management endorse the need to establish forward-looking
governance policies and to continuously evaluate and modify them to
ensure their effectiveness.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
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<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="text-decoration: underline; font-family: Times New Roman; font-size: 13px">
Composition of the Corporate Governance Committee</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Messrs.
Valentine (Chair), Wilcox and Tilson are the current members of the
Corporate Governance Committee. All members of the Corporate
Governance Committee are independent within the meaning of Canadian
National Instrument 58-101.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 48px; margin-right: 0px; text-indent: -48px">
<font style="text-decoration: underline; font-family: Times New Roman; font-size: 13px">
Responsibilities of the Corporate Governance Committee</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">The
Corporate Governance Committee&#x2019;s duties, as outlined in its
charter, are to deal with the Company&#x2019;s approach to corporate
governance and the promotion of compliance with industry and
regulatory standards. The committee is responsible for overseeing
and assessing the functioning of the Board and the committees of
the Board and for the development, recommendation to the Board,
implementation and assessment of effective corporate governance
principles and guidelines. The Committee&#x2019;s responsibilities
also include identifying new candidates for director and
recommending that the Board select qualified director candidates
for election at the next annual meeting of
shareholders.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px"><br></font></div>
<div style="text-align: justify; margin-left: 48px; margin-right: 0px; text-indent: -48px">
<font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">DISCLOSURE
COMMITTEE</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 48px; margin-right: 0px; text-indent: -48px">
<font style="text-decoration: underline; color: #000000; font-family: Times New Roman; font-size: 13px">
Composition of the Disclosure Committee</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">The
Disclosure Committee currently consists of Mr. Selby, Mr. Wilcox
(Chair) and Mr. Woychyshyn (the Corporate Controller and Interim
CFO of the Company).</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 48px; margin-right: 0px; text-indent: -48px">
<font style="font-family: Times New Roman; font-size: 13px"><font style="text-decoration: underline">Responsibilities of the</font>
<font style="text-decoration: underline; color: #000000">Disclosure</font>
<font style="text-decoration: underline">Committee</font></font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">The
Disclosure Committee&#x2019;s duties are to ensure that the Company
provides timely, accurate and balanced disclosure of all material
information about the Company and to provide fair and equal access
to such information. All news releases, including but not limited
to releases of material information, are managed by the Disclosure
Committee. If the information has been determined by the Disclosure
Committee to be material, news releases will be prepared, reviewed
and then disseminated through a news-wire service that provides
simultaneous service to widespread news services and financial
media. Additionally, the Disclosure Committee is responsible for
ensuring public disclosure through filing these news releases on
SEDAR, EDGAR, and our website.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 48px; margin-right: 0px; text-indent: -48px">
<font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">STRATEGIC
PLANNING COMMITTEE</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">
Composition of the Strategic Planning Committee</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Messrs.
Tilson (Chair), Wilcox and Selby are the current members of the
Strategic Planning Committee. Messrs. Tilson (Chair) and Wilcox are
independent.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px"><font style="font-weight: bold">
Responsibilities of the Strategic Planning
Committee</font></font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">The
Strategic Planning Committee's duties are to set out the long-term
goals of the Company and to take an active role in the development
and execution of plans to achieve those goals. The Committee
participates in establishing priority areas of Company business,
assessment of strategic initiatives from Company senior executives
with regard to development and implementation control of the
Company Strategy and business area specific strategies of the
Company. The Committee also makes recommendations regarding the
overall organization and management structure including areas where
management needs to be strengthened, reviewing the organizational
job descriptions, requirements and also procedures for coordination
of organizational management and board resources. The Committee is
actively involved in the Company&#x2019;s strategic planning process
and reviews all materials relating to the strategic plan with
management. The Board is responsible for reviewing and approving
the strategic plan. At least one board meeting each year is
centered on discussing and considering the strategic plan, which
takes into account the risks and opportunities of the business.
Management must seek the Board&#x2019;s approval for any transaction
that would have a significant impact on the strategic
plan.</font></div>
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</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
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<font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">AUDIT
COMMITTEE</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 48px; margin-right: 0px; text-indent: -48px">
<font style="text-decoration: underline; color: #000000; font-family: Times New Roman; font-size: 13px">
Composition of the Audit Committee</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">The
Audit Committee consists of Messrs. Wilcox (Chair), Selby,
Ingriselli, and Tilson. Messrs. Wilcox (Chair), Ingriselli, and
Tilson are independent and each member is financially literate. The
Company&#x2019;s Audit Committee Charter is posted on our website
and may be viewed at www.nxtenergy.com or you may request a copy be
mailed to you by writing to our offices at Suite 302, 3320 &#x2013;
17<font style="font-size: 70%; vertical-align: top">th</font>
Avenue SW, Calgary, Alberta, Canada, T3E 0B4.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">
Bruce G. Wilcox</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Mr.
Wilcox holds a Master of International Management from the American
Graduate School of International Management in Phoenix. His career
as an investment company CEO, analyst and portfolio manager was
spent primarily with Cumberland Associates, LLC, and a New York
equity fund, where he was a partner, and served as Chairman of the
Managing Committee. He has previously served as audit committee
chair of a publicly traded company.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">
Charles Selby</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Mr.
Selby is both a <font style="color: #000000">lawyer</font> and
Professional Engineer, with past legal experience specializing in
securities and corporate finance matters.&#xA0; He has served on
the board or in senior management roles with a number of private
firms as well as reporting issuers in the oil and natural gas
industry.&#xA0;</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Mr.
Selby has previously served on the audit committees of Alta Canada
Energy Corp. and served as the audit committee chairman for Idaho
Natural Resources Corp. (formerly Bridge Resources
Corp.).</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">
John Tilson</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Mr.
Tilson is retired, and after <font style="color: #000000">obtaining
MBA and CFA designations, had a distinguished career as an analyst,
portfolio manager, and&#xA0;advisor in the US investment and
financial industry with such firms as Sutro &amp; Company
and&#xA0;EF Hutton &amp; Company.</font></font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">All
members of the Audit Committee have the educational background and
experience that provides them with the knowledge and ability to
understand accounting policies and related financial reporting and
disclosure issues, in order to fulfill their duties and
responsibilities as an Audit Committee member.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">
Frank Ingriselli</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Mr.
Ingriselli graduated from Boston University with a B.S. in business
administration. He also earned an M.B.A. from New York University
in both finance and international finance and a J.D. from Fordham
University School of Law.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">All
members of the Audit Committee have the educational background and
experience that provides them with the knowledge and ability to
understand accounting policies and related financial reporting and
disclosure issues, in order to fulfill their duties and
responsibilities as an Audit Committee member.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px"><font style="text-decoration: underline; color: #000000">
Audit Committee Oversight</font> <font style="color: #000000">-</font> The Company&#x2019;s Board has adopted all
recommendations by the Audit Committee with respect to the
nomination and compensation of the external auditor.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
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<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px"><font style="text-decoration: underline; color: #000000">
Pre-Approval Policies and Procedures</font> <font style="color: #000000">-</font> <font style="color: #000000">The Audit
Committee has adopted a formal policy requiring the pre-approval of
all audit and non-audit related services to be provided by
the</font> Company&#x2019;s <font style="color: #000000">principal
auditor prior to the commencement of the engagement, subject to the
following:</font></font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="margin-left: 24px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">the Audit Committee
will review annually a list of audit, audit related, recurring tax
and other non-audit services and recommend pre-approval of those
services for the upcoming year. Any additional requests will be
addressed on a case-by-case specific engagement basis;</font></div>
</div>
</div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="margin-left: 24px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-style: italic; font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">for engagements not
on the pre-approved list, the Audit Committee has delegated to the
Chair of the Committee the authority to pre-approve individual
non-audit service engagements with expected costs of up to $50,000
(annual aggregate total) subject to reporting to the Audit
Committee, at its next scheduled meeting; and</font></div>
</div>
</div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="margin-left: 24px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">for engagements not
on the pre-approved list and with expected costs greater than
$50,000 (annual aggregate total), the entire Audit Committee must
approve this service, generally at its next scheduled
meeting.</font></div>
</div>
</div>
<div><font style="font-family: Times New Roman; font-size: 10"><br></font></div>
<div style="text-align: justify; margin-left: 48px; margin-right: 0px; text-indent: -48px">
<font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">COMPENSATION
COMMITTEE</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 48px; margin-right: 0px; text-indent: -48px">
<font style="font-family: Times New Roman; font-size: 13px"><font style="text-decoration: underline; color: #000000">Composition of
the</font> <font style="text-decoration: underline">Compensation</font> <font style="text-decoration: underline; color: #000000">Committee</font></font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Messrs.
Selby (Chair), and Tilson and Valentine are members of the
Compensation Committee. Messrs. Tilson and Valentine are
independent. The charter or mandate of the Compensation Committee
is posted on the Company website and may viewed at
www.nxtenergy.com or you may request a copy be mailed to you by
writing to our offices at 302, 3320 &#x2013; 17<font style="font-size: 70%; vertical-align: top">th</font> Avenue SW, Calgary,
Alberta, Canada, T3E 0B4.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 48px; margin-right: 0px; text-indent: -48px">
<font style="font-family: Times New Roman; font-size: 13px"><font style="text-decoration: underline">Responsibilities of</font>
<font style="text-decoration: underline; color: #000000">the</font>
<font style="text-decoration: underline">Compensation</font><font style="text-decoration: underline; color: #000000">&#xA0;</font><font style="text-decoration: underline">Committee</font></font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">The
Compensation Committee's duties, as outlined in its charter, are to
deal with the assessment of management and succession to key
positions and compensation within the Company. The Compensation
Committee shall assist the Board in discharging the Board&#x2019;s
oversight responsibilities relating to the compensation and
retention of key senior management employees, and in particular the
CEO, with the skills and expertise needed to enable the Company to
achieve its goals and strategies at fair and competitive
compensation and appropriate performance incentives. In discharging
its responsibilities, the Compensation Committee will report and
where appropriate, make recommendations to the Board in respect of
the matters identified in the charter.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="display: table">
<div style="display: table-row">
<div style="display: table-cell; width: 48px"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">D.&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">Employees</font></div>
</div>
</div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="text-decoration: underline; font-family: Times New Roman; font-size: 13px">
Fiscal year ended December 31, 2019</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">As of
the fiscal year ended December 31, 2019, we had a total of 10
employees. NXT has no employees that are members of a labor union.
The following summarizes the number of employees and independent
contractors by main job function as at December 31,
2019<font style="font-weight: bold">:</font></font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div>
<table cellpadding="0" cellspacing="0" style="margin-right:0px;width:100%;font-size:inherit;font-family:inherit;margin-left:0px;">
<tr>
<td rowspan="1" style="vertical-align:bottom;width:64%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;padding-bottom:1px;margin-left:0px;"><font style="font-size: 11px"><font style="font-weight: bold; color: #000000; font-family: Times New Roman; font-size: 13px">
Function</font></font></div>
</td>
<td rowspan="1" style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; border-bottom: 1px solid rgb(0, 0, 0); display: inline-block; font-weight: bold; font-size: 11px;">
<div><font style="font-family: Times New Roman; color: rgb(0, 0, 0); font-weight: bold;">
employees</font></div>
</font><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font></div>
</td>
<td rowspan="1" style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; border-bottom: 1px solid rgb(0, 0, 0); display: inline-block; font-weight: bold; font-size: 11px;">
<div><font style="font-family: Times New Roman; color: rgb(0, 0, 0); font-weight: bold;">
contractors</font></div>
</font><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font></div>
</td>
<td rowspan="1" style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; border-bottom: 1px solid rgb(0, 0, 0); display: inline-block; font-weight: bold; font-size: 11px;">
<div><font style="font-family: Times New Roman; color: rgb(0, 0, 0); font-weight: bold;">
total</font></div>
</font><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td style="vertical-align:bottom;width:64%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Senior
management team</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: center; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">2</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: center; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: center; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">2</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td style="vertical-align:bottom;width:64%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Finance,
administration and sales</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: center; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">2</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: center; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: center; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">2</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td style="vertical-align:bottom;width:64%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;padding-bottom:1px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Operations
and technical development</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: center; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">6</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: center; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: center; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">6</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td style="vertical-align:bottom;width:64%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;padding-bottom:1px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Total</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: center; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">10</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: center; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: center; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">10</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
</tr></table>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">All of
the above noted staff are based in Calgary, Canada. The 6
operations and technical development staff includes one research
scientist holding a Ph.D. and 3 geoscientists. We periodically
engage other technical and administrative contract personnel as
required on a project basis.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div id="pgbrk" style="width: 100%; margin-left: 0px; text-indent: 0px; margin-right: 0px">
<div id="ftr">
<div style="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div id="pn" style="text-align: center"><font style="font-family: Times New Roman; font-size: 13px">44</font></div>
</div>
<div id="pb" style="text-align: center; page-break-after: always; margin-left: 0px; margin-right: 0px; margin-bottom: 6px; width: 100%; height: 1px; background-color: #000000">
<!--page break--></div>
<div id="hdr">
<div style="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="text-decoration: underline; font-family: Times New Roman; font-size: 13px">
Fiscal year ended December 31, 2018</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">As at
December 31, 2018, we had a staff of 11, all based in Calgary, as
follows:</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div>
<table cellpadding="0" cellspacing="0" style="margin-right:0px;width:100%;font-size:inherit;font-family:inherit;margin-left:0px;">
<tr>
<td rowspan="1" style="vertical-align:bottom;width:64%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;padding-bottom:1px;margin-left:0px;"><font style="font-weight: bold; font-size: 11px;"><font style="color: rgb(0, 0, 0); font-family: Times New Roman;">Function</font></font></div>
</td>
<td rowspan="1" style="vertical-align:bottom;width:12%;">
<div><font style="font-size: 11px"><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; border-bottom: 1px solid rgb(0, 0, 0); display: inline-block; font-weight: bold;">
<div><font style="font-family: Times New Roman; color: rgb(0, 0, 0); font-weight: bold;">
employees</font></div>
</font><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold;">&#xA0;</font></font></div>
</td>
<td rowspan="1" style="vertical-align:bottom;width:12%;">
<div><font style="font-size: 11px"><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; border-bottom: 1px solid rgb(0, 0, 0); display: inline-block; font-weight: bold;">
<div><font style="font-family: Times New Roman; color: rgb(0, 0, 0); font-weight: bold;">
contractors</font></div>
</font><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold;">&#xA0;</font></font></div>
</td>
<td rowspan="1" style="vertical-align:bottom;width:12%;">
<div><font style="font-size: 11px"><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; border-bottom: 1px solid rgb(0, 0, 0); display: inline-block; font-weight: bold;">
<div><font style="font-family: Times New Roman; color: rgb(0, 0, 0); font-weight: bold;">
total</font></div>
</font><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold;">&#xA0;</font></font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td style="vertical-align:bottom;width:64%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Senior
management team</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: center; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">2</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: center; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: center; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">2</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td style="vertical-align:bottom;width:64%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Finance,
administration and sales</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: center; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">3</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: center; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: center; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">3</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td style="vertical-align:bottom;width:64%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;padding-bottom:1px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Operations
and technical development</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: center; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">6</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: center; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: center; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">6</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td style="vertical-align:bottom;width:64%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;padding-bottom:1px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Total</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: center; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">11</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: center; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: center; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">11</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
</tr></table>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">All of
the above noted staff are based in Calgary, Canada. The 6
operations and technical development staff included one research
scientist holding a Ph.D. and 3 geoscientists.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="display: table">
<div style="display: table-row">
<div style="display: table-cell; width: 48px"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">E.&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">Share
ownership.</font></div>
</div>
</div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Information
on the ownership of our common shares is given under Item 7, Major
Shareholders and Related Party Transactions.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">
Summary of Stock Options, Restricted Share Units and Stock
Appreciation Rights Granted To Executive Officers and
Directors</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">All
stock options have been granted pursuant to the Stock Option Plan
(the &#x201C;Plan&#x201D;) of the Company or predecessor plans with
substantially the same terms. The Plan is approved and ratified by
shareholders every three years at the Company&#x2019;s annual
general meeting (&#x201C;AGM&#x201D;). The Plan, as was re-approved
and ratified at the Company&#x2019;s AGM held on June 25, 2019.
Pursuant to this Plan, all stock option grants must be approved by
the Board of directors of the Company. Stock options <font style="color: #000000">may be granted to the directors, officers and
employees of NXT and to consultants retained by the Company. The
aggregate number of common shares reserved for issuance under this
Plan, and any other plan of the Corporation, shall not, at the time
of the stock option grant, exceed ten percent of the total number
of issued and outstanding shares (calculated on a non-diluted
basis) unless the Company receives the permission of the stock
exchange or exchanges on which the shares are then listed to exceed
such threshold. No stock option shall be exercisable for a period
exceeding five (5) years from the date the stock option is granted
unless the Company receives the permission of the stock exchange or
exchanges on which the shares are then listed and as specifically
provided by the Board and as permitted under the rules of any stock
exchange or exchanges on which the shares are then listed, and in
any event, no stock option shall be exercisable for a period
exceeding ten (10) years from the date the option is
granted.</font></font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="color: #000000; font-family: Times New Roman; font-size: 13px">
Stock options are generally issued with a three year vesting period
wherein entitlement to exercise one third of the options granted
shall vest at the end of each of the first three years following
the grant date. The exercise price for an option grant is set at
the last trade price on the date preceding the grant or some higher
price at the discretion of the Board.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px"><font style="color: #000000">
The Restricted Share Unit Plan (the&#x201D;RSU&#x201D;) was approved
and ratified by the shareholders at the Company&#x2019;s annual
meeting on June 21, 2017.</font> Pursuant to the RSU, all grants
must be approved by the Board of directors of the Company.
RSU&#x2019;s <font style="color: #000000">may be granted to the
directors, officers and employees of NXT and to consultants
retained by the Company. The aggregate number of common shares
reserved for issuance under this Plan, and any other plan of the
Corporation, shall not, at the time of the RSU grant, exceed ten
percent of the total number of issued and outstanding shares
(calculated on a non-diluted basis).</font></font></div>
<div id="pgbrk" style="width: 100%; margin-left: 0px; text-indent: 0px; margin-right: 0px">
<div id="ftr">
<div style="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div id="pn" style="text-align: center"><font style="font-family: Times New Roman; font-size: 13px">45</font></div>
</div>
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<!--page break--></div>
<div id="hdr">
<div style="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="color: #000000; font-family: Times New Roman; font-size: 13px">
The RSU&#x2019;s are generally issued with a three year vesting
where they shall vest at the end of each of the first three years
following the grant date. The price is determined on the vesting
date.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="color: #000000; font-family: Times New Roman; font-size: 13px">
The Deferred Share Unit Plan (the &#x201D;DSU Plan&#x201D;) was
approved and ratified by the shareholders at the Company&#x2019;s
annual meeting on June 25, 2019. The DSU Plan is a long-term
incentive plan that permits the grant of deferred share units
("DSUs") to qualified directors, as determined by the Board in its
absolute discretion (collectively, the "Designated Participants").
Designated Participants are required to elect (in respect of each
calendar year) the amount of the aggregate annual retainer or fee
to be received in the form of DSUs, cash, Common Shares purchased
on the secondary market, or a combination thereof, subject to
requirements imposed by the Board to receive a
specified</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">minimum
value of his or her annual retainer or fee in the form of DSUs.
DSUs granted under the DSU Plan are to be settled at the election
of the Board in cash, Common Shares issued from treasury (subject
to Shareholder approval of unallocated entitlements thereunder
every three years thereafter), or, at the election of the Board, or
a combination of cash and Common Shares.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">The
following stock options and DSUs were granted to NXT&#x2019;s
executive officers and directors in the three prior fiscal years
ended December 31, 2019, 2018 and 2017 and to date to May 5, 2020.
No RSUs have been granted to date.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="text-decoration: underline; font-family: Times New Roman; font-size: 13px">
In 2019 and to date in 2020:</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="margin-left: 24px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">A total of 16,573
DSUs were granted on March 31, 2020 to a director of the
Company.</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="text-decoration: underline; font-family: Times New Roman; font-size: 13px">
In 2018:</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="margin-left: 24px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">A total of
1,000,000 stock options with an exercise price of $1.13 per common
share were granted in February 2018 to the new Chief Financial
Officer. These options were forfeited on December 30,
2018.</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="margin-left: 24px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">A total of 150,000
stock options with an exercise price of $0.59 per common share were
granted in November 2018 to the new Corporate
Controller.</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px"><font style="text-decoration: underline">
In 2017</font>:</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px;">&#xA0;</font></div>
<div style="margin-left: 24px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">No options were
granted in 2017.</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">The
following table sets forth information regarding outstanding stock
options which have been granted to our directors and officers as of
May 5, 2020. All options are issued at an exercise price
<font style="color: #000000">set at the closing trade price on the
trading date prior to the grant.</font> Each option entitles the
option holder to acquire one common share of the
Company.</font></div>
<div id="pgbrk" style="width: 100%; margin-left: 0px; text-indent: 0px; margin-right: 0px">
<div id="ftr">
<div style="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div id="pn" style="text-align: center"><font style="font-family: Times New Roman; font-size: 13px">46</font></div>
</div>
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<!--page break--></div>
<div id="hdr">
<div style="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px"><font style="font-weight: bold">
Issued and outstanding stock options held by directors and officers
of the Company</font> (as of May 5, 2020)</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px;">&#xA0;</font></div>
<div style="text-align: left">
<table cellpadding="0" cellspacing="0" style="text-align: left; margin: 0px auto 0px 0px; width: 100%; font-size: inherit; font-family: inherit;">
<tr>
<td colspan="1" rowspan="1" style="vertical-align: bottom; width: 40%;">
<div style="padding-bottom: 1px;"><font style="font-size: 11px"><font style="font-weight: bold">Name and
Position</font><br></font></div>
</td>
<td rowspan="1" style="vertical-align:bottom;width:12%;">
<div><font style="font-size: 11px"><font style="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; padding-bottom: 1px;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; display: inline-block; border-bottom: 1px solid rgb(0, 0, 0);">
<div><font style="font-family: Times New Roman; color: rgb(0, 0, 0);">&#xA0;</font></div>
<div><font style="font-weight: bold; font-family: Times New Roman; color: rgb(0, 0, 0);">
Exercise</font></div>
<div><font style="font-weight: bold; font-family: Times New Roman; color: rgb(0, 0, 0);">
&#xA0;Price</font></div>
</font><font style="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; padding-bottom: 1px;">&#xA0;</font></font></div>
</td>
<td rowspan="1" style="vertical-align: bottom; width: 12%;">
<div><font style="text-align: left; display: inline-block; vertical-align: bottom; width: 10%; padding-bottom: 1px; font-size: 11px;">&#xA0;</font><font style="text-align: center; display: inline-block; vertical-align: bottom; width: 80%; border-bottom: 1px solid rgb(0, 0, 0); font-size: 11px;">
<div style="text-align: center; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="font-weight: bold; color: rgb(0, 0, 0); font-family: Times New Roman;">
Option</font></div>
<div style="text-align: center; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="font-weight: bold; color: rgb(0, 0, 0); font-family: Times New Roman;">
Grant</font></div>
<div style="text-align: center; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="font-weight: bold; color: rgb(0, 0, 0); font-family: Times New Roman;">
Date</font></div>
</font><font style="text-align: left; display: inline-block; vertical-align: bottom; width: 10%; padding-bottom: 1px; font-size: 11px;">&#xA0;</font></div>
</td>
<td rowspan="1" style="vertical-align: bottom; width: 12%;">
<div><font style="text-align: left; display: inline-block; vertical-align: bottom; width: 10%; padding-bottom: 1px; font-size: 11px;">&#xA0;</font><font style="text-align: center; display: inline-block; vertical-align: bottom; width: 80%; border-bottom: 1px solid rgb(0, 0, 0); font-size: 11px;">
<div style="text-align: center; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="font-weight: bold; color: rgb(0, 0, 0); font-family: Times New Roman;">
Option</font></div>
<div style="text-align: center; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="font-weight: bold; color: rgb(0, 0, 0); font-family: Times New Roman;">
Expiry</font></div>
<div style="text-align: center; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="font-weight: bold; color: rgb(0, 0, 0); font-family: Times New Roman;">
&#xA0;Date</font></div>
</font><font style="text-align: left; display: inline-block; vertical-align: bottom; width: 10%; padding-bottom: 1px; font-size: 11px;">&#xA0;</font></div>
</td>
<td rowspan="1" style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; padding-bottom: 1px; font-size: 11px;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; display: inline-block; border-bottom: 1px solid rgb(0, 0, 0); font-size: 11px;">
<div><font style="font-weight: bold; font-family: Times New Roman; color: rgb(0, 0, 0);">
# of</font></div>
<div><font style="font-weight: bold; font-family: Times New Roman; color: rgb(0, 0, 0);">
options</font></div>
<div><font style="font-weight: bold; font-family: Times New Roman; color: rgb(0, 0, 0);">
held</font></div>
</font><font style="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; padding-bottom: 1px; font-size: 11px;">&#xA0;</font></div>
</td>
<td rowspan="1" style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; padding-bottom: 1px; font-size: 11px;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; display: inline-block; border-bottom: 1px solid rgb(0, 0, 0); font-size: 11px;">
<div><font style="font-weight: bold; font-family: Times New Roman; color: rgb(0, 0, 0);">
% of total</font></div>
<div><font style="font-weight: bold; font-family: Times New Roman; color: rgb(0, 0, 0);">
outstanding</font></div>
<div><font style="font-family: Times New Roman;"><font style="color: rgb(0, 0, 0);">&#xA0;</font> <font style="color:#000000;font-weight:bold;">options</font></font></div>
</font><font style="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; padding-bottom: 1px; font-size: 11px;">&#xA0;</font></div>
</td>
</tr><tr>
<td colspan="1" style="vertical-align: bottom; width: 40%;">
<div style="margin-left:0px;"><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;display:inline-block;">&#xA0;</font><font style="text-align: center; vertical-align:bottom;width:80%;display:inline-block;">
<div><font style="font-size:13px;font-family:Times New Roman;">&#xA0;</font></div>
</font><font style="text-align: left; vertical-align:bottom;width:10%;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align: bottom; width: 12%;">
<div style="margin-left:0px;"><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td style="vertical-align: bottom; width: 12%;">
<div style="margin-left:0px;"><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;display:inline-block;">&#xA0;</font><font style="text-align: center; vertical-align:bottom;width:80%;display:inline-block;">
<div><font style="font-size:13px;font-family:Times New Roman;">&#xA0;</font></div>
</font><font style="text-align: left; vertical-align:bottom;width:10%;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;display:inline-block;">&#xA0;</font><font style="text-align: center; vertical-align:bottom;width:80%;display:inline-block;">
<div><font style="font-size:13px;font-family:Times New Roman;">&#xA0;</font></div>
</font><font style="text-align: left; vertical-align:bottom;width:10%;display:inline-block;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td colspan="1" style="vertical-align: bottom; width: 40%;">
<div style="text-align: left; text-indent:0px;margin-right:0px;padding-bottom:1px;margin-left:0px;"><font style="font-weight: bold; color: #000000; font-family: Times New Roman; font-size: 13px">
Eugene Woychyshyn</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; font-size: 13px; display: inline-block; width: 5%; padding-bottom: 1px;">$</font><font style="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; font-size: 13px; display: inline-block; width: 75%; padding-bottom: 1px;">0.59</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align: bottom; width: 12%;">
<div style="text-align: center; text-indent:0px;margin-right:0px;padding-bottom:1px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">01-Nov-18</font></div>
</td>
<td style="vertical-align: bottom; width: 12%;">
<div style="text-align: center; text-indent:0px;margin-right:0px;padding-bottom:1px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">01-Nov-23</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;font-weight:bold;padding-bottom:1px;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; font-family:Times New Roman;color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;font-weight:bold;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; font-family:Times New Roman;color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;font-weight:bold;width:75%;font-size:13px;">150,000</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;font-weight:bold;padding-bottom:1px;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; padding-bottom:1px;width:10%;vertical-align:bottom;display:inline-block;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; display: inline-block; padding-bottom: 1px;">
<div><font style="font-size:13px;font-family:Times New Roman;">&#xA0;</font></div>
</font><font style="text-align: left; padding-bottom:1px;width:10%;vertical-align:bottom;display:inline-block;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td colspan="1" style="vertical-align: bottom; width: 40%;">
<div style="text-align: left; text-indent:0px;margin-right:0px;padding-bottom:1px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">V-P
Finance &amp; CFO</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; font-family: Times New Roman; vertical-align: bottom; font-size: 13px; display: inline-block; width: 5%; padding-bottom: 1px;">&#xA0;</font><font style="text-align: right; font-family: Times New Roman; vertical-align: bottom; font-size: 13px; display: inline-block; width: 75%; padding-bottom: 1px;">&#xA0;</font><font style="text-align: left; font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align: bottom; width: 12%;">
<div style="margin-left:0px;padding-bottom:1px;"><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td style="vertical-align: bottom; width: 12%;">
<div style="margin-left:0px;padding-bottom:1px;"><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;font-weight:bold;padding-bottom:1px;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; font-family:Times New Roman;color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;font-weight:bold;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; font-family:Times New Roman;color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;font-weight:bold;width:75%;font-size:13px;">150,000</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;font-weight:bold;padding-bottom:1px;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;font-weight:bold;padding-bottom:1px;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; font-size: 13px; display: inline-block; font-weight: bold; width: 5%; padding-bottom: 1px;">&#xA0;</font><font style="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; font-size: 13px; display: inline-block; font-weight: bold; width: 75%; padding-bottom: 1px;">16.1</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;font-weight:bold;padding-bottom:1px;width:10%;font-size:13px;">%</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td colspan="1" style="vertical-align: bottom; width: 40%;">
<div style="margin-left:0px;"><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align: bottom; width: 12%;">
<div style="margin-left:0px;"><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td style="vertical-align: bottom; width: 12%;">
<div style="margin-left:0px;"><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td colspan="1" style="vertical-align: bottom; width: 40%;">
<div style="text-align: left; text-indent:0px;margin-right:0px;padding-bottom:1px;margin-left:0px;"><font style="font-weight: bold; color: #000000; font-family: Times New Roman; font-size: 13px">
Charles Selby</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; font-size: 13px; display: inline-block; width: 5%; padding-bottom: 1px;">$</font><font style="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; font-size: 13px; display: inline-block; width: 75%; padding-bottom: 1px;">1.50</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align: bottom; width: 12%;">
<div style="text-align: center; text-indent:0px;margin-right:0px;padding-bottom:1px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">22-Jul-16</font></div>
</td>
<td style="vertical-align: bottom; width: 12%;">
<div style="text-align: center; text-indent:0px;margin-right:0px;padding-bottom:1px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">22-Jul-21</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">50,000</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; font-family: Times New Roman; vertical-align: bottom; font-size: 13px; display: inline-block; width: 5%; padding-bottom: 1px;">&#xA0;</font><font style="text-align: right; font-family: Times New Roman; vertical-align: bottom; font-size: 13px; display: inline-block; width: 75%; padding-bottom: 1px;">&#xA0;</font><font style="text-align: left; font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td colspan="1" style="vertical-align: bottom; width: 40%;">
<div style="text-align: left; text-indent:0px;margin-right:0px;padding-bottom:1px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Director</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; font-family: Times New Roman; vertical-align: bottom; font-size: 13px; display: inline-block; width: 5%; padding-bottom: 1px;">&#xA0;</font><font style="text-align: right; font-family: Times New Roman; vertical-align: bottom; font-size: 13px; display: inline-block; width: 75%; padding-bottom: 1px;">&#xA0;</font><font style="text-align: left; font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align: bottom; width: 12%;">
<div style="margin-left:0px;padding-bottom:1px;"><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td style="vertical-align: bottom; width: 12%;">
<div style="margin-left:0px;padding-bottom:1px;"><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;font-weight:bold;padding-bottom:1px;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; font-family:Times New Roman;color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;font-weight:bold;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; font-family:Times New Roman;color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;font-weight:bold;width:75%;font-size:13px;">50,000</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;font-weight:bold;padding-bottom:1px;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;font-weight:bold;padding-bottom:1px;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; font-size: 13px; display: inline-block; font-weight: bold; width: 5%; padding-bottom: 1px;">&#xA0;</font><font style="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; font-size: 13px; display: inline-block; font-weight: bold; width: 75%; padding-bottom: 1px;">5.4</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;font-weight:bold;padding-bottom:1px;width:10%;font-size:13px;">%</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td colspan="1" style="vertical-align: bottom; width: 40%;">
<div style="margin-left:0px;"><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align: bottom; width: 12%;">
<div style="margin-left:0px;"><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td style="vertical-align: bottom; width: 12%;">
<div style="margin-left:0px;"><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td colspan="1" style="vertical-align: bottom; width: 40%;">
<div style="text-align: left; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="font-weight: bold; color: #000000; font-family: Times New Roman; font-size: 13px">
John Tilson</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">$</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">2.10</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align: bottom; width: 12%;">
<div style="text-align: center; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">16-Sep-15</font></div>
</td>
<td style="vertical-align: bottom; width: 12%;">
<div style="text-align: center; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">16-Sep-20</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">150,000</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td colspan="1" style="vertical-align: bottom; width: 40%;">
<div style="text-align: left; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Director</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">$</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">1.73</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align: bottom; width: 12%;">
<div style="text-align: center; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">10-Dec-15</font></div>
</td>
<td style="vertical-align: bottom; width: 12%;">
<div style="text-align: center; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">10-Dec-20</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">25,600</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td colspan="1" style="vertical-align: bottom; width: 40%;">
<div style="margin-left:0px;"><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">$</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">1.48</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align: bottom; width: 12%;">
<div style="text-align: center; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">14-Jul-16</font></div>
</td>
<td style="vertical-align: bottom; width: 12%;">
<div style="text-align: center; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">14-Jul-21</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">15,000</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td colspan="1" style="vertical-align: bottom; width: 40%;">
<div style="margin-left:0px;padding-bottom:1px;"><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; font-size: 13px; display: inline-block; width: 5%; padding-bottom: 1px;">$</font><font style="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; font-size: 13px; display: inline-block; width: 75%; padding-bottom: 1px;">1.45</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align: bottom; width: 12%;">
<div style="text-align: center; text-indent:0px;margin-right:0px;padding-bottom:1px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">21-Dec-16</font></div>
</td>
<td style="vertical-align: bottom; width: 12%;">
<div style="text-align: center; text-indent:0px;margin-right:0px;padding-bottom:1px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">21-Dec-21</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">15,000</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; font-family: Times New Roman; vertical-align: bottom; font-size: 13px; display: inline-block; width: 5%; padding-bottom: 1px;">&#xA0;</font><font style="text-align: right; font-family: Times New Roman; vertical-align: bottom; font-size: 13px; display: inline-block; width: 75%; padding-bottom: 1px;">&#xA0;</font><font style="text-align: left; font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td colspan="1" style="vertical-align: bottom; width: 40%;">
<div style="margin-left:0px;padding-bottom:1px;"><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; font-family: Times New Roman; vertical-align: bottom; font-size: 13px; display: inline-block; width: 5%; padding-bottom: 1px;">&#xA0;</font><font style="text-align: right; font-family: Times New Roman; vertical-align: bottom; font-size: 13px; display: inline-block; width: 75%; padding-bottom: 1px;">&#xA0;</font><font style="text-align: left; font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align: bottom; width: 12%;">
<div style="margin-left:0px;padding-bottom:1px;"><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td style="vertical-align: bottom; width: 12%;">
<div style="margin-left:0px;padding-bottom:1px;"><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;font-weight:bold;padding-bottom:1px;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; font-family:Times New Roman;color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;font-weight:bold;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; font-family:Times New Roman;color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;font-weight:bold;width:75%;font-size:13px;">205,600</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;font-weight:bold;padding-bottom:1px;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;font-weight:bold;padding-bottom:1px;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; font-size: 13px; display: inline-block; font-weight: bold; width: 5%; padding-bottom: 1px;">&#xA0;</font><font style="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; font-size: 13px; display: inline-block; font-weight: bold; width: 75%; padding-bottom: 1px;">22.0</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;font-weight:bold;padding-bottom:1px;width:10%;font-size:13px;">%</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td colspan="1" style="vertical-align: bottom; width: 40%;">
<div style="margin-left:0px;"><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align: bottom; width: 12%;">
<div style="margin-left:0px;"><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td style="vertical-align: bottom; width: 12%;">
<div style="margin-left:0px;"><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td colspan="1" style="vertical-align: bottom; width: 40%;">
<div style="text-align: left; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="font-weight: bold; color: #000000; font-family: Times New Roman; font-size: 13px">
Thomas Valentine</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">$</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">1.48</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align: bottom; width: 12%;">
<div style="text-align: center; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">14-Jul-16</font></div>
</td>
<td style="vertical-align: bottom; width: 12%;">
<div style="text-align: center; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">14-Jul-21</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">7,500</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td colspan="1" style="vertical-align: bottom; width: 40%;">
<div style="text-align: left; text-indent:0px;margin-right:0px;padding-bottom:1px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Director</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; font-size: 13px; display: inline-block; width: 5%; padding-bottom: 1px;">$</font><font style="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; font-size: 13px; display: inline-block; width: 75%; padding-bottom: 1px;">1.45</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align: bottom; width: 12%;">
<div style="text-align: center; text-indent:0px;margin-right:0px;padding-bottom:1px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">21-Dec-16</font></div>
</td>
<td style="vertical-align: bottom; width: 12%;">
<div style="text-align: center; text-indent:0px;margin-right:0px;padding-bottom:1px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">21-Dec-21</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">7,500</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; font-family: Times New Roman; vertical-align: bottom; font-size: 13px; display: inline-block; width: 5%; padding-bottom: 1px;">&#xA0;</font><font style="text-align: right; font-family: Times New Roman; vertical-align: bottom; font-size: 13px; display: inline-block; width: 75%; padding-bottom: 1px;">&#xA0;</font><font style="text-align: left; font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td colspan="1" style="vertical-align: bottom; width: 40%;">
<div style="margin-left:0px;padding-bottom:1px;"><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; font-family: Times New Roman; vertical-align: bottom; font-size: 13px; display: inline-block; width: 5%; padding-bottom: 1px;">&#xA0;</font><font style="text-align: right; font-family: Times New Roman; vertical-align: bottom; font-size: 13px; display: inline-block; width: 75%; padding-bottom: 1px;">&#xA0;</font><font style="text-align: left; font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align: bottom; width: 12%;">
<div style="margin-left:0px;padding-bottom:1px;"><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td style="vertical-align: bottom; width: 12%;">
<div style="margin-left:0px;padding-bottom:1px;"><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;font-weight:bold;padding-bottom:1px;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; font-family:Times New Roman;color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;font-weight:bold;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; font-family:Times New Roman;color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;font-weight:bold;width:75%;font-size:13px;">15,000</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;font-weight:bold;padding-bottom:1px;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;font-weight:bold;padding-bottom:1px;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; font-size: 13px; display: inline-block; font-weight: bold; width: 5%; padding-bottom: 1px;">&#xA0;</font><font style="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; font-size: 13px; display: inline-block; font-weight: bold; width: 75%; padding-bottom: 1px;">1.6</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;font-weight:bold;padding-bottom:1px;width:10%;font-size:13px;">%</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td colspan="1" style="vertical-align: bottom; width: 40%;">
<div style="margin-left:0px;"><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align: bottom; width: 12%;">
<div style="margin-left:0px;"><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td style="vertical-align: bottom; width: 12%;">
<div style="margin-left:0px;"><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td colspan="1" style="vertical-align: bottom; width: 40%;">
<div style="text-align: left; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-weight: bold; font-family: Times New Roman; font-size: 13px">
Bruce G. Wilcox</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">$</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">2.10</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align: bottom; width: 12%;">
<div style="text-align: center; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">16-Sep-15</font></div>
</td>
<td style="vertical-align: bottom; width: 12%;">
<div style="text-align: center; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">16-Sep-20</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">150,000</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td colspan="1" style="vertical-align: bottom; width: 40%;">
<div style="text-align: left; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Director</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">$</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">1.73</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align: bottom; width: 12%;">
<div style="text-align: center; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">10-Dec-15</font></div>
</td>
<td style="vertical-align: bottom; width: 12%;">
<div style="text-align: center; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">10-Dec-20</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">17,000</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td colspan="1" style="vertical-align: bottom; width: 40%;">
<div style="margin-left:0px;"><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">$</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">1.48</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align: bottom; width: 12%;">
<div style="text-align: center; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">14-Jul-16</font></div>
</td>
<td style="vertical-align: bottom; width: 12%;">
<div style="text-align: center; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">14-Jul-21</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">15,000</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td colspan="1" style="vertical-align: bottom; width: 40%;">
<div style="margin-left:0px;padding-bottom:1px;"><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; font-size: 13px; display: inline-block; width: 5%; padding-bottom: 1px;">$</font><font style="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; font-size: 13px; display: inline-block; width: 75%; padding-bottom: 1px;">1.45</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align: bottom; width: 12%;">
<div style="text-align: center; text-indent:0px;margin-right:0px;padding-bottom:1px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">21-Dec-16</font></div>
</td>
<td style="vertical-align: bottom; width: 12%;">
<div style="text-align: center; text-indent:0px;margin-right:0px;padding-bottom:1px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">21-Dec-21</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">15,000</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; font-family: Times New Roman; vertical-align: bottom; font-size: 13px; display: inline-block; width: 5%; padding-bottom: 1px;">&#xA0;</font><font style="text-align: right; font-family: Times New Roman; vertical-align: bottom; font-size: 13px; display: inline-block; width: 75%; padding-bottom: 1px;">&#xA0;</font><font style="text-align: left; font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td colspan="1" style="vertical-align: bottom; width: 40%;">
<div style="margin-left:0px;padding-bottom:1px;"><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; font-family: Times New Roman; vertical-align: bottom; font-size: 13px; display: inline-block; width: 5%; padding-bottom: 1px;">&#xA0;</font><font style="text-align: right; font-family: Times New Roman; vertical-align: bottom; font-size: 13px; display: inline-block; width: 75%; padding-bottom: 1px;">&#xA0;</font><font style="text-align: left; font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align: bottom; width: 12%;">
<div style="margin-left:0px;padding-bottom:1px;"><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td style="vertical-align: bottom; width: 12%;">
<div style="margin-left:0px;padding-bottom:1px;"><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;font-weight:bold;padding-bottom:1px;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; font-family:Times New Roman;color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;font-weight:bold;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; font-family:Times New Roman;color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;font-weight:bold;width:75%;font-size:13px;">197,000</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;font-weight:bold;padding-bottom:1px;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;font-weight:bold;padding-bottom:1px;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; font-size: 13px; display: inline-block; font-weight: bold; width: 5%; padding-bottom: 1px;">&#xA0;</font><font style="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; font-size: 13px; display: inline-block; font-weight: bold; width: 75%; padding-bottom: 1px;">21.1</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;font-weight:bold;padding-bottom:1px;width:10%;font-size:13px;">%</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td colspan="1" style="vertical-align: bottom; width: 40%;">
<div style="margin-left:0px;padding-bottom:1px;"><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; font-family: Times New Roman; vertical-align: bottom; font-size: 13px; display: inline-block; width: 5%; padding-bottom: 1px;">&#xA0;</font><font style="text-align: right; font-family: Times New Roman; vertical-align: bottom; font-size: 13px; display: inline-block; width: 75%; padding-bottom: 1px;">&#xA0;</font><font style="text-align: left; font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align: bottom; width: 12%;">
<div style="margin-left:0px;padding-bottom:1px;"><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td style="vertical-align: bottom; width: 12%;">
<div style="margin-left:0px;padding-bottom:1px;"><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; font-family:Times New Roman;vertical-align:bottom;font-size:13px;display:inline-block;width:5%;border-bottom:solid 1px #000000;">&#xA0;</font><font style="text-align: right; font-family:Times New Roman;vertical-align:bottom;font-size:13px;display:inline-block;width:75%;border-bottom:solid 1px #000000;">&#xA0;</font><font style="text-align: left; font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; font-family: Times New Roman; vertical-align: bottom; font-size: 13px; display: inline-block; width: 5%; padding-bottom: 1px;">&#xA0;</font><font style="text-align: right; font-family: Times New Roman; vertical-align: bottom; font-size: 13px; display: inline-block; width: 75%; padding-bottom: 1px;">&#xA0;</font><font style="text-align: left; font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td colspan="3" style="vertical-align: bottom; width: 64%;">
<font style="text-align: left; vertical-align:bottom;display:inline-block;">
<div style="margin-left:144px;padding-bottom:1px;">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-weight: bold; color: #000000; font-family: Times New Roman; font-size: 13px">
Total number of stock options held by officers and
directors</font></div>
</div>
</font></td>
<td style="vertical-align: bottom; width: 12%;">
<div style="margin-left:0px;padding-bottom:1px;"><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;font-weight:bold;padding-bottom:1px;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; font-family:Times New Roman;color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;font-weight:bold;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; font-family:Times New Roman;color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;font-weight:bold;width:75%;font-size:13px;">617,600</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;font-weight:bold;padding-bottom:1px;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;font-weight:bold;padding-bottom:1px;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; font-size: 13px; display: inline-block; font-weight: bold; width: 5%; padding-bottom: 1px;">&#xA0;</font><font style="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; font-size: 13px; display: inline-block; font-weight: bold; width: 75%; padding-bottom: 1px;">66.2</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;font-weight:bold;padding-bottom:1px;width:10%;font-size:13px;">%</font></div>
</td>
</tr></table>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px;">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Charles
Selby currently has 16,573 DSUs.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="display: table; margin-left: 48px">
<div style="display: table-row">
<div style="display: table-cell; width: 84px"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">ITEM
7.&#xA0;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">MAJOR
SHAREHOLDERS AND RELATED PARTY TRANSACTIONS</font></div>
</div>
</div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="margin-left: 24px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 48px">
<font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">A.</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">Major
shareholders.</font></div>
</div>
</div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">The
following table sets forth information concerning the beneficial
ownership of our common shares as of</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">May 5,
2020 by persons who beneficially own 5% or more of the outstanding
common shares of NXT, each person who is a director of NXT, each
executive officer named in this Form 20-F, each individual
referenced in Item 6.E above and all directors and executive
officers as a group. For the purposes of this Form 20-F, a person
is considered to be a &#x201C;beneficial owner&#x201D; of common
shares in the Company if that person has, or shares with another
person, the power to direct the vote or disposition of the common
shares or to receive the economic benefit of ownership of the
common shares.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">A
person is also deemed to be a beneficial owner of a common share if
that person has the right to acquire the share within 60 days by
option or other agreement (whether or not, in the case of a stock
option, the current market price of the underlying common share is
below the stock option exercise price). Therefore, the table below
also reflects, for each such beneficial owner, the number of
options exercisable into common shares within 60 days of May 5,
2020 that are owned by each beneficial owner, but, in determining
the percentage ownership and general voting power of such person,
does not assume the exercise of options or the conversion of
securities owned by any other person.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">We
believe that the beneficial owners of common shares listed below,
based on information they furnished, have sole voting and
investment power over the number of shares listed opposite their
names. The percentage of beneficial ownership is based on
64,406,891 common shares issued and outstanding as of May 5, 2020.
This total of 64,406,891 excludes all outstanding options and
warrants that are exercisable within 60 days of May 5, 2020 (which
is adjusted for each individuals&#x2019; % purposes as noted in
footnote 4 below).</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div id="pgbrk" style="width: 100%; margin-left: 0px; text-indent: 0px; margin-right: 0px">
<div id="ftr">
<div style="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div id="pn" style="text-align: center"><font style="font-family: Times New Roman; font-size: 13px">47</font></div>
</div>
<div id="pb" style="text-align: center; page-break-after: always; margin-left: 0px; margin-right: 0px; margin-bottom: 6px; width: 100%; height: 1px; background-color: #000000">
<!--page break--></div>
<div id="hdr">
<div style="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: left">
<table cellpadding="0" cellspacing="0" style="text-align: left; width: 100%; font-family: Times New Roman; font-size: 13px; margin: 0px auto 0px 0px;">
<tr>
<td style="vertical-align: bottom; width: 73%;">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Beneficial
Ownership of Directors and Officers
(&#x201C;D&amp;O&#x201D;)</font></div>
</td>
<td style="width: 1%;">
<div><font>&#xA0;</font></div>
</td>
<td style="vertical-align: bottom; width: 12%; border-bottom: 2px solid #000000">
<div style="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-weight: bold; font-size: 11px;"><font style="font-family: Times New Roman; font-weight: bold;">Beneficially</font></font></div>
<div style="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-weight: bold; font-size: 11px;"><font style="font-family: Times New Roman; font-weight: bold;">Owned as
at</font></font></div>
<div style="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-weight: bold; font-size: 11px;"><font style="font-family: Times New Roman; font-weight: bold;">May 5,
2020</font></font></div>
</td>
<td style="width: 1%;">
<div><font style="font-weight: bold; font-size: 11px;">&#xA0;</font></div>
</td>
<td style="vertical-align: bottom; width: 12%; border-bottom: 2px solid #000000">
<div style="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-weight: bold; font-size: 11px;"><font style="font-family: Times New Roman; font-weight: bold;">Percent
of</font></font></div>
<div style="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-weight: bold; font-size: 11px;"><font style="font-family: Times New Roman; font-weight: bold;">Common</font></font></div>
<div style="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-weight: bold; font-size: 11px;"><font style="font-family: Times New Roman; font-weight: bold;">Shares
<font style="font-size: 70%; vertical-align: top; font-weight: bold;">4</font>&#xA0;<br>
</font></font></div>
</td>
<td style="width: 1%;">
<div><font>&#xA0;</font></div>
</td>
</tr><tr>
<td style="vertical-align: bottom; width: 73%;">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Directors
and Officers:</font></div>
</td>
<td style="width: 1%;">
<div><font>&#xA0;</font></div>
</td>
<td style="vertical-align: bottom; width: 12%">
<div><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td style="width: 1%;">
<div><font>&#xA0;</font></div>
</td>
<td style="vertical-align: bottom; width: 12%">
<div><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td style="width: 1%;">
<div><font>&#xA0;</font></div>
</td>
</tr><tr style="background-color: rgb(204, 238, 255);">
<td style="vertical-align: bottom; width: 73%;">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">George
Liszicasz <font style="font-size: 70%; vertical-align: top">1 &amp;
2</font></font></div>
</td>
<td style="width: 1%;">
<div><font>&#xA0;</font></div>
</td>
<td style="vertical-align: bottom; width: 12%">
<div style="text-align: right; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;
&#xA0; 15,014,617&#xA0;</font></div>
</td>
<td style="width: 1%;">
<div><font>&#xA0;</font></div>
</td>
<td style="vertical-align: bottom; width: 12%">
<div style="text-align: right; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;
&#xA0; 23.31</font></div>
</td>
<td style="width: 1%;">
<div><font>%</font></div>
</td>
</tr><tr>
<td style="vertical-align: bottom; width: 73%;">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Charles
Selby <font style="font-size: 70%; vertical-align: top">1</font></font></div>
</td>
<td style="width: 1%;">
<div><font>&#xA0;</font></div>
</td>
<td style="vertical-align: bottom; width: 12%">
<div style="text-align: right; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;
&#xA0; 458,161&#xA0;</font></div>
</td>
<td style="width: 1%;">
<div><font>&#xA0;</font></div>
</td>
<td style="vertical-align: bottom; width: 12%">
<div style="text-align: right; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;&#xA0;
*<br></font></div>
</td>
<td style="width: 1%;">
<div><font><font style="font-size: 70%; vertical-align: top">3</font></font></div>
</td>
</tr><tr style="background-color: rgb(204, 238, 255);">
<td style="vertical-align: bottom; width: 73%;">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">John
Tilson <font style="font-size: 70%; vertical-align: top">1</font></font></div>
</td>
<td style="width: 1%;">
<div><font>&#xA0;</font></div>
</td>
<td style="vertical-align: bottom; width: 12%">
<div style="text-align: right; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;
&#xA0; 3,832,850&#xA0;</font></div>
</td>
<td style="width: 1%;">
<div><font>&#xA0;</font></div>
</td>
<td style="vertical-align: bottom; width: 12%">
<div style="text-align: right; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;
&#xA0; 5.95</font></div>
</td>
<td style="width: 1%;">
<div><font>%</font></div>
</td>
</tr><tr>
<td style="vertical-align: bottom; width: 73%;">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Thomas
E. Valentine <font style="font-size: 70%; vertical-align: top">1</font></font></div>
</td>
<td style="width: 1%;">
<div><font>&#xA0;</font></div>
</td>
<td style="vertical-align: bottom; width: 12%">
<div style="text-align: right; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;
&#xA0; 15,000&#xA0;</font></div>
</td>
<td style="width: 1%;">
<div><font>&#xA0;</font></div>
</td>
<td style="vertical-align: bottom; width: 12%">
<div style="text-align: right; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;
&#xA0; *<br></font></div>
</td>
<td style="width: 1%;">
<div><font><font style="font-size: 70%; vertical-align: top">3</font></font></div>
</td>
</tr><tr style="background-color: rgb(204, 238, 255);">
<td style="vertical-align: bottom; width: 73%;">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Bruce
G. Wilcox <font style="font-size: 70%; vertical-align: top">1</font></font></div>
</td>
<td style="width: 1%;">
<div><font>&#xA0;</font></div>
</td>
<td style="vertical-align: bottom; width: 12%">
<div style="text-align: right; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;
&#xA0; 562,000&#xA0;</font></div>
</td>
<td style="width: 1%;">
<div><font>&#xA0;</font></div>
</td>
<td style="vertical-align: bottom; width: 12%">
<div style="text-align: right; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;
&#xA0; *<br></font></div>
</td>
<td style="width: 1%;">
<div><font style="vertical-align: top; font-size: 70%;">3</font></div>
</td>
</tr><tr>
<td style="vertical-align: bottom; width: 73%;">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Eugene
Woychyshyn <font style="font-size: 70%; vertical-align: top">2</font><br></font></div>
</td>
<td style="width: 1%;">
<div><font>&#xA0;</font></div>
</td>
<td style="vertical-align: bottom; width: 12%; border-bottom: 2px solid #000000">
<div style="text-align: right; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;
&#xA0; 146,200&#xA0;</font></div>
</td>
<td style="width: 1%;">
<div><font>&#xA0;</font></div>
</td>
<td style="vertical-align: bottom; width: 12%; border-bottom: 2px solid #000000">
<div style="text-align: right; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;
&#xA0; *<br></font></div>
</td>
<td style="width: 1%;">
<div><font style="vertical-align: top; font-size: 70%;">3</font></div>
</td>
</tr><tr style="background-color: rgb(204, 238, 255);">
<td style="vertical-align: bottom; width: 73%;">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;Total
D &amp; O Common Shares</font></div>
</td>
<td style="width: 1%;">
<div><font>&#xA0;</font></div>
</td>
<td style="vertical-align: bottom; width: 12%">
<div style="text-align: right; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;
&#xA0; 20,028,828&#xA0;</font></div>
</td>
<td style="width: 1%;">
<div><font>&#xA0;</font></div>
</td>
<td style="vertical-align: bottom; width: 12%">
<div style="text-align: right; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;
&#xA0; 31.10</font></div>
</td>
<td style="width: 1%;">
<div><font>%</font></div>
</td>
</tr><tr>
<td style="vertical-align: bottom; width: 73%;">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Major
Shareholders (&gt; 5%):</font></div>
</td>
<td style="width: 1%;">
<div><font>&#xA0;</font></div>
</td>
<td style="vertical-align: bottom; width: 12%">
<div style="text-align: right; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;
&#xA0; &#xA0; &#xA0;</font></div>
</td>
<td style="width: 1%;">
<div><font>&#xA0;</font></div>
</td>
<td style="vertical-align: bottom; width: 12%">
<div style="text-align: right; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;
&#xA0; &#xA0; &#xA0;</font></div>
</td>
<td style="width: 1%;">
<div><font>&#xA0;</font></div>
</td>
</tr><tr style="background-color: rgb(204, 238, 255);">
<td style="vertical-align: bottom; width: 73%;">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Alberta
Green Ventures Limited Partnership</font></div>
</td>
<td style="width: 1%;">
<div><font>&#xA0;</font></div>
</td>
<td style="vertical-align: bottom; width: 12%">
<div style="text-align: right; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;
&#xA0; 6,764,945&#xA0;</font></div>
</td>
<td style="width: 1%;">
<div><font>&#xA0;</font></div>
</td>
<td style="vertical-align: bottom; width: 12%">
<div style="text-align: right; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;
&#xA0; 10.50</font></div>
</td>
<td style="width: 1%;">
<div><font>%</font></div>
</td>
</tr><tr>
<td style="vertical-align: bottom; width: 73%;">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Mork
Capital Management, LLC.</font></div>
</td>
<td style="width: 1%;">
<div><font>&#xA0;</font></div>
</td>
<td style="vertical-align: bottom; width: 12%">
<div style="text-align: right; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;
&#xA0; 5,717,420&#xA0;</font></div>
</td>
<td style="width: 1%;">
<div><font>&#xA0;</font></div>
</td>
<td style="vertical-align: bottom; width: 12%">
<div style="text-align: right; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;
&#xA0; 8.88</font></div>
</td>
<td style="width: 1%;">
<div><font>%</font></div>
</td>
</tr></table>
</div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="display: table; margin-left: 24px;">
<div style="display: table-row;">
<div style="display: table-cell; width: 24px;"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top; color: #000000">1</font></font></div>
<div style="text-align: justify; display: table-cell; margin-left: 0px; text-indent: 0px; margin-right: 0px;"><font style="font-family: Times New Roman; font-size: 13px"><font style="color: #000000">Director
of NXT</font></font></div>
</div>
</div>
<div style="display: table; margin-left: 24px;">
<div style="display: table-row;">
<div style="display: table-cell; width: 24px;"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top; color: #000000">2</font></font></div>
<div style="text-align: justify; display: table-cell; margin-left: 0px; text-indent: 0px; margin-right: 0px;"><font style="font-family: Times New Roman; font-size: 13px"><font style="color: #000000">Officer
of NXT</font></font></div>
</div>
</div>
<div style="display: table; margin-left: 24px;">
<div style="display: table-row;">
<div style="display: table-cell; width: 24px;"><font style="font-size: 70%; vertical-align: top; color: #000000">3</font></div>
<div style="text-align: justify; display: table-cell; margin-left: 0px; text-indent: 0px; margin-right: 0px;"><font style="color: #000000"><font style="font-size: 11px"><font style="font-size: 13px">Beneficially
owns less than one percent of the total outstanding common
shares.</font></font></font></div>
</div>
</div>
<div style="display: table; margin-left: 24px;">
<div style="display: table-row;">
<div style="display: table-cell; width: 24px;"><font style="font-size: 70%; vertical-align: top; color: #000000">4</font></div>
<div style="text-align: justify; display: table-cell; margin-left: 0px; text-indent: 0px; margin-right: 0px;"><font style="font-family: Times New Roman; font-size: 13px;"><font style="font-size: 11px"><font style="font-size: 13px">For each beneficial
owner&#x2019;s percentage of common shares calculation, it is
assumed that any stock options that they hold which are or will
become exercisable within 60 days of May 5, 2020 have been
exercised (while also assuming that no one else similarly
exercises), and such options are thus included in both the
numerator and denominator for purposes of each of their own
individual calculations as
follows:</font></font><br></font></div>
</div>
</div>
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px;"><br></div>
<div>
<table cellpadding="0" cellspacing="0" style="margin-right:0px;width:100%;font-size:inherit;font-family:inherit;margin-left:0px;">
<tr>
<td rowspan="1" style="vertical-align:bottom;width:64%;">
<div style="margin-left:0px;"><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td rowspan="1" style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-weight: bold; font-size: 11px;">
<div><font style="font-family: Times New Roman; color: rgb(0, 0, 0); font-weight: bold;">
common</font></div>
</font><font style="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font></div>
</td>
<td rowspan="1" style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-weight: bold; font-size: 11px;">
<div><font style="font-family: Times New Roman; color: rgb(0, 0, 0); font-weight: bold;">
&#xA0;vested &amp;</font></div>
</font><font style="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font></div>
</td>
<td rowspan="1" style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-weight: bold; font-size: 11px;">
<div><font style="font-family: Times New Roman; font-weight: bold;">&#xA0;</font></div>
</font><font style="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font></div>
</td>
</tr><tr>
<td style="vertical-align:bottom;width:64%;">
<div style="margin-left:0px;"><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-weight: bold; font-size: 11px;">
<div><font style="font-family: Times New Roman; color: rgb(0, 0, 0); font-weight: bold;">
shares</font></div>
</font><font style="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-weight: bold; font-size: 11px;">
<div><font style="font-family: Times New Roman; color: rgb(0, 0, 0); font-weight: bold;">
&#xA0;exercisable</font></div>
</font><font style="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-weight: bold; font-size: 11px;">
<div><font style="font-weight: bold; font-family: Times New Roman; color: rgb(0, 0, 0);">
Pro forma</font></div>
</font><font style="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font></div>
</td>
</tr><tr>
<td style="vertical-align:bottom;width:64%;">
<div style="margin-left:0px;padding-bottom:1px;"><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; border-bottom: 1px solid rgb(0, 0, 0); display: inline-block; font-weight: bold; font-size: 11px;">
<div><font style="font-family: Times New Roman; color: rgb(0, 0, 0); font-weight: bold;">
held</font></div>
</font><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; border-bottom: 1px solid rgb(0, 0, 0); display: inline-block; font-weight: bold; font-size: 11px;">
<div><font style="font-family: Times New Roman; color: rgb(0, 0, 0); font-weight: bold;">
&#xA0;options</font></div>
</font><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; border-bottom: 1px solid rgb(0, 0, 0); display: inline-block; font-weight: bold; font-size: 11px;">
<div><font style="font-weight: bold; font-family: Times New Roman; color: rgb(0, 0, 0);">
&#xA0;total</font></div>
</font><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font></div>
</td>
</tr><tr>
<td style="vertical-align:bottom;width:64%;">
<div style="margin-left:0px;"><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-weight: bold; font-size: 11px;">
<div><font style="font-family: Times New Roman; font-weight: bold;">&#xA0;</font></div>
</font><font style="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-weight: bold; font-size: 11px;">
<div><font style="font-family: Times New Roman; font-weight: bold;">&#xA0;</font></div>
</font><font style="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-weight: bold; font-size: 11px;">
<div><font style="font-family: Times New Roman; font-weight: bold;">&#xA0;</font></div>
</font><font style="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td style="vertical-align:bottom;width:64%;">
<div style="text-align: left; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Liszicasz</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">15,014,617</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">15,014,617</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td style="vertical-align:bottom;width:64%;">
<div style="text-align: left; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Selby</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">408,161</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">50,000</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">458,161</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td style="vertical-align:bottom;width:64%;">
<div style="text-align: left; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Tilson</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">3,627,250</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">205,600</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">3,832,850</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td style="vertical-align:bottom;width:64%;">
<div style="text-align: left; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Valentine</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">-</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">15,000</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">15,000</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td style="vertical-align:bottom;width:64%;">
<div style="text-align: left; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Wilcox</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">365,000</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">197,000</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">562,000</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td style="vertical-align:bottom;width:64%;">
<div style="text-align: left; text-indent:0px;margin-right:0px;padding-bottom:1px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Woychyshyn</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">46,200</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">100,000</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">146,200</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td style="vertical-align:bottom;width:64%;">
<div style="margin-left:0px;padding-bottom:1px;"><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">19,461,228</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">567,600</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">20,028,828</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
</tr></table>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px;">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Major
changes in the last 3 years in the percentage ownership of persons
who beneficially own (as at the respective December 31, year-end
dates) 5% or more of the outstanding common shares of NXT
were:</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="display: table; margin-left: 24px;">
<div style="display: table-row;">
<div style="text-align: justify; display: table-cell; width: 24px;">
<font style="font-family: Times New Roman; font-size: 13px">1.</font></div>
<div style="text-align: justify; display: table-cell; margin-left: 0px; text-indent: 0px; margin-right: 0px;">
<font style="font-family: Times New Roman; font-size: 13px">Mr.
Liszicasz entered into a matrimonial settlement dated December 23,
2019 that includes the transfer of 800,000 NXT common shares to his
former spouse by March 31, 2020.</font></div>
</div>
</div>
<div style="display: table; margin-left: 24px;">
<div style="display: table-row;">
<div style="text-align: justify; display: table-cell; width: 24px;">
<font style="font-family: Times New Roman; font-size: 13px">2.</font></div>
<div style="text-align: justify; display: table-cell; margin-left: 0px; text-indent: 0px; margin-right: 0px;">
<font style="font-family: Times New Roman; font-size: 13px">Since
May 5, 2019 Mr. Liszicasz, Mr. Tilson, and Mr. Wilcox acquired
common shares in acquisitions on the public markets.</font></div>
</div>
</div>
<div style="display: table; margin-left: 24px;">
<div style="display: table-row;">
<div style="text-align: justify; display: table-cell; width: 24px;">
<font style="font-family: Times New Roman; font-size: 13px">3.</font></div>
<div style="text-align: justify; display: table-cell; margin-left: 0px; text-indent: 0px; margin-right: 0px;">
<font style="font-family: Times New Roman; font-size: 13px">In
December 2019 the Company completed the $1,250,000 targeted issuer
bid, purchasing for cancellation 4,166,667 common shares in the
capital of the Company from AGV, representing approximately 6.08%
of the total outstanding Common Shares as of November 14, 2019, at
a price of C$0.30 per Common Share.</font></div>
</div>
</div>
<div style="display: table; margin-left: 24px;">
<div style="display: table-row;">
<div style="text-align: justify; display: table-cell; width: 24px;">
<font style="font-family: Times New Roman; font-size: 13px">4.</font></div>
<div style="text-align: justify; display: table-cell; margin-left: 0px; text-indent: 0px; margin-right: 0px;">
<font style="font-family: Times New Roman; font-size: 13px">In July
2018, the company completed the Private Placement with AGV. In
total, AGV purchased 10,264,946&#xA0;Units at a price of $0.924 per
Unit for total gross proceeds of approximately $9,484,810. As a
result of the Private Placement, a total of 10,264,946 common
shares and a total of 3,421,648 warrants were issued to the
Subscriber. As of October 31, 2019 AGV&#x2019;s 3,421,648 warrants
(&#x201C;Warrants&#x201D;) expired.</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 10">&#xA0;</font>
<font style="font-family: Times New Roman; font-size: 13px;"><br>
</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">NXT is
a foreign private issuer for its current fiscal year. As of the
last business day of the Company&#x2019;s first fiscal quarter, the
majority of the Company&#x2019;s executive officers and directors
are Canadian citizens who reside in Canada, the majority of the
Company&#x2019;s assets are in Canada and the Company is
administered principally in Canada. The Company&#x2019;s major
shareholders in common shares have the same voting rights as other
holders of common shares. The Company is not directly or indirectly
owned or controlled by another corporation, a foreign government or
any other natural or legal persons severally or jointly. There are
no arrangements known to the Company which may result in a change
of control of the Company.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 10">&#xA0;</font>
<font style="font-family: Times New Roman; font-size: 13px"><br>
</font></div>
<div id="pgbrk" style="width: 100%; margin-left: 0px; text-indent: 0px; margin-right: 0px">
<div id="ftr">
<div style="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div id="pn" style="text-align: center"><font style="font-family: Times New Roman; font-size: 13px">48</font></div>
</div>
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<div id="hdr">
<div style="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="margin-left: 24px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 48px">
<font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">B.</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">Related
party transactions.</font></div>
</div>
</div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Summarized
below are certain other transactions and business relationships
between NXT and persons who are related parties, for the current
fiscal year ended December 31, 2019 through the current date, May
5, 2020:</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="margin-left: 24px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">Details of stock
options which have been granted to related parties during the above
noted period are included with Item 6.E above. No stock options
have been exercised by related parties in this period.</font></div>
</div>
</div>
<div style="margin-left: 24px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">One of the members
of NXT&#x2019;s Board of directors, Mr. Thomas Valentine is a
partner in the law firm Norton Rose Fulbright, which provides legal
advice to NXT. In 2019, NXT incurred legal expenses of $276,261
with this firm, for which a total of $146,197 is included in
accounts payable as at December 31, 2019. Norton Rose Fulbright
continues to provide legal services to NXT. In 2020 as of the
report date, total fees incurred are $87,513 for which $104,694 is
still outstanding.</font></div>
</div>
</div>
<div style="margin-left: 24px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">There were no stock
options to acquire common shares of the Company exercised in 2019
by persons who were directors or officers of NXT as at the date of
their exercise.</font></div>
</div>
</div>
<div style="margin-left: 24px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px;">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">In the fourth
quarter of 2019 the Company completed the $1,250,000 targeted
issuer bid, purchasing for cancellation 4,166,667 common
shares.</font></div>
</div>
</div>
<div style="margin-left: 24px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px;">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">In February 2019,
NXT entered into a Co-operative Agreement with AGV, for AGV to
bring to proposal up to three SFD<font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font></font></font></font>
surveys for cooperation with the Company within two years. The
Co-operative Agreement is based on a cost-plus formula and a gross
overriding royalty interest in oil and gas production arising on
lands subject to the surveys. The Company received a US$100,000
non-refundable deposit paid in connection with the Co-operative
Agreement in the second quarter of 2019. Pursuant to the
Co-operation Agreement, the deadline to complete at least one of
three SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font></font></font>
surveys is June 30, 2020.</font></div>
</div>
</div>
<div style="margin-left: 24px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px;">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">In September 2019,
the Company advanced US$250,000 (the "Principal Amount") to AGV for
the purpose of furthering the shared objectives of NXT and AGV
under the Co-operation Agreement. On April 13, 2020, NXT elected to
receive and directed AGV to deliver US$250,000 as repayment of the
Principal Amount (the "Principal Repayment).</font></div>
</div>
</div>
<div style="margin-left: 24px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">Common share
purchase warrants held by AGV have expired as of October 31,
2019.</font></div>
</div>
</div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="margin-left: 24px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 48px">
<font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">C.</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">Interests
of experts and counsel.</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Not
applicable.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="display: table; margin-left: 48px">
<div style="display: table-row">
<div style="display: table-cell; width: 96px"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px"><a name="_Toc449704253"><!--anchor--></a>ITEM
8.&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;<br></font></div>
<div style="text-align: justify; display: table-cell"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">FINANCIAL
INFORMATION</font></div>
</div>
</div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="margin-left: 24px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 48px">
<font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">A.</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">Consolidated
statements and other financial information.</font></div>
</div>
</div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">The
Company&#x2019;s consolidated financial statements are stated in
Canadian dollars and are prepared in accordance with U.S. generally
accepted accounting principles.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">The
financial statements and notes thereto as required under Item 8 are
attached as Exhibit 15.1 to this annual report and are incorporated
by reference herein. The audit report of KPMG LLP is included
therein immediately preceding the consolidated financial statements
and is also incorporated by reference herein.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">No
significant events or changes have occurred subsequent to the date
of the December 31, 2019 consolidated financial statements, except
as otherwise disclosed therein.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">
Legal Proceedings</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">To the
best of the Company's knowledge, there are no legal or arbitration
proceedings existing or pending which have had or may have,
significant effects on the Company's financial position or
profitability and no such proceedings are pending or known to be
contemplated by governmental authorities.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div id="pgbrk" style="width: 100%; margin-left: 0px; text-indent: 0px; margin-right: 0px">
<div id="ftr">
<div style="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div id="pn" style="text-align: center"><font style="font-family: Times New Roman; font-size: 13px">49</font></div>
</div>
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<!--page break--></div>
<div id="hdr">
<div style="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">
Dividend Policy</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">The
Company does not pay dividends.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="margin-left: 24px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 48px">
<font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">B.</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">Significant
Changes.</font></div>
</div>
</div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">As of
May 5, 2020, there have not been any significant subsequent events
which have occurred subsequent to the date of consolidated
financial statements for the year ended December 31, 2019.
NXT&#x2019;s interim, unaudited consolidated financial statements
for the 3-month period ended March 31, 2020 will be released in
mid-May, 2019.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="display: table; margin-left: 48px">
<div style="display: table-row">
<div style="display: table-cell; width: 96px"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px"><a name="_Toc449704254"><!--anchor--></a>ITEM
9.&#xA0;<br></font></div>
<div style="text-align: justify; display: table-cell"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">THE
OFFER AND LISTING</font></div>
</div>
</div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="display: table">
<div style="display: table-row">
<div style="display: table-cell; width: 48px"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px"><font style="color: #000000">
A.</font>&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;</font></div>
<div style="text-align: justify; display: table-cell"><font style="color: #000000; font-weight: bold; font-family: Times New Roman; font-size: 13px">
Offer and listing details.</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="color: #000000; font-family: Times New Roman; font-size: 13px">
Our common shares are currently quoted in the U.S. on the OTC
Markets QB Exchange under the symbol &#x201C;NSFDF&#x201D;, in Canada
on the TSX under the symbol &#x201C;SFD&#x201D;. There have been no
trading suspensions over the last three years.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="display: table">
<div style="display: table-row">
<div style="display: table-cell; width: 48px"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px"><font style="color: #000000">
B.</font>&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;</font></div>
<div style="text-align: justify; display: table-cell"><font style="color: #000000; font-weight: bold; font-family: Times New Roman; font-size: 13px">
Plan of distribution.</font></div>
</div>
</div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 72px; text-indent: 0px">
<font style="color: #000000; font-family: Times New Roman; font-size: 13px">Not
applicable.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="display: table">
<div style="display: table-row">
<div style="display: table-cell; width: 48px"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px"><font style="color: #000000">
C.</font>&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;</font></div>
<div style="text-align: justify; display: table-cell"><font style="color: #000000; font-weight: bold; font-family: Times New Roman; font-size: 13px">
Markets.</font></div>
</div>
</div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px"><font style="color: #000000">
Our common shares are currently quoted in the U.S. on the OTC
Markets QB Exchange under the symbol &#x201C;NSFDF&#x201D;, in Canada
on the TSX-V under the symbol &#x201C;SFD.V&#x201D; (to March 21,
2016) and on the TSX under the symbol &#x201C;SFD&#x201D; effective
from March 22, 2016, and in Europe on the</font> Frankfurt and
Berlin Exchanges (both of these listings are inactive) under the
symbol &#x201C;EFW&#x201D;.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">The
Company&#x2019;s common shares commenced trading on the US
Over-The-Counter Bulletin Board pursuant to a reverse takeover
transaction in 1996, and were approved for listing on the Frankfurt
and Berlin Exchanges in January 2004, and on the TSX-V in December
2007. Effective March 22, 2016, NXT upgraded its Canadian listing
from the TSX-V to the TSX.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="display: table">
<div style="display: table-row">
<div style="display: table-cell; width: 48px"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px"><font style="color: #000000">
D.</font>&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;</font></div>
<div style="text-align: justify; display: table-cell"><font style="color: #000000; font-weight: bold; font-family: Times New Roman; font-size: 13px">
Selling shareholders.</font></div>
</div>
</div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 72px; text-indent: 0px">
<font style="color: #000000; font-family: Times New Roman; font-size: 13px">Not
applicable.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="display: table">
<div style="display: table-row">
<div style="display: table-cell; width: 48px"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px"><font style="color: #000000">
E.</font>&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;</font></div>
<div style="text-align: justify; display: table-cell"><font style="color: #000000; font-weight: bold; font-family: Times New Roman; font-size: 13px">
Dilution.</font></div>
</div>
</div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 72px; text-indent: 0px">
<font style="color: #000000; font-family: Times New Roman; font-size: 13px">Not
applicable.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="display: table">
<div style="display: table-row">
<div style="display: table-cell; width: 48px"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px"><font style="color: #000000">
F.</font>&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;</font></div>
<div style="text-align: justify; display: table-cell"><font style="color: #000000; font-weight: bold; font-family: Times New Roman; font-size: 13px">
Expenses of the issue.</font></div>
</div>
</div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 72px; text-indent: 0px">
<font style="color: #000000; font-family: Times New Roman; font-size: 13px">Not
applicable.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="display: table; margin-left: 48px">
<div style="display: table-row">
<div style="display: table-cell; width: 84px"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px"><a name="_Toc449704255"><!--anchor--></a>ITEM 10.&#xA0;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">ADDITIONAL
INFORMATION</font></div>
</div>
</div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="display: table">
<div style="display: table-row">
<div style="display: table-cell; width: 48px"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">A.&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">Share
capital.</font></div>
</div>
</div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 72px; text-indent: 0px">
<font style="color: #000000; font-family: Times New Roman; font-size: 13px">Not
applicable.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div id="pgbrk" style="width: 100%; margin-left: 0px; text-indent: 0px; margin-right: 0px">
<div id="ftr">
<div style="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div id="pn" style="text-align: center"><font style="font-family: Times New Roman; font-size: 13px">50</font></div>
</div>
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<div id="hdr">
<div style="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="display: table">
<div style="display: table-row">
<div style="display: table-cell; width: 48px"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">B.&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">Memorandum
and articles of association.</font></div>
</div>
</div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">NXT was
incorporated in the State of Nevada in 1994. With respect to the
foregoing items, the law applicable to NXT in the Province of
Alberta is not significantly different from that in the State of
Nevada. NXT was established in Alberta pursuant to a Certificate of
Continuance issued October 24, 2003 by the Registrar of
Corporations of the Province of Alberta. NXT&#x2019;s Alberta
Corporate Access Number is 2010730915. The Articles of Continuance
of NXT were amended to create the Series 1 Preferred Shares on
December 28, 2006, and provide that there are no restrictions on
the nature of the business that may be carried on by NXT. On
September 19, 2008, pursuant to Articles of Amendment, the name of
the Company was changed from Energy Exploration Technologies Inc.
to NXT Energy Solutions Inc.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="text-decoration: underline; font-family: Times New Roman; font-size: 13px">
Quorum</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">The
Board of directors of NXT may fix the quorum for meetings of the
Board or of a committee of the Board, but unless so fixed, a
majority of the directors or of a committee of directors holding
office at the time of the meeting constitutes a quorum provided
that no business may be transacted unless at least half of the
directors present are resident Canadians. Business cannot be
transacted without a quorum. A quorum of directors may vote on any
matter of business properly brought before the meeting provided
that where a director is a party to a material contract or proposed
material contract or is a director or an officer of or has a
material interest in any person who is a party to a material
contract or proposed material contract with NXT, such director must
disclose his or her interest at the earliest possible date, request
the conflict be noted in the minutes of the meeting and with few
exceptions, refrain from voting on the matter in which the director
has a conflict of interest. There is no limitation on the Board of
directors to vote on matters of their remuneration as a director,
officer, employee or agent of NXT or of an affiliate of
NXT.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="text-decoration: underline; font-family: Times New Roman; font-size: 13px">
Borrowing Powers</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">The
Board of directors may, without authorization of the shareholders
of NXT:</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px;">&#xA0;</font></div>
<div style="margin-left: 48px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 48px">
<font style="font-family: Times New Roman; font-size: 13px">(a)</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">borrow money on the
credit of NXT;</font></div>
</div>
</div>
<div style="margin-left: 48px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 48px">
<font style="font-family: Times New Roman; font-size: 13px">(b)</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">issue, reissue,
sell or pledge debt obligations of NXT;</font></div>
</div>
</div>
<div style="margin-left: 48px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 48px">
<font style="font-family: Times New Roman; font-size: 13px">(c)</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">subject to
restrictions respecting financial assistance prescribed in the
ABCA, guarantee, on behalf of NXT, the performance of an obligation
of any person; and</font></div>
</div>
</div>
<div style="margin-left: 48px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 48px">
<font style="font-family: Times New Roman; font-size: 13px">(d)</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">mortgage,
hypothecate, pledge or otherwise create a security interest in all
or any property of NXT, owned or subsequently acquired, to secure
any obligation of NXT.</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">The
Board of directors of NXT may, by resolution, delegate to a
director, a committee of directors or an officer all or any of the
foregoing borrowing powers.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="text-decoration: underline; font-family: Times New Roman; font-size: 13px">
Directors</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">A
person is qualified to be or stand for election as a director
provided such person is at least 18 years of age, is not bankrupt
and is not mentally incapacitated pursuant to applicable mental
health legislation of the Province of Alberta or pursuant to an
order of the courts of the Province of Alberta. There is no
provision in NXT&#x2019;s Articles or By-Laws relating to the
retirement or non-retirement of directors under an age limit
requirement. There is also no requirement in NXT&#x2019;s Articles
or By-Laws for a director to hold securities of NXT.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Pursuant
to the ABCA, a director or officer shall not be disqualified by his
office, or be required to vacate his office, by reason only that he
is a party to, or is a director or officer or has a material
interest in any person who is a party to, a material contract or
proposed material contract with NXT or subsidiary thereof. Such a
director or officer shall, however, disclose the nature and extent
of his interest in the contract at the time and in the manner
provided by the ABCA. Any such contract or proposed contract shall
be referred to the Board of directors of NXT or shareholders for
approval even if such contract is one that in the ordinary course
of NXT's business would not require approval by the Board or
shareholders. Subject to the provisions of the ABCA, a director
shall not by reason only of his office be accountable to NXT or to
its shareholders for any profit or gain realized from such a
contract or transaction, and such contract or transaction shall not
be void or voidable by reason only of the director's interest
therein, provided that the required declaration and disclosure of
interest is properly made, the contract or transaction is approved
by the directors or shareholders, and it is fair and reasonable to
NXT at the time it was approved and, if required by the ABCA, the
director refrains from voting as a director on the contract or
transaction and absents himself from the director's meeting at
which the contract is authorized or approved by the directors,
except attendance for the purpose of being counted in the
quorum.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div id="pgbrk" style="width: 100%; margin-left: 0px; text-indent: 0px; margin-right: 0px">
<div id="ftr">
<div style="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div id="pn" style="text-align: center"><font style="font-family: Times New Roman; font-size: 13px">51</font></div>
</div>
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<div id="hdr">
<div style="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="text-decoration: underline; font-family: Times New Roman; font-size: 13px">
Rights Attached to Common Shares</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">The
holders of the common shares are entitled to dividends as and when
declared by the directors of NXT, to one vote per share at meetings
of shareholders of NXT, and upon liquidation, subject to the rights
of the holders of preferred shares, are entitled to share rateably
with the holders of the common shares in all distributions of
assets of NXT.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="text-decoration: underline; font-family: Times New Roman; font-size: 13px">
Rights Attached to Preferred Shares</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Preferred
shares may be issued from time to time in one or more series. The
Board of directors of NXT is expressly authorized to provide by
resolution duly adopted prior to issuance, for the creation of each
such series and to fix the designation, rights, privileges,
restrictions and conditions attached to the shares of each such
series, including the rate or amount of dividends or the method of
calculating dividends, the dates of payment of dividends, the
redemption, purchase and/or conversion prices and terms and
conditions of redemption, purchase and/or conversion, and any
sinking fund or other provisions.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">The
preferred shares of each series shall, with respect to the payment
of dividends and the distribution of assets or return of capital in
the event of liquidation, dissolution or winding-up of NXT, whether
voluntary or involuntary, or any other return of capital or
distribution of the assets of NXT among its shareholders for the
purpose of winding up its affairs, rank on a parity with the
preferred shares of every other series and be entitled to
preference over the common shares and over any other shares of NXT,
if any, ranking junior to the preferred shares. The preferred
shares of any series may also be given other preferences, not
inconsistent with the articles of continuance of NXT (the
"Articles"), over the common shares and any other shares of NXT
ranking junior to the preferred shares of a series as may be fixed
by the Board of directors of NXT.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">If any
cumulative dividends or amounts payable on the return of capital in
respect of a series of preferred shares are not paid in full, all
series of preferred shares shall participate rateably in respect of
accumulated dividends and return of capital.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Unless
the Board of directors of NXT otherwise determine in the articles
of amendment designating a series of preferred shares, the holder
of each share of a series of preferred shares shall not, as such,
be entitled to receive notice of or vote at any meeting of
shareholders, except as otherwise specifically provided in the
ABCA.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="text-decoration: underline; font-family: Times New Roman; font-size: 13px">
Alteration of the Rights of Shareholders</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Under
the ABCA, any substantive change to the Articles (including, but
not limited to, change of any maximum number of shares that NXT is
authorized to issue, creation of new classes of shares, add, change
or remove any rights, privileges, restrictions and conditions in
respect of all or any of its shares, whether issued or unissued,
change the shares of any class or series, whether issued or
unissued, into a different number of shares of the same class or
series or into the same or a different number of shares of other
classes or series) or other fundamental changes to the capital
structure of NXT, including a proposed amalgamation or continuance
of NXT out of the jurisdiction, requires shareholder approval by
not less than 2/3 of the votes cast by shareholders voting in
person or by proxy at a shareholders&#x2019; meeting called for that
purpose. In certain prescribed circumstances, holders of shares of
a class or of a series are entitled to vote separately as a class
or series on a proposal to amend the Articles whether or not shares
of a class or series otherwise carry the right to vote. The holders
of a series of shares of a class are entitled to vote separately as
a series only if the series is affected by an amendment in a manner
different from other shares of the same class.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="text-decoration: underline; font-family: Times New Roman; font-size: 13px">
Meetings of Shareholders</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">NXT&#x2019;s
By-Laws provide that the Board of directors shall call an annual
meeting of shareholders to be held not later than fifteen months
after holding the last preceding annual meeting. NXT&#x2019;s
By-Laws provide that the Board of directors may at any time call a
special meeting of shareholders. Only the registered holders of
shares are entitled to receive notice of and vote at annual and
special meetings of shareholders, except to the extent
that:</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="margin-left: 48px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 48px">
<font style="font-family: Times New Roman; font-size: 13px">(a)</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">if a record date is
fixed, the person transfers ownership of any of the person&#x2019;s
shares after the record date; or</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="margin-left: 48px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 48px">
<font style="font-family: Times New Roman; font-size: 13px">(b)</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">if no record date
is fixed, the person transfers ownership of any of the
person&#x2019;s shares after the date on which the list of
shareholders is prepared; and</font></div>
</div>
</div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="margin-left: 48px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 48px">
<font style="font-family: Times New Roman; font-size: 13px">(c)</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">the transferee of
those shares;</font></div>
</div>
</div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="margin-left: 120px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">produces properly
endorsed share certificates; or</font></div>
</div>
</div>
<div style="margin-left: 120px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">otherwise
establishes ownership of the shares; and</font></div>
</div>
</div>
<div style="margin-left: 120px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">demands, not later
than ten (10) days before the meeting, that the transferee&#x2019;s
name be included in the list before the meeting; and</font></div>
</div>
</div>
<div style="margin-left: 120px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">in which case the
transferee is entitled to vote the shares.</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div id="pgbrk" style="width: 100%; margin-left: 0px; text-indent: 0px; margin-right: 0px">
<div id="ftr">
<div style="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div id="pn" style="text-align: center"><font style="font-family: Times New Roman; font-size: 13px">52</font></div>
</div>
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<div id="hdr">
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<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</div>
</div>
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<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">The
ABCA also permits the holders of not less than 5% of the issued
voting securities of NXT to give notice to the Board of directors
requiring them to call and hold a meeting of NXT.</font></div>
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<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">The
only persons entitled to be present at a meeting of shareholders
are:</font></div>
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<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
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<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 48px">
<font style="font-family: Times New Roman; font-size: 13px">(a)</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">the shareholders
entitled to vote at the meeting;</font></div>
</div>
</div>
<div style="margin-left: 48px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 48px">
<font style="font-family: Times New Roman; font-size: 13px">(b)</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">the Board of
directors of NXT;</font></div>
</div>
</div>
<div style="margin-left: 48px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 48px">
<font style="font-family: Times New Roman; font-size: 13px">(c)</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">the external
auditor of NXT; and</font></div>
</div>
</div>
<div style="margin-left: 48px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 48px">
<font style="font-family: Times New Roman; font-size: 13px">(d)</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">any others who,
although not entitled or required under the provisions of the ABCA,
any unanimous shareholder agreement, or the Articles or the
By-Laws, are allowed to be present at the meeting.</font></div>
</div>
</div>
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<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Any
other person may be admitted only on the invitation of the
Chairperson of the meeting or with the consent of the
meeting.</font></div>
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<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">There
are no restrictions in NXT&#x2019;s Articles or By-Laws as to the
number of shares that may be held by non-residents other than
restrictions set out in the <font style="font-style: italic">Investment Canada Act</font> (the
&#x201C;ICA&#x201D;) (Canada), as further described under Item 10.D
&#x2013; &#x201C;Exchange Controls&#x201D; below.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="text-decoration: underline; font-family: Times New Roman; font-size: 13px">
Change of Control</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">There
are no specific provisions in the Articles or By-Laws of NXT that
have the effect of delaying, deferring or preventing a change of
control of NXT and that would operate only with respect to a
merger, acquisition or corporate restructuring involving NXT (or
any of its subsidiaries). Notwithstanding this, the Board of
directors, under the general powers conferred to it under
NXT&#x2019;s By-Laws, have the authority to approve and invoke a
shareholders rights plan that will protect shareholders from
unfair, abusive or coercive take-over strategies, including the
acquisition or control of NXT by a bidder in a transaction or
series of transactions that does not treat all shareholders equally
or fairly or that does not afford all shareholders an equal
opportunity to share in any premium paid upon an acquisition of
control. NXT has not adopted such a plan.</font></div>
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<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="text-decoration: underline; font-family: Times New Roman; font-size: 13px">
Shareholder Ownership Disclosure</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">There
are no provisions in NXT&#x2019;s By-Laws regarding public
disclosure of individual shareholdings.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="display: table">
<div style="display: table-row">
<div style="display: table-cell; width: 48px"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">C.&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">Material
contracts.</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Each
material contract, other than contracts entered into in the
ordinary course of business, to which the Company has been a party,
for the two years immediately preceding publication of this annual
report, is summarized elsewhere herein. Please see Item 4. B for
description of the AGV Co-operative Agreement, the AGV Notes
Receivable, the Targeted Issuer Bid, and the Nigerian
SFD<font style="font-family: Times New Roman; font-size: 13px"><font style="color: #262626"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-family: Times New Roman; font-size: 13px"><font style="font-size: 70%; vertical-align: top">&#xAE;</font></font></font></font></font></font>
survey with PE Energy. Also see Item 3. D for a description of the
Sales Leaseback contract.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="display: table">
<div style="display: table-row">
<div style="display: table-cell; width: 48px"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">D.&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">Exchange
controls.</font></div>
</div>
</div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">There
are no governmental laws, decrees or regulations in Canada relating
to restrictions on the export or import of capital, or affecting
the remittance of interest, dividends or other payments to
non-residents. Dividends paid to U.S. residents, however, are
subject to a 15% withholding tax or a 5% withholding tax for
dividends if the shareholder is a corporation owning at least 10%
of the outstanding voting shares of NXT pursuant to Article X of
the reciprocal tax treaty between Canada and the U.S.</font></div>
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<div id="pn" style="text-align: center"><font style="font-family: Times New Roman; font-size: 13px">53</font></div>
</div>
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<div id="hdr">
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<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Except
as provided in the ICA, which has provisions that restrict the
holding of voting shares by non-Canadians, there are no limitations
specific to the rights of non-Canadians to hold or vote the common
shares under the laws of Canada or the Province of Alberta, or in
the charter documents of NXT or its subsidiaries.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Management
of NXT believes that the following summary fairly describes those
provisions of the ICA pertinent to an investment in NXT by a person
who is not a Canadian resident (a
&#x201C;non-Canadian&#x201D;).</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">The ICA
requires a non-Canadian making an investment which would result in
the acquisition of control of a Canadian business (i.e. the gross
value of the assets of which exceed a certain monetary threshold)
to identify, notify, or file an application for review with the
Investment Review Division of Industry Canada
(&#x201C;IRD&#x201D;).</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">The
notification procedure involves a brief statement of information
about the investment on a prescribed form which is required to be
filed with the IRD by the investor at any time up to 30 days
following implementation of the investment. It is intended that
investments requiring only notification will proceed without
government intervention unless the investment is in a specific type
of business activity related to Canada&#x2019;s cultural heritage
and national identity.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">If an
investment is reviewable under the ICA, an application for review
in the form prescribed is normally required to be filed with the
IRD prior to the investment taking place and the investment may not
be implemented until the review has been completed and the Minister
of Industry Canada (the &#x201C;Minister&#x201D;) (the Minister
responsible for Investment Canada) is satisfied that the investment
is likely to be of net benefit to Canada. The Minister has up to 75
days to make this determination. If the Minister is not satisfied
that the investment is likely to be of net benefit to Canada, the
non-Canadian must not implement the investment or, if the
investment has been implemented, may be required to divest himself
of control of the business that is the subject of the
investment.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">The
following investments by non-Canadians are subject to notification
under the ICA:</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="margin-left: 24px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 48px">
<font style="font-family: Times New Roman; font-size: 13px">1.</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">An investment to
establish a new Canadian business; and</font></div>
</div>
</div>
<div style="margin-left: 24px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 48px">
<font style="font-family: Times New Roman; font-size: 13px">2.</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">An investment to
acquire control of a Canadian business that is not reviewable
pursuant to the Act.</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">The
following investments by a non-Canadian are subject to review under
the ICA:</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="margin-left: 0px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-family: Times New Roman; font-size: 13px">1.</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">An investment is
reviewable if there is an acquisition of a Canadian business and
the asset value of the Canadian business being acquired equals or
exceeds the following thresholds:</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="margin-left: 48px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-family: Times New Roman; font-size: 13px">(a)</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">For non-World Trade
Organization (&#x201C;WTO&#x201D;) investors, the threshold is $5
million for a direct acquisition and $50 million for an indirect
acquisition; the $5 million threshold will apply however for an
indirect acquisition if the asset value of the Canadian business
being acquired exceeds 50% of the asset value of the global
transaction;</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="margin-left: 48px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-family: Times New Roman; font-size: 13px">(b)</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">Except as specified
in paragraph (c) below, a threshold is calculated annually for
reviewable direct acquisitions by or from WTO investors. The
threshold for 2012 was $330 million. Pursuant to Canada&#x2019;s
international commitments, indirect acquisitions by or from WTO
investors are not reviewable;</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="margin-left: 48px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-family: Times New Roman; font-size: 13px">(c)</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">The limits set out
in paragraph (a) apply to all investors for acquisitions of a
Canadian business that:</font></div>
</div>
</div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="margin-left: 96px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-family: Times New Roman; font-size: 13px">(i)</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">engages in the
production of uranium and owns an interest in a producing uranium
property in Canada;</font></div>
</div>
</div>
<div style="margin-left: 96px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-family: Times New Roman; font-size: 13px">(ii)</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">provides any
financial service;</font></div>
</div>
</div>
<div style="margin-left: 96px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-family: Times New Roman; font-size: 13px">(iii)</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">provides any
transportation services; or</font></div>
</div>
</div>
<div style="margin-left: 96px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-family: Times New Roman; font-size: 13px">(iv)</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">is a cultural
business.</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Notwithstanding
the above, any investment which is usually only notifiable,
including the establishment of a new Canadian business, and which
falls within a specific business activity, including the
publication and distribution of books, magazines, newspapers, film
or video recordings, audio or video music recordings, or music in
print or machine-readable form may be reviewed if an
Order-in-Council directing a review is made and a notice is sent to
the investor within 21 days following the receipt of a certified
complete notification.</font></div>
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<div style="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div id="pn" style="text-align: center"><font style="font-family: Times New Roman; font-size: 13px">54</font></div>
</div>
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<div style="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Generally
speaking, an acquisition is direct if it involves the acquisition
of control of the Canadian business or of its direct or indirect
Canadian parent and an acquisition is indirect if it involves the
acquisition of control of a non-Canadian direct or indirect parent
of an entity carrying on the Canadian business. No change of voting
control will be deemed to have occurred if less than one-third of
the voting control of a Canadian corporation is acquired by an
investor.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">A WTO
investor, as defined in the ICA, includes an individual who is a
national of a member country of the WTO or who has the right of
permanent residence in relation to that WTO member, a government or
government agency of a WTO investor-controlled corporation, a
limited partnership, trust or joint venture that is neither
WTO-investor controlled or Canadian controlled of which two-thirds
of its Board of directors, general partners or trustees, as the
case may be, are any combination of Canadians and WTO
investors.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">The ICA
exempts certain transactions from the notification and review
provisions of ICA, including, among others, (a) an acquisition of
voting shares if the acquisition were made in the ordinary course
of that person&#x2019;s business as a trader or dealer in
securities; (b) an acquisition of control of the Company in
connection with the realization of a security interest granted for
a loan or other financial assistance and not for any purpose
related to the provisions of the ICA; (c) the acquisition of voting
interests by any person in the ordinary course of a business
carried on by that person that consists of providing, in Canada,
venture capital on terms and conditions not inconsistent with such
terms and conditions as may be fixed by the Minister; and (d)
acquisition of control of the Company by reason of an amalgamation,
merger, consolidation or corporate reorganization, following which
the ultimate direct or indirect control in fact of the Company,
through the ownership of voting interests, remains
unchanged.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="display: table">
<div style="display: table-row">
<div style="display: table-cell; width: 48px"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">E.&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">Taxation.</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="text-decoration: underline; color: #000000; font-family: Times New Roman; font-size: 13px">
Certain United States Federal Income Tax
Considerations</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">The
following is a general summary of certain material U.S. federal
income tax considerations applicable to a U.S. Holder (as defined
below) arising from and relating to the acquisition, ownership and
disposition of common shares of the Company.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">This
summary is for general information purposes only and does not
purport to be a complete analysis or listing of all potential U.S.
federal income tax considerations that may apply to a U.S. Holder
arising from and relating to the acquisition, ownership and
disposition of common shares. In addition, this summary does not
take into account the individual facts and circumstances of any
particular U.S. Holder that may affect the U.S. federal income tax
consequences to such U.S. Holder, including, without limitation,
specific tax consequences to a U.S. Holder under an applicable
income tax treaty. Accordingly, this summary is not intended to be,
and should not be construed as, legal or U.S. federal income tax
advice with respect to any U.S. Holder. This summary does not
address the U.S. federal net investment income, U.S. federal
alternative minimum, U.S. federal estate and gift, U.S. state and
local, and non-U.S. tax consequences to U.S. Holders of the
acquisition, ownership and disposition of common shares. In
addition, except as specifically set forth below, this summary does
not discuss applicable tax reporting requirements. Each prospective
U.S. Holder should consult its own tax advisors regarding the U.S.
federal, U.S. federal net investment income, U.S. federal
alternative minimum, U.S. federal estate and gift, U.S. state and
local, and non-U.S. tax consequences relating to the acquisition,
ownership and disposition of common shares.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">No
legal opinion from U.S. legal counsel or ruling from the Internal
Revenue Service (the &#x201C;IRS&#x201D;) has been requested, or will
be obtained, regarding the U.S. federal income tax consequences of
the acquisition, ownership, and disposition of common shares. This
summary is not binding on the IRS and the IRS is not precluded from
taking a position that is different from, and contrary to, the
positions taken in this summary. In addition, because the
authorities on which this summary is based are subject to various
interpretations, the IRS and the U.S. courts could disagree with
one or more of the conclusions described in this
summary.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
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<div id="ftr">
<div style="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div id="pn" style="text-align: center"><font style="font-family: Times New Roman; font-size: 13px">55</font></div>
</div>
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<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-weight: bold; color: #000000; font-family: Times New Roman; font-size: 13px">
Scope of this Summary</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="text-decoration: underline; color: #000000; font-family: Times New Roman; font-size: 13px">
Authorities</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">This
summary is based on the Internal Revenue Code of 1986, as amended
(the &#x201C;Code&#x201D;), Treasury Regulations (whether final,
temporary, or proposed), published rulings of the IRS, published
administrative positions of the IRS, the Convention Between Canada
and the United States of America with Respect to Taxes on Income
and Capital, signed September 26, 1980, as amended (the
&#x201C;Canada-U.S. Tax Convention&#x201D;), and U.S. court decisions
that are applicable, and, in each case, as in effect and available,
as of the date of this document. Any of the authorities on which
this summary is based could be changed in a material and adverse
manner at any time, and any such change could be applied
retroactively. This summary does not discuss the potential effects,
whether adverse or beneficial, of any proposed
legislation.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="text-decoration: underline; color: #000000; font-family: Times New Roman; font-size: 13px">
U.S. Holders</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">For
purposes of this summary, the term "U.S. Holder" means a beneficial
owner of common shares that is for U.S. federal income tax
purposes:</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="margin-left: 24px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-weight: bold; font-style: italic; font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">an individual who
is a citizen or resident of the United States;</font></div>
</div>
</div>
<div style="margin-left: 24px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-weight: bold; font-style: italic; font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">a corporation (or
other entity treated as a corporation for U.S. federal income tax
purposes) organized under the laws of the United States, any state
thereof or the District of Columbia;</font></div>
</div>
</div>
<div style="margin-left: 24px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-weight: bold; font-style: italic; font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">an estate whose
income is subject to U.S. federal income taxation regardless of its
source; or</font></div>
</div>
</div>
<div style="margin-left: 24px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-weight: bold; font-style: italic; font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">a trust that (1) is
subject to the primary supervision of a court within the U.S. and
the control of one or more U.S. persons for all substantial
decisions or (2) has a valid election in effect under applicable
Treasury Regulations to be treated as a U.S. person.</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="text-decoration: underline; color: #000000; font-family: Times New Roman; font-size: 13px">
</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px;">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="text-decoration: underline; color: #000000; font-family: Times New Roman; font-size: 13px">
U.S. Holders Subject to Special U.S. Federal Income Tax Rules Not
Addressed</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">This
summary does not address the U.S. federal income tax considerations
applicable to U.S. Holders that are subject to special provisions
under the Code, including, but not limited to, U.S. Holders that:
(a) are tax-exempt organizations, qualified retirement plans,
individual retirement accounts, or other tax-deferred accounts; (b)
are financial institutions, underwriters, insurance companies, real
estate investment trusts, or regulated investment companies; (c)
are broker-dealers, dealers, or traders in securities or currencies
that elect to apply a mark-to-market accounting method; (d) have a
&#x201C;functional currency&#x201D; other than the U.S. dollar; (e)
own common shares as part of a straddle, hedging transaction,
conversion transaction, constructive sale, or other integrated
transaction; (f) acquire common shares in connection with the
exercise of employee stock options or otherwise as compensation for
services; (g) hold common shares other than as a capital asset
within the meaning of Section 1221 of the Code (generally, property
held for investment purposes); (h) are subject to special
accounting rules; or (i) own, have owned or will own (directly,
indirectly, or by attribution) 10% or more of the total combined
voting power or value of the outstanding shares of the Company.
This summary also does not address the U.S. federal income tax
considerations applicable to U.S. Holders who are: (a) U.S.
expatriates or former long-term residents of the U.S.; (b) persons
that have been, are, or will be a resident or deemed to be a
resident in Canada for purposes of the Income Tax Act (Canada) (the
&#x201C;Tax Act&#x201D;); (c) persons that use or hold, will use or
hold, or that are or will be deemed to use or hold common shares in
connection with carrying on a business in Canada; (d) persons whose
common shares constitute &#x201C;taxable Canadian property&#x201D;
under the Tax Act; or (e) persons that have a permanent
establishment in Canada for the purposes of the Canada-U.S. Tax
Convention. U.S. Holders that are subject to special provisions
under the Code, including, but not limited to, U.S. Holders
described immediately above, should consult their own tax advisors
regarding the U.S. federal, U.S. federal net investment income,
U.S. federal alternative minimum, U.S. federal estate and gift,
U.S. state and local, and non-U.S. tax consequences relating to the
acquisition, ownership and disposition of common
shares.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">If an
entity or arrangement that is classified as a partnership (or other
&#x201C;pass-through&#x201D; entity) for U.S. federal income tax
purposes holds common shares, the U.S. federal income tax
consequences to such entity or arrangement and the partners (or
other owners or participants) of such entity or arrangement
generally will depend on the activities of the entity or
arrangement and the status of such partners (or owners or
participants). This summary does not address the tax consequences
to any such partner (or owner or participants). Partners (or other
owners or participants) of entities or arrangements that are
classified as partnerships or as &#x201C;pass-through&#x201D;
entities for U.S. federal income tax purposes should consult their
own tax advisors regarding the U.S. federal income tax consequences
arising from and relating to the acquisition, ownership and
disposition of common shares.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div id="pgbrk" style="width: 100%; margin-left: 0px; text-indent: 0px; margin-right: 0px">
<div id="ftr">
<div style="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div id="pn" style="text-align: center"><font style="font-family: Times New Roman; font-size: 13px">56</font></div>
</div>
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<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-weight: bold; color: #000000; font-family: Times New Roman; font-size: 13px">
Passive Foreign Investment Company Rules</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="color: rgb(0, 0, 0); font-family: Times New Roman; font-size: 13px;">
If the Company were to constitute a PFIC for any year during a U.S.
Holder&#x2019;s holding period, then certain potentially adverse
rules would affect the U.S. federal income tax consequences to a
U.S. Holder resulting from the acquisition, ownership and
disposition of shares. The Company believes that it was not a PFIC
for the tax year ended December 31, 2019. No opinion of legal
counsel or ruling from the IRS concerning the status of the Company
as a PFIC has been obtained or is currently planned to be
requested. However, PFIC classification is fundamentally factual in
nature, generally cannot be determined until the close of the tax
year in question and is determined annually. Additionally, the
analysis depends, in part, on the application of complex U.S.
federal income tax rules, which are subject to differing
interpretations. Consequently, there can be no assurance that the
Company has never been and will not become a PFIC for any tax year
during which U.S. Holders hold shares.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="color: rgb(0, 0, 0); font-family: Times New Roman; font-size: 13px;">
In addition, in any year in which the Company is classified as a
PFIC, a U.S. Holder will be required to file an annual report with
the IRS containing such information as Treasury Regulations and/or
other IRS guidance may require. A failure to satisfy such reporting
requirements may result in an extension of the time period during
which the IRS can assess a tax. U.S. Holders should consult their
own tax advisors regarding the requirements of filing such
information returns under these rules, including the requirement to
file an IRS Form 8621 annually.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="color: rgb(0, 0, 0); font-family: Times New Roman; font-size: 13px;">
The Company generally will be a PFIC under Section 1297 of the Code
if, after the application of certain &#x201C;look-through&#x201D;
rules with respect to subsidiaries in which the Company holds at
least 25% of the value of such subsidiary, for a tax year, (a) 75%
or more of the gross income of the Company for such tax year is
passive income (the &#x201C;income test&#x201D;) or (b) 50% or more
of the value of the Company&#x2019;s assets either produce passive
income or are held for the production of passive income (the
&#x201C;asset test&#x201D;), based on the quarterly average of the
fair market value of such assets. &#x201C;Gross income&#x201D;
generally includes all sales revenues less the cost of goods sold,
plus income from investments and incidental or outside operations
or sources, and &#x201C;passive income&#x201D; generally includes,
for example, dividends, interest, certain rents and royalties,
certain gains from the sale of stock and securities, and certain
gains from commodities transactions. Active business gains arising
from the sale of commodities generally are excluded from passive
income if substantially all of a foreign corporation&#x2019;s
commodities are stock in trade or inventory, depreciable property
used in a trade or business or supplies regularly used or consumed
in the ordinary course of its trade or business, and certain other
requirements are satisfied.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="color: rgb(0, 0, 0); font-family: Times New Roman; font-size: 13px;">
If the Company were a PFIC in any tax year during which a U.S.
Holder held shares, such holder generally would be subject to
special rules with respect to &#x201C;excess distributions&#x201D;
made by the Company on the shares and with respect to gain from the
disposition of shares. An &#x201C;excess distribution&#x201D;
generally is defined as the excess of distributions with respect to
the shares received by a U.S Holder in any tax year over 125% of
the average annual distributions such U.S. Holder has received from
the Company during the shorter of the three preceding tax years, or
such U.S. Holder&#x2019;s holding period for the shares. Generally,
a U.S. Holder would be required to allocate any excess distribution
or gain from the disposition of the shares ratably over its holding
period for the shares. Such amounts allocated to the year of the
disposition or excess distribution would be taxed as ordinary
income, and amounts allocated to prior tax years would be taxed as
ordinary income at the highest tax rate in effect for each such
year and an interest charge at a rate applicable to underpayments
of tax would apply.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="color: rgb(0, 0, 0); font-family: Times New Roman; font-size: 13px;">
While there are U.S. federal income tax elections that sometimes
can be made to mitigate these adverse tax consequences (including
the &#x201C;QEF Election&#x201D; under Section 1295 of the Code and
the &#x201C;Mark-to-Market Election&#x201D; under Section 1296 of the
Code), such elections are available in limited circumstances and
must be made in a timely manner.<br></font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px;">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="color: rgb(0, 0, 0); font-family: Times New Roman; font-size: 13px;">
U.S. Holders should be aware that, for each tax year, if any, that
the Company is a PFIC, the Company can provide no assurances that
it will satisfy the record-keeping requirements of a PFIC, or that
it will make available to U.S. Holders the information such U.S.
Holders require to make a QEF Election with respect to the Company
or any subsidiary that also is classified as a
PFIC.&#xA0;<br></font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px;">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px;"><font style="font-family: Times New Roman; font-size: 13px">
Certain additional adverse rules may apply with respect to a U.S.
Holder if the Company is a PFIC, regardless of whether the U.S.
Holder makes a QEF Election. These rules include special rules that
apply to the amount of foreign tax credit that a U.S. Holder may
claim on a distribution from a PFIC. Subject to these special
rules, foreign taxes paid with respect to any distribution in
respect of stock in a PFIC are generally eligible for the foreign
tax credit. U.S. Holders should consult their own tax advisors
regarding the potential application of the PFIC rules to the
ownership and disposition of shares, and the availability of
certain U.S. tax elections under the PFIC
rules.</font><br></font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
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<div id="ftr">
<div style="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div id="pn" style="text-align: center"><font style="font-family: Times New Roman; font-size: 13px">57</font></div>
</div>
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<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="text-decoration: underline; color: #000000; font-family: Times New Roman; font-size: 13px">
General Rules Applicable to the Ownership and Disposition of Common
Shares</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">The
following discussion describes the general rules applicable to the
ownership and disposition of the common shares but is subject in
its entirety to the special rules described above under the heading
&#x201C;Passive Foreign Investment Company
Rules.&#x201D;</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="text-decoration: underline; color: #000000; font-family: Times New Roman; font-size: 13px">
Distributions on Common Shares</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">A U.S.
Holder that receives a distribution, including a constructive
distribution, with respect to a common share will be required to
include the amount of such distribution in gross income as a
dividend (without reduction for any Canadian income tax withheld
from such distribution) to the extent of the current and
accumulated &#x201C;earnings and profits&#x201D; of the Company, as
computed for U.S. federal income tax purposes. A dividend generally
will be taxed to a U.S. Holder at ordinary income tax rates if the
Company is a PFIC for the tax year of such distribution or the
preceding tax year. To the extent that a distribution exceeds the
current and accumulated &#x201C;earnings and profits&#x201D; of the
Company, such distribution will be treated first as a tax-free
return of capital to the extent of a U.S. Holder's tax basis in the
common shares and thereafter as gain from the sale or exchange of
such common shares. (See &#x201C;Sale or Other Taxable Disposition
of Common Shares&#x201D; below). However, the Company may not
maintain the calculations of its earnings and profits in accordance
with U.S. federal income tax principles, and each U.S. Holder may
have to assume that any distribution by the Company with respect to
the common shares will constitute ordinary dividend income.
Dividends received on common shares by corporate U.S. Holders
generally will not be eligible for the &#x201C;dividends received
deduction.&#x201D; Subject to applicable limitations and provided
the Company is eligible for the benefits of the Canada-U.S. Tax
Convention, dividends paid by the Company to non-corporate U.S.
Holders, including individuals, generally will be eligible for the
preferential tax rates applicable to long-term capital gains for
dividends, provided certain holding period and other conditions are
satisfied, including that the Company not be classified as a PFIC
in the tax year of distribution or in the preceding tax year. The
dividend rules are complex, and each U.S. Holder should consult its
own tax advisors regarding the application of such
rules.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="text-decoration: underline; color: #000000; font-family: Times New Roman; font-size: 13px">
Sale or Other Taxable Disposition of Common Shares</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Upon
the sale or other taxable disposition of common shares, a U.S.
Holder generally will recognize capital gain or loss in an amount
equal to the difference between the U.S. dollar value of cash
received plus the fair market value of any property received and
such U.S. Holder's tax basis in such common shares sold or
otherwise disposed of. A U.S. Holder&#x2019;s tax basis in common
shares generally will be such holder&#x2019;s U.S. dollar cost for
such common shares. Gain or loss recognized on such sale or other
disposition generally will be long-term capital gain or loss if, at
the time of the sale or other disposition, the common shares have
been held for more than one year.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Preferential
tax rates currently apply to long-term capital gain of a U.S.
Holder that is an individual, estate, or trust. There are currently
no preferential tax rates for long-term capital gain of a U.S.
Holder that is a corporation. Deductions for capital losses are
subject to significant limitations under the Code.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-weight: bold; color: #000000; font-family: Times New Roman; font-size: 13px">
Additional Considerations</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="text-decoration: underline; color: #000000; font-family: Times New Roman; font-size: 13px">
Receipt of Foreign Currency</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">The
amount of any distribution paid to a U.S. Holder in foreign
currency, or on the sale, exchange or other taxable disposition of
common shares, generally will be equal to the U.S. dollar value of
such foreign currency based on the exchange rate applicable on the
date of receipt (regardless of whether such foreign currency is
converted into U.S. dollars at that time). A U.S. Holder will have
a basis in the foreign currency equal to its U.S. dollar value on
the date of receipt. Any U.S. Holder who converts or otherwise
disposes of the foreign currency after the date of receipt may have
a foreign currency exchange gain or loss that would be treated as
ordinary income or loss, and generally will be U.S. source income
or loss for foreign tax credit purposes. Different rules apply to
U.S. Holders who use the accrual method of tax accounting. Each
U.S. Holder should consult its own U.S. tax advisors regarding the
U.S. federal income tax consequences of receiving, owning, and
disposing of foreign currency.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
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</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="text-decoration: underline; color: #000000; font-family: Times New Roman; font-size: 13px">
Foreign Tax Credit</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Subject
to the PFIC rules discussed above, a U.S. Holder that pays (whether
directly or through withholding) Canadian income tax with respect
to dividends paid on the common shares generally will be entitled,
at the election of such U.S. Holder, to receive either a deduction
or a credit for such Canadian income tax. Generally, a credit will
reduce a U.S. Holder&#x2019;s U.S. federal income tax liability on a
dollar-for-dollar basis, whereas a deduction will reduce a U.S.
Holder&#x2019;s income that is subject to U.S. federal income tax.
This election is made on a year-by-year basis and applies to all
foreign taxes paid (whether directly or through withholding) by a
U.S. Holder during a year. The foreign tax credit rules are complex
and involve the application of rules that depend on a U.S.
Holder&#x2019;s particular circumstances. Accordingly, each U.S.
Holder should consult its own U.S. tax advisors regarding the
foreign tax credit rules.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="text-decoration: underline; color: #000000; font-family: Times New Roman; font-size: 13px">
Backup Withholding and Information Reporting</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Under
U.S. federal income tax law, certain categories of U.S. Holders
must file information returns with respect to their investment in,
or involvement in, a foreign corporation. For example, U.S. return
disclosure obligations (and related penalties) are imposed on
individuals who are U.S. Holders that hold certain specified
foreign financial assets in excess of certain thresholds. The
definition of specified foreign financial assets includes not only
financial accounts maintained in foreign financial institutions,
but also, unless held in accounts maintained by a financial
institution, any stock or security issued by a non-U.S. person, any
financial instrument or contract held for investment that has an
issuer or counterparty other than a U.S. person and any interest in
a foreign entity. U.S. Holders may be subject to these reporting
requirements unless their common shares are held in an account at
certain financial institutions. Penalties for failure to file
certain of these information returns are substantial. U.S. Holders
should consult with their own tax advisors regarding the
requirements of filing information returns, including the
requirement to file an IRS Form 8938.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Payments
made within the U.S., or by a U.S. payer or U.S. middleman, of
dividends on, and proceeds arising from the sale or other taxable
disposition of, common shares will generally be subject to
information reporting and backup withholding tax, at the rate of
24%, if a U.S. Holder (a) fails to furnish such U.S. Holder&#x2019;s
correct U.S. taxpayer identification number (generally on Form
W-9), (b) furnishes an incorrect U.S. taxpayer identification
number, (c) is notified by the IRS that such U.S. Holder has
previously failed to properly report items subject to backup
withholding tax, or (d) fails to certify, under penalty of perjury,
that such U.S. Holder has furnished its correct U.S. taxpayer
identification number and that the IRS has not notified such U.S.
Holder that it is subject to backup withholding tax. However,
certain exempt persons generally are excluded from these
information reporting and backup withholding rules. Backup
withholding is not an additional tax. Any amounts withheld under
the U.S. backup withholding tax rules will be allowed as a credit
against a U.S. Holder&#x2019;s U.S. federal income tax liability, if
any, or will be refunded, if such U.S. Holder furnishes required
information to the IRS in a timely manner.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">The
discussion of reporting requirements set forth above is not
intended to constitute a complete description of all reporting
requirements that may apply to a U.S. Holder. A failure to satisfy
certain reporting requirements may result in an extension of the
time period during which the IRS can assess a tax and, under
certain circumstances, such an extension may apply to assessments
of amounts unrelated to any unsatisfied reporting requirement. Each
U.S. Holder should consult its own tax advisors regarding the
information reporting and backup withholding rules.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">THE
ABOVE SUMMARY IS NOT INTENDED TO CONSTITUTE A COMPLETE ANALYSIS OF
ALL TAX CONSIDERATIONS APPLICABLE TO U.S. HOLDERS WITH RESPECT TO
THE ACQUISITION, OWNERSHIP, AND DISPOSITION OF COMMON SHARES. U.S.
HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS AS TO THE TAX
CONSIDERATIONS APPLICABLE TO THEM IN THEIR OWN PARTICULAR
CIRCUMSTANCES</font></div>
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</div>
</div>
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<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="display: table">
<div style="display: table-row">
<div style="display: table-cell; width: 48px"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">F.&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">Dividends
and paying agents.</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Not
applicable.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="display: table">
<div style="display: table-row">
<div style="display: table-cell; width: 48px"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">G.&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">Statement
by experts.</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Not
applicable.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="display: table">
<div style="display: table-row">
<div style="display: table-cell; width: 48px"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">H.&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">Documents
on display.</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">We will
furnish our shareholders with annual reports, which will include a
review of operations and annual audited consolidated financial
statements prepared in conformity with U.S. GAAP. We intend,
although we are not obligated to do so, to furnish when requested
by our shareholders quarterly reports by mail with the assistance
of a corporate services provider, which will include unaudited
interim financial information prepared in conformity with U.S. GAAP
for each of the three quarters of each fiscal year following the
end of each such quarter. We may discontinue providing quarterly
reports at any time without prior notice to our shareholders. For
additional information on the Company, please consult our website
at www.nxtenergy.com, or the SEDAR website at
http://www.sedar.com.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Our
reports and other information, including this annual report and the
exhibits hereto, as filed with the SEC in accordance with the
Exchange Act, may be inspected and copied at the public reference
facilities maintained by the SEC at 100 F Street, Washington, D.C.
20549. In addition, copies of such reports and other information
filed with the SEC can be obtained from www.sec.gov.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px;">&#xA0;</font></div>
<div style="display: table; margin-left: 48px">
<div style="display: table-row">
<div style="display: table-cell; width: 84px"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px"><a name="_Toc449704256"><!--anchor--></a>ITEM 11.0&#xA0;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK</font></div>
</div>
</div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">As at
December 31, 2019 and to date in 2020, we do not have any interest
bearing debt facilities or any forward / futures hedging contracts
in place to manage risks related to foreign currency or interest
rate fluctuations.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="text-decoration: underline; font-family: Times New Roman; font-size: 13px">
Currency Fluctuations</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">We
currently hold our cash in both Canadian and United States of
America currency, as we generally bill revenues in U.S. currency,
and periodically hold certain short-term monetary assets and
liabilities in other foreign currencies. Any transaction in a
currency other than the Canadian dollar exposes NXT to the impact
of exchange rate fluctuations between the Canadian and the foreign
currencies. We do not currently engage in hedging activities to
mitigate the effects of foreign currency fluctuation, and are
reviewing opportunities to do so.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">As at
December 31, 2019, we held U.S dollar cash and short term
investments totaling US$2,436,411. Accordingly, a hypothetical 10%
change in the value of one U.S. dollar expressed in Canadian
dollars as at December 31, 2019 would have had a $243,641 effect on
the unrealized foreign exchange gain or loss for the
year.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="text-decoration: underline; font-family: Times New Roman; font-size: 13px">
Interest Fluctuations</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">As at
December 31, 2019, we held a total of $6,639,756 in cash, cash
equivalents and short term investments. If all this cash was held
in an interest bearing account for a full year, an actual 1% change
in interest rates during the year ended December 31, 2019 would
have resulted in approximately a $66,398 change in interest income
for the year.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">
We caution that the factors referred to above and those referred to
as part of particular forward-looking statements may not be
exhaustive and that new risk factors emerge from time to time in
our rapidly changing business environment.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="display: table; margin-left: 48px">
<div style="display: table-row">
<div style="display: table-cell; width: 84px"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px"><a name="_Toc449704257"><!--anchor--></a>ITEM 12.&#xA0;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">DESCRIPTION
OF SECURITIES OTHER THAN EQUITY SECURITIES</font></div>
</div>
</div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Not
applicable.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
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<div style="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div id="pn" style="text-align: center"><font style="font-family: Times New Roman; font-size: 13px">60</font></div>
</div>
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<div style="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">
PART II</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="display: table; margin-left: 48px">
<div style="display: table-row">
<div style="display: table-cell; width: 84px"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px"><a name="_Toc449704259"><!--anchor--></a>ITEM 13.&#xA0;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">DEFAULTS,
DIVIDEND ARREARAGES AND DELINQUENCIES</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">There
have not been any defaults, dividend arrears or
delinquencies.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px;">&#xA0;</font></div>
<div style="display: table; margin-left: 48px">
<div style="display: table-row">
<div style="display: table-cell; width: 84px"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px"><a name="_Toc449704260"><!--anchor--></a>ITEM 14.&#xA0;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">MATERIAL
MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF
PROCEEDS</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: -4px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">There
have been no material modifications to the rights of security
holders except as outlined in Item 4.B &#x201C;Summary information
on dependence on patents, licenses and contracts&#x201D; within this
Form 20-F.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="display: table; margin-left: 48px">
<div style="display: table-row">
<div style="display: table-cell; width: 84px"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px"><a name="_Toc449704261"><!--anchor--></a>ITEM 15.&#xA0;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">CONTROLS
AND PROCEDURES</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="text-decoration: underline; font-family: Times New Roman; font-size: 13px">
Disclosure Controls and Procedures</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">We
maintain a set of disclosure controls and procedures
(&#x201C;DCP&#x201D;) 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 SEC rules and forms.
Disclosure controls and procedures include controls and procedures
designed to ensure that information required to be disclosed in our
reports is accumulated and communicated to management, to allow
timely decisions regarding required disclosure.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="text-decoration: underline; font-family: Times New Roman; font-size: 13px">
Management&#x2019;s Annual Report on Internal Control Over Financial
Reporting</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">The
Company's Chief Executive Officer (&#x201C;CEO&#x201D;) and Chief
Financial Officer (&#x201C;CFO&#x201D;, together the "Responsible
Officers") are responsible for establishing and maintaining DCP, or
causing them to be designed under their supervision, for NXT to
provide reasonable assurance that material information relating to
the Company is made known to the Responsible Officers by others
within the organization, particularly during the period in which
the Company's quarterly and year-end financial statements, Form
20-F and Canadian MD&amp;A are being prepared.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">As of
December 31, 2019, we carried out an evaluation, under the
supervision and with the participation of our management, including
our Responsible Officers, of the effectiveness of the design and
operation of the Company&#x2019;s DCP as defined under the rules
adopted by the Canadian securities regulatory authorities and in
Rule 13a-15(e) of the Exchange Act. The evaluation concluded that
there are material weaknesses in the Company&#x2019;s ICFR that have
a direct impact on the Company&#x2019;s DCP as discussed in more
detail below.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Our
management, under the supervision of the Responsible Officers, is
also responsible for establishing and maintaining adequate internal
control over financial reporting (&#x201C;ICFR&#x201D;) as defined in
Rule 13a-15(f) of the Exchange Act. Our internal control system was
designed to provide reasonable assurance regarding the reliability
of financial reporting and the preparation and fair presentation of
our consolidated financial statements for external purposes in
accordance with generally accepted accounting principles. Our
Responsible Officers assessed the effectiveness of our ICFR as of
December 31, 2019. In making this assessment, they used the
criteria established in <font style="font-style: italic">Internal
Control &#x2013; Integrated Framework 2013, issued by the Committee
of Sponsoring Organizations of the Treadway Commission</font>
(&#x201C;COSO&#x201D;).</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Our
ICFR were not required to be independently audited. Accordingly, no
independent audit was performed over the effectiveness of internal
controls as at December 31, 2019 and this annual report does not
include an attestation report of the Company&#x2019;s registered
public accounting firm regarding ICFR. Management&#x2019;s report
was not subject to attestation by the Company&#x2019;s registered
public accounting firm pursuant to rules of the SEC that permit the
Company to provide only management&#x2019;s report in this annual
report.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
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<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div id="pn" style="text-align: center"><font style="font-family: Times New Roman; font-size: 13px">61</font></div>
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<div style="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">During
this process, we identified the following material weaknesses in
the Company&#x2019;s ICFR that have a direct impact on the
Company&#x2019;s DCP:</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="margin-left: 12px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">due to the limited
number of staff, it is not feasible to achieve adequate segregation
of incompatible duties &#x2013; NXT mitigates this deficiency by
adding management and Audit Committee review procedures over the
areas where inadequate segregation of duties are of the greatest
concern; and</font></div>
</div>
</div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="margin-left: 12px; display: table">
<div style="display: table-row">
<div style="text-align: left; display: table-cell; width: 24px">
<font style="font-size: 13px">&#x25CF;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-family: Times New Roman; font-size: 13px">NXT does not have a
sufficient level of staff with specialized expertise to adequately
conduct separate preparation and a subsequent independent review of
certain complex or highly judgmental accounting issues &#x2013; NXT
mitigates this deficiency by preparing financial statements with
their best judgments and estimates of the complex accounting
matters and relies on reviews by management, external consultants
and the Audit Committee for quality assurance.</font></div>
</div>
</div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">From
time to time to reduce these risks and to supplement a small
corporate finance function, the Company engages various outside
experts and advisors to assist with various accounting, controls
and tax issues in the normal course.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Notwithstanding
NXT&#x2019;s efforts to mitigate the risks associated with the
above-mentioned deficiencies, the CEO and CFO concluded that the
Company's ICFR are not effective and as a result its DCP are not
effective as at December 31, 2019. NXT reached this conclusion
based upon their assessment that there is more than a remote
likelihood that its ICFR will not prevent or detect material
misstatements if they should exist in our consolidated financial
statements. NXT has therefore further taken on a process of
continuous improvement in financial reporting and disclosure
policies and responsibilities from which we continue to expect to
see benefits over the course of 2020.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">It
should be noted that a control system, including the
Company&#x2019;s DCP and ICFR procedures, no matter how well
conceived, can provide only reasonable, but not absolute assurance
that the objectives of the control system will be met and it should
not be expected that the DCP and ICFR will prevent all errors or
fraud.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="text-decoration: underline; color: #000000; font-family: Times New Roman; font-size: 13px">
Changes in Internal Controls</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="background-color: #FFFFFF; font-family: Times New Roman; font-size: 13px">
The small size of the Company's finance team has resulted in
control deficiencies in maintaining DCPs and ICFR that in turn have
led to a recurrence of previously identified deficient
disclosure.&#xA0;&#xA0;Given the small size of the Companies
finance team and in order to improve ICFR moving forward,
management has established a practice of increased engagement of
the Company's Disclosure Committee and Audit Committee in reviewing
the public disclosure and has increased engagement of external
consultants and legal counsel as well.&#xA0;&#xA0;</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">NXT's
efforts to mitigate the risks associated with the above-mentioned
deficiencies has resulted in continuous improvements in its DCPs.
The Responsible Officers concluded that, as at December 31, 2019,
the Company's ICFR have improved, but are still not effective and
as a result its DCPs are still not sufficiently effective. NXT
reached this conclusion based upon its assessment that there is a
more than remote likelihood that its ICFR will not prevent or
detect material misstatements if they should exist in the Company's
consolidated financial statements. <font style="color: #222222; background-color: #FFFFFF">NXT continues a process
of</font> <font style="background-color: #FFFFFF">continuous
improvement in financial reporting and disclosure policies and
responsibilities from which the Company</font> expects to see
continued benefits in 2020. The Responsible Officers continue to
take certain actions to remediate these material weaknesses
including: (i) the implementation of new controls with regards to
the review procedures surrounding its disclosure; and (ii)
engagement of third-party specialists. In addition, the Company has
appointed its Corporate Controller as the new Chief Financial
Officer as of August 1, 2019. The Chief Financial Officer engages
subject matter consultants as the need arises.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">The new
controls over financial reporting and disclosure policies and
responsibilities have been performed over seven quarterly periods.
Material weaknesses cannot be considered remediated until the
remedial controls operate for a sufficient period of time and
Responsible Officers have concluded through testing that these
controls are operating effectively.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">It
should be noted that a control system, including the Company's DCPs
and ICFR procedures, no matter how well conceived, can provide only
reasonable, but not absolute assurance that the objectives of the
control system will be met, and it should not be expected that the
DCPs and ICFR will prevent all errors or
fraud.&#xA0;&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="color: #000000; font-family: Times New Roman; font-size: 13px">
There were no other changes in our internal control over financial
reporting that materially affected, or are reasonably likely to
materially affect, our internal control over financial reporting
during the period ended December 31, 2019.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
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<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div id="pn" style="text-align: center"><font style="font-family: Times New Roman; font-size: 13px">62</font></div>
</div>
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<div style="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="display: table; margin-left: 48px">
<div style="display: table-row">
<div style="display: table-cell; width: 84px"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">ITEM
16A.&#xA0;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">AUDIT
COMMITTEE FINANCIAL EXPERT</font></div>
</div>
</div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Our
Board of Directors has determined that we have at least one audit
committee &#x201C;financial expert&#x201D; (as defined under Item
16.A of Form 20-F) serving on our Audit Committee. The Audit
Committee consists of Messrs. Wilcox (Chair), Ingriselli, Selby and
Tilson. Each member of the NXT Audit Committee has relevant
experience in understanding and evaluating financial information,
generally accepted accounting principles, control systems and audit
committee functions. Each member of NXT&#x2019;s Audit Committee is
considered a financial expert, and Messrs. Wilcox, Ingriselli, and
Tilson are &#x201C;independent&#x201D; directors, as that term is
defined under the listing standards of NASDAQ.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="display: table; margin-left: 48px">
<div style="display: table-row">
<div style="display: table-cell; width: 84px"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">ITEM
16B.&#xA0;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">CODE
OF ETHICS</font></div>
</div>
</div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">NXT has
in place a Code of Conduct &amp; Business Ethics (the &#x201C;Code
of Conduct&#x201D;) that applies to all of our directors, officers,
employees, and consultants. This Code of Conduct is incorporated in
our Employee Handbook, is an integral part of our employee
contracts and our Employee Handbook and contains Company policies
on Business Ethics, Employee Practices and Conflicts of
Interest.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">During
2019, the Company did not significantly amend its Code of Conduct
or grant any waiver, including any implicit waiver, from any
provision of the Code of Conduct to any of its directors, officers
or employees. Copies of NXT&#x2019;s Code of Conduct are available
without charge to any person upon request from NXT&#x2019;s Chief
Financial Officer at nxt_info@nxtenergy.com or at NXT&#x2019;s
headquarters at Suite 302, 3320 &#x2013; 17<font style="font-size: 70%; vertical-align: top">th</font> Avenue SW, Calgary
Alberta, Canada, T3E 0B4, and on the Company website,
www.nxtenergy.com.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px;">&#xA0;</font></div>
<div style="display: table; margin-left: 48px">
<div style="display: table-row">
<div style="display: table-cell; width: 84px"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">ITEM
16C.&#xA0;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">PRINCIPAL
ACCOUNTANT FEES AND SERVICES</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">The
following table sets forth the aggregate audit fees, audit-related
fees, tax fees of our principal accountants and all other fees
billed for products and services provided by our principal
accountants for each of the fiscal years ended December 31, 2019
and 2018.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div>
<table cellpadding="0" cellspacing="0" style="margin-right:0px;width:100%;font-size:inherit;font-family:inherit;margin-left:0px;">
<tr>
<td rowspan="1" style="vertical-align:bottom;width:76%;">
<div style="margin-left:0px;padding-bottom:1px;"><font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</td>
<td rowspan="1" style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; border-bottom: 1px solid rgb(0, 0, 0); display: inline-block; font-weight: bold; font-size: 11px;">
<div><font style="font-family: Times New Roman; color: rgb(0, 0, 0); font-weight: bold;">
2019</font></div>
</font><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font></div>
</td>
<td rowspan="1" style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; border-bottom: 1px solid rgb(0, 0, 0); display: inline-block; font-weight: bold; font-size: 11px;">
<div><font style="font-family: Times New Roman; color: rgb(0, 0, 0); font-weight: bold;">
&#xA0;2018</font></div>
</font><font style="text-align: left; padding-bottom: 1px; width: 10%; vertical-align: bottom; display: inline-block; font-weight: bold; font-size: 11px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td style="vertical-align:bottom;width:76%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Audit
fees</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">$</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">136,470</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">$</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">126,810</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#ffffff;">
<td style="vertical-align:bottom;width:76%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Tax
fees</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">18,340</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:5%;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:75%;font-size:13px;">5,510</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;font-size:13px;">&#xA0;</font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td style="vertical-align:bottom;width:76%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;padding-bottom:1px;margin-left:0px;"><font style="color: #000000; font-family: Times New Roman; font-size: 13px">Total
fees</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">154,810</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font><font style="text-align: left; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:5%;font-family:Times New Roman;font-size:13px;">&#xA0;</font><font style="text-align: right; color:#000000;border-bottom:solid 1px #000000;vertical-align:bottom;display:inline-block;width:75%;font-family:Times New Roman;font-size:13px;">132,320</font><font style="text-align: left; color:#000000;font-family:Times New Roman;vertical-align:bottom;display:inline-block;width:10%;padding-bottom:1px;font-size:13px;">&#xA0;</font></div>
</td>
</tr></table>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="text-decoration: underline; font-family: Times New Roman; font-size: 13px">
Audit Committee&#x2019;s Pre-approval Policies and
Procedures</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Our
Audit Committee nominates and engages our independent auditors to
audit our financial statements. Our Audit Committee also requires
management to obtain the Audit Committee&#x2019;s approval on a
case-by-case basis before engaging our independent auditors to
provide any audit or permitted non-audit services to the Company or
any of our subsidiaries. All fees shown have been pre-approved by
the Audit Committee.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="display: table; margin-left: 48px">
<div style="display: table-row">
<div style="display: table-cell; width: 84px"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">ITEM
16D.&#xA0;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">EXEMPTIONS
FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES</font></div>
</div>
</div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 84px; margin-right: 0px; text-indent: -84px">
<font style="font-family: Times New Roman; font-size: 13px">Not
applicable.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="display: table; margin-left: 48px">
<div style="display: table-row">
<div style="display: table-cell; width: 84px"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">ITEM
16E.&#xA0;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">PURCHASES
OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED
PURCHASERS</font></div>
</div>
</div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div>
<table cellpadding="0" cellspacing="0" style="margin-right:0px;width:100%;font-size:inherit;font-family:inherit;margin-left:0px;">
<tr>
<td rowspan="1" style="vertical-align:bottom;width:52%;">
<div style="text-align: justify; text-indent: 0px; margin-right: 0px; margin-left: 0px; border-bottom: 1px solid rgb(0, 0, 0);"><font style="font-size: 11px"><font style="font-weight: bold; font-family: Times New Roman;">Period</font></font></div>
</td>
<td rowspan="1" style="vertical-align:bottom;width:12%;">
<div><font style="font-size: 11px"><font style="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; padding-bottom: 1px;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; display: inline-block; border-bottom: 1px solid rgb(0, 0, 0);">
<div><font style="font-weight: bold; font-family: Times New Roman;">Total Number of
Shares Purchased</font></div>
</font><font style="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; padding-bottom: 1px;">&#xA0;</font></font></div>
</td>
<td rowspan="1" style="vertical-align:bottom;width:12%;">
<div><font style="font-size: 11px"><font style="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; padding-bottom: 1px;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; display: inline-block; border-bottom: 1px solid rgb(0, 0, 0);">
<div><font style="font-weight: bold; font-family: Times New Roman;">Average Price
Paid per Shares</font></div>
</font><font style="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; padding-bottom: 1px;">&#xA0;</font></font></div>
</td>
<td rowspan="1" style="vertical-align:bottom;width:12%;">
<div><font style="font-size: 11px"><font style="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; padding-bottom: 1px;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; display: inline-block; border-bottom: 1px solid rgb(0, 0, 0);">
<div><font style="font-weight: bold; font-family: Times New Roman;">Total Number of
Shares Purchased as Part of Publicly Announced Plans or
Programs</font></div>
</font><font style="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; padding-bottom: 1px;">&#xA0;</font></font></div>
</td>
<td rowspan="1" style="vertical-align:bottom;width:12%;">
<div><font style="font-size: 11px"><font style="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; padding-bottom: 1px;">&#xA0;</font><font style="text-align: center; vertical-align: bottom; width: 80%; display: inline-block; border-bottom: 1px solid rgb(0, 0, 0);">
<div><font style="font-weight: bold; font-family: Times New Roman;">Maximum Number
(or Approximate Dollar Value) of Shares that May Yet Be Purchased
Under the Plans or Programs</font></div>
</font><font style="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; padding-bottom: 1px;">&#xA0;</font></font></div>
</td>
</tr><tr style="background-color:#cceeff;">
<td style="vertical-align:bottom;width:52%;">
<div style="text-align: justify; text-indent:0px;margin-right:0px;margin-left:0px;"><font style="font-family: Times New Roman; font-size: 13px">November 15, 2019
&#x2013; December 9, 2019</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">4,166,667</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">$</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">.30</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">4,166,667</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
<td style="vertical-align:bottom;width:12%;">
<div><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: left; vertical-align:bottom;width:5%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font><font style="text-align: right; vertical-align:bottom;width:75%;font-size:13px;font-family:Times New Roman;display:inline-block;">0</font><font style="text-align: left; vertical-align:bottom;width:10%;font-size:13px;font-family:Times New Roman;display:inline-block;">&#xA0;</font></div>
</td>
</tr></table>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div><font style="font-family: Times New Roman; font-size: 10"><br></font></div>
<div id="pgbrk" style="width: 100%; margin-left: 0px; text-indent: 0px; margin-right: 0px">
<div id="ftr">
<div style="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div id="pn" style="text-align: center"><font style="font-family: Times New Roman; font-size: 13px">63</font></div>
</div>
<div id="pb" style="text-align: center; page-break-after: always; margin-left: 0px; margin-right: 0px; margin-bottom: 6px; width: 100%; height: 1px; background-color: #000000">
<!--page break--></div>
<div id="hdr">
<div style="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px"><br></font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-weight: bold; font-style: italic; font-family: Times New Roman; font-size: 13px">
Targeted Issuer Bid</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Between
November 15, 2019 (the "TIB Commencement Date") and December 9,
2019 (the "TIB Completion Date"), NXT purchased for cancellation an
aggregate of 4,166,667 Common Shares, representing approximately
6.08% of the 68,573,558 Common Shares outstanding as at the TIB
Commencement Date. The purchase price of $0.30 per Common Share
represented a discount of approximately 22.9% relative to the
market price of $0.389 per Common Share as at the TIB Commencement
Date. Gross proceeds received by AGV totaled approximately
$1,250,000.00, representing approximately 6.1% of the Company's
market capitalization of approximately $26,675,114.062 as at the
TIB Commencement Date.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">The
terms of the Targeted Issuer Bid also provided that the 3,421,648
Warrants expired effective October 31, 2019, and that certain
deadlines under the Co-operation Agreement be extended. AGV's
registered ownership in the Company was reduced from 10,264,946
Common Shares and 3,421,648 Warrants, representing, on a fully
diluted basis, approximately 20.0% of the 68,573,558 issued and
outstanding Common Shares as at the TIB Commencement Date, to
6,098,279 Common Shares and nil Warrants, representing
approximately 9.5% of the 64,406,891 issued and outstanding Common
Shares as at the TIB Completion Date.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">By
strategically acquiring its Common Shares for cancellation in a
private transaction at a discount to the then current market price,
the Company improved the equity position of its other shareholders
and provided AGV with additional funds necessary to continue
advancing the common objectives of the parties under the
Co-operation Agreement, while also avoiding a substantial decrease
in the market price and liquidity of the Common Shares reasonably
expected if AGV were to sell a substantial portion of its equity
position into the open market.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">The
Targeted Issuer Bid was exempt from the formal valuation and
disinterested shareholder approval requirements typically
applicable to related party transactions under applicable
securities laws as neither the fair market value of the Common
Shares (approximately $1,620,833.46) nor the consideration received
by AGV for the Common Shares (approximately $1,250,000.00) exceeded
25% of the Company's market capitalization at the TIB Commencement
Date (approximately $26,675,114.06).</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="display: table; margin-left: 48px">
<div style="display: table-row">
<div style="display: table-cell; width: 84px"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">ITEM
16F.&#xA0;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">CHANGE
IN REGISTRANT&#x2019;S CERTIFYING ACCOUNTANT</font></div>
</div>
</div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Not
applicable.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="display: table; margin-left: 48px">
<div style="display: table-row">
<div style="display: table-cell; width: 84px"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px"><a name="_Toc449704268"><!--anchor--></a>ITEM 16G.&#xA0;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">CORPORATE
GOVERNANCE</font></div>
</div>
</div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Not
applicable.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="display: table; margin-left: 48px">
<div style="display: table-row">
<div style="display: table-cell; width: 84px"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px"><a name="_Toc449704269"><!--anchor--></a>ITEM 16H.&#xA0;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">MINE
SAFETY DISCLOSURE</font></div>
</div>
</div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">Not
applicable.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">
PART III</font></div>
<div style="display: table; margin-left: 48px">
<div style="display: table-row">
<div style="display: table-cell; width: 84px"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px"><a name="_Toc449704271"><!--anchor--></a>ITEM 17.&#xA0;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">FINANCIAL
STATEMENTS</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">The
Company&#x2019;s consolidated financial statements and related notes
are prepared in accordance with U.S. generally accepted accounting
principles and included in Item 18 to this annual
report.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px;">&#xA0;</font></div>
<div style="display: table; margin-left: 48px">
<div style="display: table-row">
<div style="display: table-cell; width: 84px"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px"><a name="_Toc449704272"><!--anchor--></a>ITEM 18.&#xA0;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">FINANCIAL
STATEMENTS</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">The
Company&#x2019;s consolidated financial statements and related notes
have been prepared in accordance with U.S. generally accepted
accounting principles.</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div id="pgbrk" style="width: 100%; margin-left: 0px; text-indent: 0px; margin-right: 0px">
<div id="ftr">
<div style="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div id="pn" style="text-align: center"><font style="font-family: Times New Roman; font-size: 13px">64</font></div>
</div>
<div id="pb" style="text-align: center; page-break-after: always; margin-left: 0px; margin-right: 0px; margin-bottom: 6px; width: 100%; height: 1px; background-color: #000000">
<!--page break--></div>
<div id="hdr">
<div style="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="display: table; margin-left: 48px">
<div style="display: table-row">
<div style="display: table-cell; width: 84px"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px"><a name="_Toc449704273"><!--anchor--></a>ITEM 19.&#xA0;</font></div>
<div style="text-align: justify; display: table-cell"><font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">EXHIBITS</font></div>
</div>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div style="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">
EXHIBIT INDEX</font></div>
<div style="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px;">&#xA0;</font></div>
<div>
<table cellpadding="0" cellspacing="0" style="width: 100%; font-family: Times New Roman; font-size: 13px">
<tr>
<td style="vertical-align: top; width: 12%; border-bottom: 2px solid #000000">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-size: 11px"><font style="font-weight: bold; font-family: Times New Roman;">Exhibit
No.</font></font></div>
</td>
<td style="vertical-align: top; width: 88%; border-bottom: 2px solid #000000">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-size: 11px"><font style="font-weight: bold; font-family: Times New Roman;">Description</font></font></div>
</td>
</tr><tr style="background-color: rgb(204, 238, 255);">
<td style="vertical-align: top; width: 12%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><a href="http://www.sec.gov/Archives/edgar/data/1009922/0000944209-98-001232-index.html">
<font style="font-family: Times New Roman; font-size: 13px">1.1</font></a></div>
</td>
<td style="vertical-align: top; width: 88%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><a href="http://www.sec.gov/Archives/edgar/data/1009922/0000944209-98-001232-index.html">
<font style="font-family: Times New Roman; font-size: 13px">Articles of
Incorporation of Auric Mining Corporation as filed with the Nevada
Secretary of State on September 27, 1994 (incorporated by reference
to Exhibit 3.1 to the Registration Statement on Form 10 filed on
June 29, 1998)</font></a></div>
</td>
</tr><tr>
<td style="vertical-align: top; width: 12%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><a href="http://www.sec.gov/Archives/edgar/data/1009922/0000944209-98-001232-index.html">
<font style="font-family: Times New Roman; font-size: 13px">1.2</font></a></div>
</td>
<td style="vertical-align: top; width: 88%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><a href="http://www.sec.gov/Archives/edgar/data/1009922/0000944209-98-001232-index.html">
<font style="font-family: Times New Roman; font-size: 13px">Amendment to
Articles of Incorporation of Auric Mining Corporation as filed with
the Nevada Secretary of State on February 23, 1996 (incorporated by
reference to Exhibit 3.1 to the Registration Statement on Form 10
filed on June 29, 1998)</font></a></div>
</td>
</tr><tr style="background-color: rgb(204, 238, 255);">
<td style="vertical-align: top; width: 12%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><a href="http://www.sec.gov/Archives/edgar/data/1009922/0000944209-98-001232-index.html">
<font style="font-family: Times New Roman; font-size: 13px">1.3</font></a></div>
</td>
<td style="vertical-align: top; width: 88%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><a href="http://www.sec.gov/Archives/edgar/data/1009922/0000944209-98-001232-index.html">
<font style="font-family: Times New Roman; font-size: 13px">Certificate of
Amendment to Articles of Incorporation of Pinnacle Oil
International, Inc. as filed with the&#xA0;Nevada Secretary of
State on April 1, 1998 (incorporated by reference to Exhibit 3.3 to
the Registration Statement on Form 10 filed on June 29,
1998)</font></a></div>
</td>
</tr><tr>
<td style="vertical-align: top; width: 12%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><a href="http://www.sec.gov/Archives/edgar/data/1009922/000094420900001192/0000944209-00-001192-0002.txt">
<font style="font-family: Times New Roman; font-size: 13px">1.4</font></a></div>
</td>
<td style="vertical-align: top; width: 88%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><a href="http://www.sec.gov/Archives/edgar/data/1009922/000094420900001192/0000944209-00-001192-0002.txt">
<font style="font-family: Times New Roman; font-size: 13px">Certificate of
Amendment to Articles of Incorporation of Pinnacle Oil
International, Inc. as filed with the&#xA0;Nevada Secretary of
State on June 13, 2000 (incorporated by reference to Exhibit 3.4 to
our Amendment No. 1 to the Annual Report on Form 10-K for the year
ended December 31, 1999 as filed on July 28, 2000)</font></a></div>
</td>
</tr><tr style="background-color: rgb(204, 238, 255);">
<td style="vertical-align: top; width: 12%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><a href="http://www.sec.gov/Archives/edgar/data/1009922/000113717109000488/ex0108.htm">
<font style="font-family: Times New Roman; font-size: 13px">1.5</font></a></div>
</td>
<td style="vertical-align: top; width: 88%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><a href="http://www.sec.gov/Archives/edgar/data/1009922/000113717109000488/ex0108.htm">
<font style="font-family: Times New Roman; font-size: 13px">Articles of
Amendment of Energy Exploration Technologies Inc. as filed with the
province of Alberta, Canada on September 22, 2008 (incorporated by
reference to Exhibit 1.8 to our Annual Report on Form 20-F for the
year ended December 31, 2008 as filed on June 29,
2009)</font></a></div>
</td>
</tr><tr>
<td style="vertical-align: top; width: 12%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><a href="http://www.sec.gov/Archives/edgar/data/1009922/000113717113000323/nom.htm">
<font style="font-family: Times New Roman; font-size: 13px">1.6</font></a></div>
</td>
<td style="vertical-align: top; width: 88%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><a href="http://www.sec.gov/Archives/edgar/data/1009922/000113717113000323/nom.htm">
<font style="font-family: Times New Roman; font-size: 13px">Amendment to the
Articles of NXT Energy Solutions Inc. (incorporated by reference to
Item V of Exhibit 99.1 to Form 6-K as filed on September 20,
2013)</font></a></div>
</td>
</tr><tr style="background-color: rgb(204, 238, 255);">
<td style="vertical-align: top; width: 12%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><a href="http://www.sec.gov/Archives/edgar/data/1009922/000113717113000323/inforcirc.htm">
<font style="font-family: Times New Roman; font-size: 13px">1.7</font></a></div>
</td>
<td style="vertical-align: top; width: 88%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><a href="http://www.sec.gov/Archives/edgar/data/1009922/000113717113000323/inforcirc.htm">
<font style="font-family: Times New Roman; font-size: 13px">NXT
Energy Solutions Inc. By-Law No. 1 (incorporated by reference to
Schedule &#x201C;D&#x201D; to Exhibit 99.2 to Form 6-K as filed on
September 20, 2013)</font></a></div>
</td>
</tr><tr>
<td style="vertical-align: top; width: 12%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><a href="nsfdf_ex21.htm"><font style="font-family: Times New Roman; font-size: 13px">2.1</font></a></div>
</td>
<td style="vertical-align: top; width: 88%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><a href="nsfdf_ex21.htm"><font style="font-family: Times New Roman; font-size: 13px">Description of
Securities</font></a></div>
</td>
</tr><tr style="background-color: rgb(204, 238, 255);">
<td style="vertical-align: top; width: 12%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><a href="http://www.sec.gov/Archives/edgar/data/1009922/000113717114000094/ex46.htm">
<font style="font-family: Times New Roman; font-size: 13px">4.1</font></a></div>
</td>
<td style="vertical-align: top; width: 88%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><a href="http://www.sec.gov/Archives/edgar/data/1009922/000113717114000094/ex46.htm">
<font style="font-family: Times New Roman; font-size: 13px">Form of
Indemnification Agreement between NXT Energy Solutions Inc. and
each of its Directors and Executive Officers (incorporated by
reference to Exhibit 4.6 to our Annual Report on Form 20-F for the
year ended December 31, 2013 as filed on April 30,
2014)</font></a></div>
</td>
</tr><tr>
<td style="vertical-align: top; width: 12%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><a href="http://www.sec.gov/Archives/edgar/data/1009922/000113717107000050/ownershipagree.htm">
<font style="font-family: Times New Roman; font-size: 13px">4.2</font></a></div>
</td>
<td style="vertical-align: top; width: 88%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><a href="http://www.sec.gov/Archives/edgar/data/1009922/000113717107000050/ownershipagree.htm">
<font style="font-family: Times New Roman; font-size: 13px">SFD<font style="font-size: 70%; vertical-align: top">&#xAE;</font> Technology
Ownership Agreement dated December 31, 2006 (incorporated by
reference to Exhibit 99.4 to Form 6-K as filed on January 12,
2007)</font></a></div>
</td>
</tr><tr style="background-color: rgb(204, 238, 255);">
<td style="vertical-align: top; width: 12%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><a href="http://www.sec.gov/Archives/edgar/data/1009922/000113717107000050/transferagree.htm">
<font style="font-family: Times New Roman; font-size: 13px">4.3</font></a></div>
</td>
<td style="vertical-align: top; width: 88%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><a href="http://www.sec.gov/Archives/edgar/data/1009922/000113717107000050/transferagree.htm">
<font style="font-family: Times New Roman; font-size: 13px">Technology Transfer
Agreement dated December 31, 2006 (incorporated by reference to
Exhibit 99.6 to Form 6-K as filed on January 12,
2007)</font></a></div>
</td>
</tr><tr>
<td style="vertical-align: top; width: 12%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><a href="http://www.sec.gov/Archives/edgar/data/1009922/000113717114000094/ex81.htm">
<font style="font-family: Times New Roman; font-size: 13px">8.1</font></a></div>
</td>
<td style="vertical-align: top; width: 88%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><a href="http://www.sec.gov/Archives/edgar/data/1009922/000113717114000094/ex81.htm">
<font style="font-family: Times New Roman; font-size: 13px">List of
Subsidiaries (incorporated by reference to Exhibit 8.1 to our
Annual Report on Form 20-F for the year ended December 31, 2013 as
filed on April 30, 2014)</font></a></div>
</td>
</tr><tr style="background-color: rgb(204, 238, 255);">
<td style="vertical-align: top; width: 12%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><a href="http://www.sec.gov/Archives/edgar/data/1009922/000113717114000094/ex111.htm">
<font style="font-family: Times New Roman; font-size: 13px">11.1</font></a></div>
</td>
<td style="vertical-align: top; width: 88%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><a href="http://www.sec.gov/Archives/edgar/data/1009922/000113717114000094/ex111.htm">
<font style="font-family: Times New Roman; font-size: 13px">Code of
Conduct and Business Ethics (incorporated by reference to Exhibit
11.1 to our Annual Report on Form 20-F for the year ended December
31, 2013 as filed on April 30, 2014)</font></a></div>
</td>
</tr><tr>
<td style="vertical-align: top; width: 12%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><a href="nsfdf_ex121.htm"><font style="font-family: Times New Roman; font-size: 13px">12.1</font></a></div>
</td>
<td style="vertical-align: top; width: 88%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><a href="nsfdf_ex121.htm"><font style="font-family: Times New Roman; font-size: 13px">Rule
13a-14(a)/15d-14(a) Certification of Chief Executive Officer and
President</font></a></div>
</td>
</tr><tr style="background-color: rgb(204, 238, 255);">
<td style="vertical-align: top; width: 12%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><a href="nsfdf_ex122.htm"><font style="font-family: Times New Roman; font-size: 13px">12.2</font></a></div>
</td>
<td style="vertical-align: top; width: 88%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><a href="nsfdf_ex122.htm"><font style="font-family: Times New Roman; font-size: 13px">Rule
13a-14(a)/15d-14(a) Certification of VP Finance and Chief Financial
Officer</font></a></div>
</td>
</tr><tr>
<td style="vertical-align: top; width: 12%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><a href="nsfdf_ex131.htm"><font style="font-family: Times New Roman; font-size: 13px">13.1</font></a></div>
</td>
<td style="vertical-align: top; width: 88%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><a href="nsfdf_ex131.htm"><font style="font-family: Times New Roman; font-size: 13px">Section 1350
Certification of Chief Executive Officer and
President</font></a></div>
</td>
</tr><tr style="background-color: rgb(204, 238, 255);">
<td style="vertical-align: top; width: 12%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><a href="nsfdf_ex132.htm"><font style="font-family: Times New Roman; font-size: 13px">13.2</font></a></div>
</td>
<td style="vertical-align: top; width: 88%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><a href="nsfdf_ex132.htm"><font style="font-family: Times New Roman; font-size: 13px">Section 1350
Certification of VP Finance and Chief Financial
Officer</font></a></div>
</td>
</tr><tr>
<td style="vertical-align: top; width: 12%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><a href="nsfdf_ex151.htm"><font style="font-family: Times New Roman; font-size: 13px">15.1</font></a></div>
</td>
<td style="vertical-align: top; width: 88%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><a href="nsfdf_ex151.htm"><font style="font-family: Times New Roman; font-size: 13px">Consolidated
Financial Statements and Audit report of KPMG LLP for the year
ended December 31, 2019</font></a></div>
</td>
</tr><tr style="background-color: rgb(204, 238, 255);">
<td style="vertical-align: top; width: 12%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><a href="nsfdf_ex152.htm"><font style="font-family: Times New Roman; font-size: 13px">15.2</font></a></div>
</td>
<td style="vertical-align: top; width: 88%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><a href="nsfdf_ex152.htm"><font style="font-family: Times New Roman; font-size: 13px">Consent of KPMG
LLP</font></a></div>
</td>
</tr><tr>
<td style="vertical-align: top; width: 12%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><a href="nsfdf_ex153.htm"><font style="font-family: Times New Roman; font-size: 13px">15.3</font></a></div>
</td>
<td style="vertical-align: top; width: 88%">
<div style="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><a href="nsfdf_ex153.htm"><font style="font-family: Times New Roman; font-size: 13px">Management&#x2019;s
Discussion and Analysis for the year ended December 31,
2019</font></a></div>
</td>
</tr></table>
</div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div id="pgbrk" style="width: 100%; margin-left: 0px; text-indent: 0px; margin-right: 0px">
<div id="ftr">
<div style="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div id="pn" style="text-align: center"><font style="font-family: Times New Roman; font-size: 13px">65</font></div>
</div>
<div id="pb" style="text-align: center; page-break-after: always; margin-left: 0px; margin-right: 0px; margin-bottom: 6px; width: 100%; height: 1px; background-color: #000000">
<!--page break--></div>
<div id="hdr">
<div style="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
</div>
</div>
<div style="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">
</font></div>
<div style="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-weight: bold; font-family: Times New Roman; font-size: 13px">
SIGNATURES</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">The
registrant hereby certifies that it meets all of the requirements
for filing on Form 20-F and that it has duly caused and authorized
the undersigned to sign this annual report on its
behalf.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 240px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">NXT
Energy Solutions Inc.</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;</font></div>
<div><font style="font-family: Times New Roman; font-size: 10">&#xA0;</font></div>
<div style="text-align: justify; margin-left: 240px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">By: /s/
George Liszicasz</font></div>
<div style="text-align: justify; margin-left: 240px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;George
Liszicasz</font></div>
<div style="text-align: justify; margin-left: 240px; margin-right: 0px; text-indent: 0px">
<font style="font-family: Times New Roman; font-size: 13px">&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;Director,
Chairman, Chief Executive Officer and President</font></div>
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<font style="font-family: Times New Roman; font-size: 13px">Dated:
May 5, 2020</font></div>
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{"company-data": {"conformed-name": "NXT Energy Solutions Inc.", "cik": "0001009922", "assigned-sic": "1382", "irs-number": "611126904", "state-of-incorporation": "A0", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "20-F", "act": "34", "file-number": "000-24027", "film-number": "20849911"}, "business-address": {"street1": "3320 - 17TH AVENUE SW", "street2": "SUITE 302", "city": "CALGARY, T3E 0B4", "state": "A0", "zip": "90035", "phone": "403-264-7020"}, "mail-address": {"street1": "3320 - 17TH AVENUE SW", "street2": "SUITE 302", "city": "CALGARY, T3E 0B4", "state": "A0", "zip": "90035"}, "former-company": [{"former-conformed-name": "ENERGY EXPLORATION TECHNOLOGIES /", "date-changed": "20000628"}, {"former-conformed-name": "PINNACLE OIL INTERNATIONAL INC", "date-changed": "20000626"}, {"former-conformed-name": "ENERGY EXPLORATION TECHNOLOGIES", "date-changed": "20000616"}]}
nsfdf_20f
UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549
FORM
20-F
(Mark One)
[
]
Registration
Statement Pursuant To Section 12(b) or (g) of the Securities
Exchange Act of 1934
OR
[ X
]
Annual Report
Pursuant To Section 13 or 15(d) of the Securities Exchange Act of
1934
for the fiscal year
ended December 31, 2019.
OR
[
]
Transition Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934
For the
transition period from __ to __
OR
[
]
Shell Company
Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
Date of
event requiring this shell company report:
Commission
file number 000-24027
NXT
Energy Solutions Inc.
(Exact
Name of Registrant as Specified in its Charter)
Alberta,
Canada
(Jurisdiction of incorporation or organization)
Suite
302, 3320 - 17
th
Avenue
SW
Calgary, Alberta, Canada, T3E 0B4
(Address of principal executive offices)
Eugene
Woychyshyn
Phone:
403-206-0805
Facsimile:
403-264-6442
Suite
302, 3320 - 17
th
Avenue
SW
Calgary, Alberta, Canada, T3E 0B4
(Name, Telephone, E-mail and/or Facsimile number and address of
Company Contact Person)
Securities
registered or to be registered pursuant to Section 12(b) of the
Act: None
Securities
registered or to be registered pursuant to Section 12(g) of the
Act:
Common
Shares
(Title
of Class)
Securities
for which there is a reporting obligation pursuant to Section 15(d)
of the Act: None
Indicate
the number of outstanding shares of each of the issuer's
classes of capital or common stock as of the close of the period
covered by the annual report:
64,406,891
common shares outstanding as of December 31, 2019 (64,406,891
common shares outstanding as of May 5, 2020)
Indicate by check
mark if the registrant is a well-known seasoned issuer, as defined
in Rule 405 of the Securities Act.
Yes
___
No
X
If this report is
an annual or transition report, indicate by check mark if the
registrant is not required to file reports pursuant to Section 13
or 15(d) of the Securities Exchange Act of 1934
Yes
___
No
X
Note-Checking the
box above will not relieve any registrant required to file reports
pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934 from their obligations under those Sections.
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 for 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
X
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
X
No
____
Indicate by check
mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition of
"accelerated filer and large accelerated filer" in Rule
12b-2 of the Exchange Act. (Check one):
Large accelerated
filer
___
Accelerated
filer
___
Non-accelerated
filer
X
Emerging growth
Company
___
If an emerging
growth company that prepares its financial statements in accordance
with U.S. GAAP, 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.
___
† The term
"new or revised financial accounting standard" refers
to any update issued by the Financial Accounting Standards Board to
its Accounting Standards Codification after April 5,
2012.
Indicate
by check mark whether the registrant has filed a report on and
attestation to its management's assessment of the
effectiveness of its internal control over financial reporting
under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b))
by the registered public accounting firm that prepared or issued
its audit report. ___
Indicate
by check mark which basis of accounting the registrant has used to
prepare the financial statements included in this
filing.
U.S.
GAAP
X
International
Financial Reporting Standards as issued by the International
Accounting Standards Board
___
Other
___
If
"Other" has been checked in response to the previous
question, indicate by check mark which financial statement item the
registrant has elected to follow.
Item
17
___
Item
18
___
If this is an
annual report, indicate by check mark whether the registrant is a
shell company (as defined in Rule 12b-2 of the Exchange
Act)
Yes
___
No
X
20-F for the year ended December 31, 2019
EXPLANATORY NOTE
This
Annual Report on Form 20-F for the fiscal year ended December 31,
2019 is being filed pursuant to the order of the Securities and
Exchange Commission contained in SEC Release No. 34-88465, dated
March 25, 2020 (the "Order"). We filed a Form 6-K on
April 28, 2020, prior to the original due date of the Form 20-F,
indicating our reliance on the relief granted by the
Order.
TABLE OF CONTENTS
PART I
ITEM
1.
IDENTITY
OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
4
ITEM
2.
OFFER
STATISTICS AND EXPECTED TIMETABLE
4
ITEM
3.
KEY
INFORMATION
5
ITEM
4.
INFORMATION
ON THE COMPANY
16
ITEM
4A.
UNRESOLVED
STAFF COMMENTS
26
ITEM
5.
OPERATING
AND FINANCIAL REVIEW AND PROSPECTS
26
ITEM
6.
DIRECTORS,
SENIOR MANAGEMENT AND EMPLOYEES
38
ITEM
7.
MAJOR
SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
47
ITEM
8.
FINANCIAL
INFORMATION
49
ITEM
9.
THE
OFFER AND LISTING
50
ITEM
10.
ADDITIONAL
INFORMATION
50
ITEM
11.
QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
60
ITEM
12.
DESCRIPTION
OF SECURITIES OTHER THAN EQUITY SECURITIES
60
PART
II
ITEM
13.
DEFAULTS,
DIVIDEND ARREARAGES AND DELINQUENCIES
61
ITEM
14.
MATERIAL
MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF
PROCEEDS
61
ITEM
15.
CONTROLS
AND PROCEDURES
61
ITEM
16A.
AUDIT
COMMITTEE FINANCIAL EXPERT
63
ITEM
16B.
CODE
OF ETHICS
63
ITEM
16C.
PRINCIPAL
ACCOUNTANT FEES AND SERVICES
63
ITEM
16D.
EXEMPTIONS
FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
63
ITEM
16E.
PURCHASES
OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED
PURCHASERS
63
ITEM
16F.
CHANGE
IN REGISTRANT'S CERTIFYING ACCOUNTANT
64
ITEM
16G.
CORPORATE
GOVERNANCE
64
ITEM
16H.
MINE
SAFETY DISCLOSURE
64
PART
III
ITEM
17.
FINANCIAL
STATEMENTS
64
ITEM
18.
FINANCIAL
STATEMENTS
64
ITEM
19.
EXHIBITS
65
3
FORWARD-LOOKING STATEMENTS
Except
for any historical information contained herein, the matters
discussed in this Annual Report on Form 20-F contain certain
"forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995 with respect to
our financial condition, results of operations and business. These
statements relate to analyses and other information which are based
on forecasts of future results and estimates of amounts not yet
determinable. These statements also relate to our future prospects,
developments and business strategies. These forward-looking
statements are identified by their use of terms and phrases such as
"anticipate", "believe",
"could", "estimate", "expect",
"intend", "may", "plan",
"predict", "will" and similar terms and
phrases, including references to assumptions. These forward-looking
statements involve risks and uncertainties, including current trend
information, projections for deliveries and other trend
projections, that may cause our actual future activities and
results of operations to be materially different from those
suggested or described in this Annual Report on Form
20-F.
These
risks include:
●
novel coronavirus
(2019-nCoV/COVID-19), and the potentially negative effects thereof
on the Company's workforce, its supply chain or demand for its
products our ability to generate sufficient ongoing cash flow from
operations or to raise adequate capital to allow NXT to grow the
business and continue operations;
●
the ability of
management to execute its business plan;
●
health, safety and
the environment (including risks related the novel
coronavirus);
●
the emergence of
alternative competitive technologies;
●
our ability to
protect and maintain our intellectual property and rights to our
SFD
®
technology;
●
our reliance on a
limited number of key personnel;
●
our reliance on a
limited number of aircraft;
●
our reliance on a
limited number of clients;
●
counterparty credit
risk;
●
foreign currency
and interest rate fluctuations;
●
changes in, or in
the interpretation of, laws, regulations or policies; and general
business, economic and market conditions (including global
commodity prices); and
●
other factors
described herein under "Risk Factors" (see Item 3.
D.).
If one
or more of these risks or uncertainties materialize, or if
underlying assumptions prove incorrect, our actual results may vary
materially from those expected, estimated or projected. Given these
uncertainties, users of the information included in this Annual
Report on Form 20-F, including investors and prospective investors,
are cautioned not to place undue reliance on such forward-looking
statements. We do not intend to update the forward-looking
statements included in this Annual Report on Form
20-F.
In this
Annual Report on Form 20-F, except as specified otherwise or unless
the context requires otherwise, "we",
"our", "us", the "Company", and
"NXT" refer to NXT Energy Solutions Inc. and its
subsidiaries. All references to "fiscal" in connection
with a year shall mean the year ended December 31.
All
financial information contained herein is expressed in Canadian
dollars ("Cdn$") unless otherwise stated.
PART I
ITEM 1.
IDENTITY
OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
This
Form 20-F is being filed as an annual report under the United
States
Securities Exchange Act of
1934
, as amended, (the "
U.S.
Exchange Act
") and, as such, there is no requirement to
provide any information under this item.
ITEM 2.
OFFER
STATISTICS AND EXPECTED TIMETABLE
This
Form 20-F is being filed as an annual report under the U.S.
Exchange Act and, as such, there is no requirement to provide any
information under this item.
4
ITEM 3.
KEY
INFORMATION
A.
Selected
financial data.
The
following historical financial information should be read in
conjunction with the section entitled "Operating and
Financial Review" (see Item 5 herein) and our audited
consolidated financial statements and related notes, which are
included elsewhere in this document. The consolidated statements of
income (loss) data for the years ended December 31, 2019,
2018, and 2017 and selected consolidated balance sheet data as of
December 31, 2019 and 2018 are derived from and qualified by
reference to, our audited consolidated financial statements that
are included elsewhere in this Form 20-F. The consolidated
statements of income (loss) data for the years ended
December 31, 2016 and 2015 and the selected consolidated
balance sheet data as of December 31, 2017, 2016 and 2015, are
derived from our previously filed audited consolidated financial
statements (which are not included in this Form 20-F).
INCOME (LOSS) & COMPREHENSIVE INCOME (LOSS)
(expressed in Canadian Dollars)
2019
2018
2017
2016
2015
Survey
revenues
$
11,976,149
$
-
$
-
$
1,447,269
$
17,422,151
Operating
expenses
Survey
costs
2,611,086
1,103,946
1,289,429
1,157,185
5,095,691
General
and administrative
3,497,785
3,999,089
4,960,961
5,645,459
5,049,690
Stock
based compensation expense
43,809
386,154
581,356
790,500
1,081,000
Amortization
expense
1,781,181
1,790,267
1,897,576
2,104,864
704,943
7,933,861
7,279,456
8,729,322
9,698,008
11,931,324
Other
expense (income)
Interest
expense (income), net
(20,684
)
(62,004
)
4,485
(17,254
)
(13,910
)
Foreign
exchange (gain) loss
233,231
(19,852
)
69,676
272,713
(712,480
)
Other
expense (income)
56,833
(43,428
)
91,370
218,853
529,081
Gain
on extinguishment of liability (Note 20)
-
(185,661
)
-
-
-
Increase
(decrease) in fair value of US$ Warrants
-
-
-
-
-
269,380
(310,945
)
165,531
474,312
(197,390
)
Income
(loss) before income taxes
3,772,908
(6,968,511
)
(8,894,853
)
(8,725,051
)
5,688,136
Income
tax expense (recovery)
-
-
75,545
374,511
(4,852,092
)
Net
income (loss) and comprehensive income (loss) for the
year
3,772,908
(6,968,511
)
(8,970,398
)
(9,099,562
)
10,540,228
Net
income (loss) per share - Basic
$
0.06
$
( 0.11
)
$
(0.16
)
$
( 0.17
)
$
0.22
Diluted
(1)
$
0.06
$
( 0.11
)
$
(0.16
)
$
( 0.17
)
$
0.21
Weighted
average # of common shares outstanding
Basic
68,156,059
65,455,325
54,523,113
53,562,155
47,782,647
Diluted
(1)
68,156,059
65,455,325
54,523,113
53,562,155
49,041,383
#
of common shares outstanding
64,406,891
68,573,558
58,161,133
53,856,509
53,306,109
(1)
In periods with a loss, the diluted total excludes the 8,000,000
convertible preferred shares which were outstanding until
converted
on
August 31, 2015, as their effect is anti-dilutive.
5
Balance Sheet Data
(expressed in Canadian Dollars)
2019
2018
2017
2016
2015
Working capital
(deficiency)
$
7,129,182
$
3,823,832
$
(318,166
)
$
1,703,510
$
7,534,128
Current
assets
8,445,904
4,365,970
1,284,008
2,316,341
10,691,918
Deposits
535,554
560,341
518,765
-
-
Property and equipment,
net
677,647
683,157
778,685
3,348,557
3,678,985
Right of use
assets
3,063,769
-
-
-
-
Intellectual property,
net
17,970,067
19,654,800
21,339,533
23,024,268
24,709,000
Total
assets
30,692,941
25,264,268
23,920,991
28,689,166
39,079,903
Current
liabilities
1,316,722
542,138
1,602,174
612,831
3,157,790
Long-term
liabilities
2,691,217
510,661
741,408
264,775
300,462
Total
liabilities
4,007,939
1,052,799
2,343,582
887,606
3,458,252
Shareholders'
equity:
Common
shares
95,313,064
96,656,248
88,121,286
85,966,393
85,051,553
Preferred
shares
-
-
-
-
-
Contributed
capital
$
9,306,493
$
9,262,684
$
8,195,075
$
7,613,719
$
7,239,089
Deficit
(78,645,489
)
(82,418,397
)
(75,449,886
)
(66,479,487
)
(57,379,926
)
Accumulated other
comprehensive income
710,934
710,934
710,934
710,935
710,935
Total
equity
26,685,002
24,211,469
21,577,409
27,811,560
35,621,651
Total liabilities and
equity
30,692,941
25,264,268
23,920,991
28,689,166
39,079,903
6
Throughout
the history of the Company there have been no dividends
declared.
B.
Capitalization
and indebtedness.
This
Form 20-F is being filed as an annual report under the U.S.
Exchange Act and, as such, there is no requirement to provide any
information under this item.
C.
Reasons
for the offer and use of proceeds.
This
Form 20-F is being filed as an annual report under the U.S.
Exchange Act and, as such, there is no requirement to provide any
information under this item.
D.
Risk
factors.
Investing
in our common shares involves a high degree of risk. In addition to
the other information included in this document, you should
carefully consider the risks described below before purchasing our
common shares. If any of the following risks actually occur, our
business, financial condition and results of operations could
materially suffer. As a result, the trading price of our common
shares could decline and you might lose all or part of your
investment.
Covid-19 (2019-nCoV/COVID-19)
Pandemic
The Covid-19
pandemic has not had a material effect on the operations of the
Company. The Company has made provisions so employees can work from
home, suspended all travel, mandated that international travelers
are to self-isolate for 14 days after return to Canada, and
implemented hygiene and social distancing policies. NXT continues
to communicate with employees and customers via available
communication methods such as tele-conferences and on-line video
conferencing.
Demand for our
services and prospective revenues may become adversely impacted the
longer the Covid-19 pandemic continues. The impact of the
continuation of the Covid-19 pandemic may hamper our ability to
deliver SFD
®
surveys
contracts in the following ways. If restrictions on international
travel continue, our aircraft and personal will not be able to
perform surveys. An outbreak of the virus among our staff or our
customers' personnel would delay any survey in progress.
Business development may be delayed when in-person meetings and
technical presentations may be a superior delivery method to
tele-conferences or on-line video conferencing.
Our ability to continue operating.
The
consolidated financial statements for December 31, 2019 have been
prepared on a going concern basis.  The going concern basis of
presentation assumes that NXT will continue in operation for the
foreseeable future and will be able to realize its assets and
discharge its liabilities and commitments in the normal course of
business.
NXT's
financial statements for December 31, 2018 included disclosure
related to the use of the "going concern" basis of presentation. In
2019, NXT has had positive cash flow from operations which has
resulted in a significant strengthening of the Company's liquidity
and working capital position. As a consequence, management is of
the view that removal of the "going concern" disclosure in respect
of its December 31, 2019 disclosure is warranted on the basis than
the Company currently has sufficient funds to maintain operations
for the next 12 months as of the date of the financial
statements.
In the
preparation of the December 31, 2019 financial statements,
management determined that there are no existing conditions or
reasonably foreseeable events that raise substantial doubt about
the Company's ability to continue as a going concern. However,
NXT's future financial results and its longer term success remains
dependent upon the ability to continue to attract and execute
client projects to build its revenue base. NXT continues to develop
its pipeline of opportunities to secure new revenue contracts.
However, the Company's longer-term success remains dependent upon
its ability to convert these opportunities into successful
contracts and to continue to attract new client projects and expand
the revenue base to a level sufficient to exceed fixed operating
costs and continue to generate positive cash flow from
operations.  The occurrence and timing of these events cannot
be predicted with certainty.
NXT's
cash and cash equivalents plus short-term investments at December
31, 2019 totaled $
6.64 million
.
Net working capital totaled $7.13 million.
As NXT
is operating on a going concern basis, NXT's short-term ability to
generate sufficient cash depends on the success of signing
contracts and receiving advance payments pursuant to the terms of
such agreements
.
NXT's
longer-term success remains dependent upon our ability to continue
to attract new client projects and expand the revenue base to a
level sufficient to exceed G&A expenses and generate excess net
cash flow from operations
. Proceeds
from past equity financings have been used to provide NXT with
funds to pursue, close and implement commercial transactions
currently in negotiation, develop additional revenue streams
including multi-client data sales and strategic partnerships and
for general corporate and net working capital
purposes.
7
Risks
related to having sufficient ongoing net working capital to execute
survey project contracts are mitigated through our normal practice
of obtaining advance payments and progress payments from customers
throughout the course of the projects, which often span three to
four months. In addition, where possible, risk of default on client
billings has been mitigated through the use of export insurance
programs offered by Export Development Canada.
In
2019, NXT continued to make progress in strengthening its liquidity
and net working capital by completing the Nigerian SFD
®
Survey and
reducing corporate costs by reducing the number of
staff
and by implementing
new human resource policies to reduce staffing costs.
As of the date of
this 20-F, NXT has sufficient funds to maintain its operations for
more than 12 months.
The Company does
not have provisions in its leases, contracts, or other arrangements
that would trigger additional funding requirements or early
payments.
The
financial statements rely upon estimates and assumptions that could
be incorrect.
The preparation of
financial statements requires our management to make estimates and
assumptions. These estimates and assumptions affect the reported
amounts of assets and liabilities including the disclosure of
contingent assets and liabilities as well as revenues and expenses
recorded in our financial statements. Estimates made relate
primarily to the measurement of accrued liabilities, stock-based
compensation expense, valuation of future income tax assets,
estimates for asset retirement obligations, the useful lives of
capital assets, and intellectual property.
The estimates and
assumptions are reviewed periodically and are based upon the best
information available to management; however, we cannot provide
assurance that future events will not prove that these estimates
and assumptions are inaccurate. Any revisions to our estimates and
assumptions may have a material impact on our future reported net
income or loss and assets and liabilities.
Volatility in oil and natural gas commodity prices may affect
demand for our services.
NXT's
customer base is in the oil and natural gas exploration industry,
which is exposed to risks of volatility in oil and natural gas
commodity prices. As such, demand for our services and prospective
revenues may become adversely impacted by ongoing declines in oil
and natural gas prices. The impact of price changes on our ability
to enter into SFD
®
survey
contracts cannot be readily determined. However, in general, if
commodity prices decline significantly, our opportunity to obtain
and execute SFD
®
survey
contracts will also likely decline, at least in the short
term.
Our financial position is affected by foreign currency
fluctuations.
We
currently conduct cash transactions and have holdings in Canadian
dollars, U.S. dollars and periodically have holdings of local
currency in other countries. We generally contract to earn revenues
in U.S. dollars and potentially may earn revenues in Canadian
dollars and other foreign currencies.
Our
reporting currency is in Canadian dollars. We currently do not
engage in currency hedging activities, but are reviewing
opportunities to do so. Our cash positions and potential foreign
currency revenue streams in currencies other than Canadian dollars
exposes NXT to exchange rate fluctuations between the Canadian
dollar and foreign currencies.
Our
financial position will be affected by exchange rate fluctuations.
We may earn revenue and incur expenses denominated in foreign
currencies, yet report our financial results in Canadian dollars.
Furthermore, we intend to enter into contracts to provide services
in foreign countries and may periodically conduct business in other
currencies such as the Euro. Changes in currency exchange rates
could have an adverse effect on the Company's business, financial
condition and results of operations.
8
Our net income or loss is impacted by interest rate
fluctuations.
We
periodically invest available cash in short term investments that
generate interest income that will be affected by any change in
interest rates. (See Item 11).
Availability of Aircraft.
In
April 2017, NXT completed a sale and leaseback agreement of its
aircraft with a Calgary based international aircraft services
organization (the "Lessor"). The terms of the agreement
resulted in NXT selling its 1997 Cessna Citation Ultra 560 jet
aircraft that was purchased in 2015. NXT has leased the aircraft
over an initial term of 60 months and retains all existing
operating rights and obligations. NXT is required to make monthly
payments to the Lessor of approximately US$39,500. NXT has the
option to extend the term of the lease by an additional two years.
Should NXT want to repurchase the aircraft at the end of the
initial lease term, the purchase price is US$1,450,000. When the
aircraft is not needed for use by NXT, we seek to earn charter hire
revenues from the aircraft through a 3
rd
party, Air
Partners.
Air
Partners also has access to an alternate, similar model aircraft
(certified for the use of our survey equipment) which could be
charter hired for use by NXT if needed.
In the
event that NXT's aircraft is not available (due to damage, a
need for extensive repairs, or other unforeseen events) to conduct
survey projects, there is a risk that suitable alternative aircraft
may not be available on a timely basis from other charter operators
when needed. This inability to conduct survey operations could have
a material adverse effect on the Company's business, financial
condition and results of operations.
We are a small business with limited personnel and our inability to
segregate duties between administrative staff is an internal
control weakness.
Certain
duties that are most appropriately segregated between different
employees are due to our current limited staff, assigned to one or
two individuals depending on the task.
Standard
internal control methodology involves the separation of
incompatible functions by assigning these functions to separate
individuals and in larger organizations to separate departments. We
often cannot allocate these functions to separate individuals
because our administrative staff is limited.
Although
we have adopted alternative control methods designed to compensate
for the reduced ability to separate incompatible functions, these
alternative controls are not effective and there is more than a
remote likelihood that our internal control over financial
reporting will not prevent or detect material misstatements if they
should exist in our financial statements. This lack of separation
of duties exposes NXT to potential misappropriation of funds,
embezzlement and other forms of fraud and could have a material
adverse effect on our business, financial condition and results of
operations. (see also Item 15).
9
If the
Company were to default on its office lease, the current month rent
plus the next three months become immediately due. If the Company
were to default on the aircraft lease, the Company would be
required to deliver the aircraft back to the Lessor.
We may periodically engage in transactions with related
parties.
We may
periodically enter into related party transactions with our
officers and directors. The most significant transaction was a
"Technology Transfer Agreement" (the "TTA")
that was executed on December 31, 2006 between NXT and Mr. George
Liszicasz, our CEO, President and Chairman wherein we issued
10,000,000 convertible preferred shares to him in exchange for the
rights to the SFD
®
technology for
use in hydrocarbon exploration. In 2013, a total of 2,000,000 of
these preferred shares were converted (on a one-to-one basis) into
common shares, and the remaining 8,000,000 preferred shares were
converted in August 2015. In addition to the related party
transactions discussed elsewhere herein (i.e. the Co-operation
Agreement, the Loan Arrangement and the Targeted Issuer Bid), one
of the members of NXT's Board, Thomas Valentine, is a partner in
the law firm Norton Rose Fulbright Canada LLP which provides legal
advice to NXT.
For a
full history of the TTA see also Item 4. part A, "Information
on the Company - History and development of the Company", and
Item 4. part B. "Information on the Company - Business
Overview – Technology Transfer Agreement".
Although
we manage this potential conflict of interest risk through
maintenance of a strong independent board of directors (the
"Board"), all related party transactions have the
potential for conflicts of interest that may compromise the ability
of Board members to exercise their fiduciary responsibility to NXT
shareholders.
For the
period December 1, 2017 to January 31, 2018, Mr. Selby acted as the
Interim CFO of the Company.
A single major shareholder who is also a Board member and an
officer of the Company retains the ability to influence or control
the Company, and this influence or control may result in a conflict
of interest.
Mr.
George Liszicasz, our CEO, is our largest shareholder and as of May
5, 2020 owns approximately 23% of our outstanding common shares and
therefore has a substantial influence in all shareholder
matters.
Controls
do exist to mitigate any potential risks associated with this
conflict of interest. Mr. Liszicasz adheres to a code of conduct
which includes a fiduciary responsibility to the Company, its
shareholders and this conduct is governed by the independent Board
of directors who collectively represent a majority of the Board.
Furthermore, all material related party transactions are disclosed
publicly.
However,
should these conflict of interest controls not be effective,
decisions could be made by the Company that may advantage Mr.
Liszicasz and negatively impact other shareholders.
Our rights to SFD
®
technology may
be challenged and we may need to defend our rights to the
technology in the courts.
Our
rights to ownership and use of SFD
®
technology
depended on Mr. Liszicasz having the lawful right to sell to NXT
the exclusive rights to exploit the SFD
®
technology for
the exploration of hydrocarbons as agreed to in the
TTA.
A risk
exists that an unknown party may claim some legal entitlement to
our intellectual property, our rights to commercialize this
intellectual property or our right to create SFD
®
devices and
processes. However, we believe that such a claim would be without
merit.
The
SFD
®
technology is an essential component of our business plan. If a
third party challenged our lawful entitlement to this technology,
the legal defense of our right to the technology may be expensive
and could cause a loss of our right to the SFD
®
technology, or
a protracted legal process to assert our right to the technology
would have a material adverse effect on the Company's business,
financial condition and results of operations.
10
We rely on specialized equipment, including a limited number of
SFD
®
sensors and this limitation may affect our ability to conduct
business.
We rely
on specialized data acquisition equipment, including a limited
number of SFD
®
sensor devices,
to conduct our aerial SFD
®
survey
operations. We would
be at risk if these survey sensors were to become damaged,
destroyed, worn out, stolen or in any way became unavailable for
use in operations prior to us creating and testing additional
sensors. Should the sensors become unavailable for any reason, our
ability to conduct surveys could be delayed for several months as
we built new sensors. During this period we may become unable to
satisfy contractual obligations, which may jeopardize future
revenue opportunities and may potentially result in a client
drawing on a contract performance bond posted by the Company or
otherwise making claims against the Company for breach of contract.
In addition, an inability to satisfy contractual obligations may
have an adverse effect on our developing reputation within the oil
and gas community.
NXT
seeks to mitigate this risk by researching new designs and
constructing additional SFD
®
sensor
devices.
As the Company is in the early commercialization phase,
SFD
®
surveys have not been tested over all potential geological
conditions. Some geological conditions may subsequently be proven
to be unsuited for SFD
®
surveys thereby
creating unforeseen limitations to the application of
SFD
®
surveys.
Any
limitation to the application of SFD
®
surveys has the
potential of restricting future revenue opportunities and if not
properly disclosed to industry clients, such limitations may impact
the reputation of the Company with these clients.
Unless we pursue ongoing technological improvement and development,
we may be unable to respond to changes in customer requirements or
new competitive technologies.
We must
continue to refine and develop our SFD
®
survey system
to make it scalable for growth and to respond to potential future
competitive pressures. These improvements require substantial time
and resources. Furthermore, even if resources are available, there
can be no assurance that the Company will be commercially or
technically successful in enhancing the technology. Our inability
to keep pace with new technologies and evolving industry standards
and demands could have a material adverse effect on our business,
financial condition and results of operations.
We rely on a limited number of key personnel who collectively
possess the knowledge and skills to conduct SFD
®
surveys and
interpret SFD
®
data as
required to meet contract obligations. Additional or replacement
personnel cannot be found and trained quickly. The loss of any of
these key persons or increased demand for our services from clients
could impair our ability to meet contract obligations, thereby
adversely impacting our reputation and our ability to earn future
revenue from clients.
We rely
on a limited number of key personnel who collectively possess the
knowledge and skills to conduct SFD
®
surveys and
interpret SFD
®
data as
required to meet contract obligations. Additional or replacement
personnel cannot be found and trained quickly. The loss of any of
these key persons or increased demand for our services from clients
could impair our ability to meet contract obligations, thereby
adversely impacting our reputation and our ability to earn future
revenue from clients.
The
Company's future success depends, to a significant extent, on the
continued service of its key technical and management personnel and
on our ability to continue to attract and retain qualified
employees. The loss of the services of our employees or a failure
to attract, retain and motivate qualified personnel could have a
material adverse effect on our business, financial condition and
results of operations. We do not have "key man"
insurance on any of our personnel.
The
Company put in place employment agreements with all of its
executive officers, including Mr. Liszicasz, its President and
CEO.
We have
a dependence on Mr. Liszicasz and three other staff members to be
involved in the
SFD
®
data
interpretation process and to continue to enhance our technology.
We are working to minimize dependency on key personnel. Mr.
Liszicasz has trained and continues to train a team of signal
interpreters to minimize our reliance on him to perform these
functions. Currently, a total of four persons, two of which are
highly experienced, are trained to interpret SFD
®
signals.
11
Although
we have engaged employees with suitable credentials to work with
Mr. Liszicasz to enhance our interpretation process and further
develop the SFD
®
technology, if
we are unable to reduce dependence on Mr. Liszicasz and he becomes
incapable of performing or unwilling to perform these functions,
then there may be an adverse effect on our ability to interpret the
data from SFD
®
surveys or to
enhance our technology.
Within
the province of Alberta, the skilled personnel that we require may
periodically be in short supply and there is specialized training
required that can take several months in order for a new employee
to become effective. If we cannot hire these key personnel, we have
inadequate time to train them or should we lose current personnel,
then our ability to accept contracts or meet contract commitments
may be adversely affected, thereby restricting our ability to earn
revenue.
Cyberattacks or other breaches of our technology hardware and
software, as well as risks associated with compliance and data
privacy could have an adverse effect on our systems, our service to
our customers, our reputation, our competitive position, and
financial results.
Our
ability to manage our operations successfully is critical to our
success. Our business relies on our ability to electronically
gather, compile, process, store and distribute data and other
information. Unintended interruptions or failures resulting from
computer and telecommunications failures, equipment or software
malfunction, power outages, catastrophic events, security breaches
(such as unauthorized access by hackers), social engineering
schemes, unauthorized access, errors in usage by our employees,
computer viruses, ransomware or malware, and other events could
harm our business.
In
April 2019, we were the target of a ransomware attack that involved
the infiltration and infection of our computer systems.  We
made no payments relating to the ransomware, and believe we lost no
data.  Following the ransomware incident, we began undertaking
remediation efforts and other steps to enhance our data security
infrastructure. In connection with these efforts, we have incurred
costs and expect to incur additional costs as we take further steps
to prevent unauthorized access to our systems and the data we
maintain.  We cannot provide any assurance that all potential
causes of the incident have been identified and remediated and will
not occur again.  While we have taken measures to minimize the
impact of these problems, the proper functioning of these systems
is critical to our business operations. Any security breach or
failure in our computer equipment, systems or data could result in
the interruption of our business operations and adversely impact
our financial results.
There is no certainty that an investor can trade our common shares
on public markets at a stable market price.
The
Company has historically had a limited public market for our common
shares on the TSX Venture Exchange (the "TSX-V"), and
the United States ("U.S.") OTC Markets Group's
Venture Stage Marketplace (the "OTCQB") and there is a
risk that a broader or more active public trading market for our
common shares will not develop or be sustained, or that current
trading levels will not be sustained. Effective March 22, 2016, the
Company's application to graduate from the TSX-V to the
broader Toronto Stock Exchange ("TSX"), Canada's
premier stock exchange listing, was approved.
The
market price for the common shares on the exchanges where our stock
is listed has been and we anticipate will continue to be, extremely
volatile and subject to significant price and volume fluctuations
in response to a variety of external and internal factors. This is
especially true with respect to emerging companies such as ours.
Examples of external factors, which can generally be described as
factors that are unrelated to the operating performance or
financial condition of any particular Company, include changes in
interest rates and worldwide economic and market conditions, as
well as changes in industry conditions, such as changes in oil and
natural gas prices, oil and natural gas inventory levels,
regulatory and environment rules and announcements of technology
innovations or new products by other companies. Examples of
internal factors, which can generally be described as factors that
are directly related to our consolidated financial condition or
results of operations, would include release of reports by
securities analysts and announcements we may make from time to time
relative to our operating performance, clients exploration results,
financing, advances in technology or other business
developments.
Because
we have a limited operating history and a limited history of
profitability to date, the market price for the common shares is
more volatile than that of a seasoned issuer. Changes in the market
price of the common shares, for example, may have no connection
with our operating results or the quality of services provided to
clients. No predictions or projections can be made as to what the
prevailing market price for the common shares will be at any time,
or as to what effect, if any, that the sale of shares or the
availability of common shares for sale at any time will have on the
prevailing market price. Given the relatively low historic trading
volumes, small trades of NXT's common shares can adversely
and potentially dramatically affect the market prices for those
shares.
12
Accordingly,
investors in our common stock should anticipate both volatile stock
price and poor liquidity unless these conditions
change.
You will be subject to the penny stock rules to the extent our
stock price on the OTCQB is less than $5.00.
Since
the common shares are not listed on a national stock exchange
within the United States, trading in the common shares on the OTCQB
is subject, to the extent the market price for the common shares is
less than $5.00 per share, to a number of regulations known as the
"penny stock rules". The penny stock rules, subject to certain
exemptions, require a broker-dealer to deliver a standardized risk
disclosure, the form of which is developed by the U.S. Securities
and Exchange Commission (the "SEC") to provide the
customer with additional information, including current bid and
offer quotations for the penny stock, the compensation of the
broker-dealer and its salesperson in the transaction, monthly
account statements showing the market value of each penny stock
held in the customer's account, make a special written
determination that the penny stock is a suitable investment for the
purchaser and to receive the purchaser's written agreement to the
transaction. To the extent these requirements may be applicable,
they will reduce the level of trading activity in the secondary
market for the common shares and may severely and adversely affect
the ability of broker-dealers to sell the common
shares.
You should not expect to receive dividends in the foreseeable
future.
We have
never paid any cash dividends on our common shares and we do not
anticipate that we will pay any dividends in the foreseeable
future. Our current business plan is to retain any future earnings
to finance the expansion of our business. Any future determination
to pay cash dividends will be at the discretion of our Board of
directors and will be dependent upon our consolidated financial
condition, results of operations, capital requirements and other
factors as our Board of directors may deem relevant at that
time.
Our right to issue additional capital stock at any time could have
an adverse effect on your proportionate ownership and voting
rights.
We are
authorized under our Articles of Incorporation to issue an
unlimited number of common shares and an unlimited number of
preferred shares. We may issue these shares under such
circumstances and in such manner and at such times, prices, amounts
and purposes as our Board of Directors may, in its discretion,
determine to be necessary and appropriate, subject to compliance
with all applicable exchange regulations and corporate and
securities laws. Proportionate ownership and voting rights of
common shareholders could be adversely affected by the issuance of
additional common shares which may result in common share value
dilution.
We may not be able to protect our trade secrets and intellectual
property from competitors who would use this knowledge to eliminate
or reduce our technological advantage.
Our
success and future revenue growth will depend, in part, on our
ability to protect our intellectual property ("IP"). We
have commenced an IP strategy process to obtain patents related to
the SFD
®
technology,
while also utilizing "trade secrets" protection of the
proprietary nature of our technology as applicable.
Initiatives
to expand and protect our IP (including patenting and new R&D
initiatives) have been very successful. Squire Patton Boggs LLP, a
U.S. based leader in IP protection, has been advising NXT on our IP
strategy, including the prior filing of an initial US provisional
patent application in May 2012. In November 2014, NXT filed a
related patent amendment submission in the US and since that time
has undertaken new patent applications in select strategic
international markets.
So far,
SFD
®
patents applications have been filed in nine (9) jurisdictions
worldwide.  Thus far seven (7) patents have been granted: two
(2) in U.S., and one (1) in each of the following countries:
Canada, Japan, China, Russia, and Mexico.
NXT has recently received confirmation of a patent
granted from the European Patent Office. This brings the total
number of countries granting the patent to 44. The final step is
for the validation process of the SFD
®
technology patent in select European
countries. This is expected to take several month to
complete.
The SFD
®
patents serve
an important purpose beyond the protection they provide to the
proprietary SFD
®
technology. Our
patents also serve as an independent third-party verification of
the scientific principles that form the basis of the
SFD
®
process and its application.
13
The
patent protection application process requires disclosure of at
least some aspects of our SFD
®
technology to
third parties and ultimately public disclosure. This disclosure
could significantly increase the risk of unlawful use of our
technology by third parties. Furthermore, we have no assurance
that, even if we seek patent protection, a patent could be
registered to protect our IP in all or any jurisdictions within
North America or other countries throughout the world. If
registered, there can be no assurance that it would be sufficiently
broad to protect our technology or that any potential patent would
not be challenged, invalidated or circumvented or that any right
granted thereunder would provide meaningful protection or a
competitive advantage to us. Finally, protection afforded by
patents is limited by the financial resources available to legally
defend IP rights. We currently do not possess the required
financial resources to fund a lengthy defense of our rights if
challenged by a much larger competitor or an oil and gas
company.
We do
enjoy common and contract law protection of our technology and
trade secrets. Employees and contractors are governed by
confidentiality agreements as well as a fiduciary responsibility to
protect our technology, supporting documentation and other
proprietary information.
Our
strongest protection of the SFD
®
technology
comes from restricting access to knowledge concerning the
technology. Only a very limited number of NXT personnel have access
to or knowledge of the underlying SFD
®
technology and
no one employee and only one officer has access or knowledge of all
aspects of the SFD
®
system. Currently, no third party has any significant knowledge of
the technology. As further protection,
SFD
®
equipment does not leave the direct control of NXT employees,
thereby preventing unauthorized replication of the
equipment.
The
Company reassesses the appropriateness of its IP protection
strategy on an ongoing basis and seeks advice from IP advisors as
necessary.
It is
possible that a third party will copy or otherwise obtain and use
the Company's technology without authorization, develop a similar
technology independently or design around the Company's secrets.
Accordingly, there can be no assurance that the steps taken by the
Company to prevent misappropriation or infringement of our IP will
be successful.
An
inability to protect our IP would make it possible for competitors
to offer similar products and services that could have a material
adverse effect on our business, financial condition and results of
operations.
We experience operational hazards in our flight operations that may
subject us to potential claims in the event that an incident or
accident occurs.
We
experience operational hazards in our flight operations that may
subject us to potential claims in the event that an incident or
accident occurs.
The
flight operations of SFD
®
surveys are subject to the hazards associated with general flight
operations. An aircraft accident may cause personal injury and loss
of life, as well as severe damage to and destruction of property or
the SFD
®
sensors and related equipment.
Independent
third parties provide all the services required to maintain and
operate the aircraft; they bear the primary risks of flight
operations. These services are provided by an organization
accredited by Transport Canada to operate aircraft in accordance
with Transport Canada approved and audited operating procedures.
The aircraft operator employs the required pilots, aircraft
maintenance engineers and support personnel and ensures that they
operate within their Transport Canada operating certificate. Our
employees do not perform any airworthiness or flight safety
operations.
We
require the flight contractor to maintain appropriate insurance
coverage for the risks associated with aircraft operations and we
obtain insurance coverage to provide us with additional risk
protection. In addition, we maintain general business insurance
coverage, and believe that this insurance and the policy limits are
appropriate for the operational risks that we incur.
14
Despite
our policy to not operate the aircraft directly and our insurance
coverage, we cannot avoid or alternatively be insured for all risks
of flight operations. In the event of an incident or accident we
may be sued by injured parties in excess of our policy limits or
for damages that are not covered by our insurance policy. The
magnitude of a lawsuit of this nature is not determinable.
Furthermore, to the extent that our SFD
®
equipment is damaged, we may be unable to conduct SFD
®
surveys for several months following an accident.
We are a Canadian Company and our nationality may impair the
enforceability of a judgment for any person resident outside
Canada.
Since
we are a Canadian company and most of our assets and key personnel
are located in Canada, you may not be able to enforce a U.S.
judgment for claims you may bring against us, our assets, our key
personnel or many of the experts named in this document. This may
prevent you from receiving compensation to which you may otherwise
have a claim.
We are
organized under the laws of Alberta, Canada and substantially all
of our assets are normally located in Canada. In addition, all but
two of our current members of our Board of directors and all of our
officers are residents of Canada. As a result, it may be impossible
for you to affect service of process upon us or these individuals
within the U.S. or to enforce any judgments in civil and commercial
matters, including judgments under U.S. federal securities laws. In
addition, a Canadian court may not permit you to bring an original
action in Canada or to enforce in Canada a judgment of a U.S. court
based upon civil liability provisions of the U.S. federal
securities laws.
We conduct operations in foreign countries, which exposes us to
several risks that may have a material adverse effect on the
Company.
We
conduct operations in foreign countries, which exposes us to
several risks that may have a material adverse effect on the
Company.
Criminal
Activity and Social Instability – We have operated in the
past in foreign countries such as Colombia, which over the past two
decades experienced significant social upheaval and criminal
activity relating to drug trafficking, kidnapping and terrorist
acts. While the situation has improved dramatically in recent
years, there can be no guarantee that the situation will not
deteriorate again, nor are these risks eliminated as yet.
Furthermore, other potential international survey locations may
have similar or other indeterminate criminal or social instability
risks.
Systemic
criminal activity in a country or isolated criminal acts may
disrupt operations, impact our ability to earn revenue,
dramatically add to our cost of operations or potentially prevent
us from earning any survey revenue in a country.
In
addition, foreign markets may be susceptible to a higher risk of
corruption and bribery. All of NXT's employees, contractors
and independent sales agents are required to adhere to the
Company's code of conduct and business ethics, which
prohibits illegal activities, including any acts of bribery or
corruption.
Political
Instability - Any changes in regulations or shifts in political
attitudes are beyond the control of the Company and may adversely
affect our business. Exploration may be affected in varying degrees
by government regulations which have the effect of restricting
exploration and production activities. These changes may adversely
impact the laws and policies governing price controls, export
controls, foreign exchange controls, income taxes, expropriation of
property, environmental legislation, site safety or other
areas.
Currently,
there are no restrictions (other than the payment of local
with-holding taxes) on the repatriation back to Canada of our
earnings in foreign countries in which we have operated, such as
Colombia and Bolivia; however, there can be no assurance that
significant restrictions on repatriation to Canada of earnings will
not be imposed in the future.
Our
operations may also be adversely affected by changes in laws and
policies in Canada impacting foreign travel and immigration,
foreign trade, taxation and investment.
Commercial
Disputes – While operating in a foreign country, we are
subjected to local commercial laws which often involve executing
contracts in a foreign language. Although every effort is made to
ensure we have access to an accurate English translation,
misunderstanding and potential disputes between parties may
arise.
15
In the
event of a dispute arising in connection with our foreign
operations for any reason, we may be subject to the exclusive
jurisdiction of foreign courts or may not be successful in
subjecting foreign persons to the jurisdictions of the courts of
Canada or enforcing Canadian judgments in such other jurisdictions.
We may also be hindered or prevented from enforcing our rights with
respect to a government instrumentality because of the doctrine of
sovereign immunity.
Accordingly,
these risk factors have the potential of adversely reducing the
level of survey revenue from our clients, our ability to operate
effectively or our ability to be paid for our services and may have
a material adverse effect on our financial position.
Where
possible, NXT utilizes risk mitigation products offered by entities
such as Export Development Canada ("EDC"). EDC
financial products include insurance coverage of contract accounts
receivable, guarantee support for contract performance bonds and
wrongful call insurance for such bonds.
We rely upon the right to conduct airborne surveys in foreign
countries. These foreign operations expose us to the risks that we
will be prevented from conducting surveys when requested by
clients.
The
operation of our business, namely conducting aerial SFD
®
surveys and interpreting SFD
®
data, is not subject to material governmental or environmental
regulation in Canada and the United States with the exception of
flight rules issued by Transport Canada and the U.S. Federal
Aviation Administration ("FAA") governing the use of
commercial aircraft, including rules relating to low altitude
flights. The requirements in other countries vary greatly and may
require permits and/or provide other restrictions to conducting
flight operations in the country that may restrict our ability to
perform SFD
®
surveys.
For
example, in South American countries in which we have operated,
such as Colombia and Bolivia, SFD
®
surveys must comply with additional requirements not encountered in
Canada and the United States, including customs obligations and
bonds related to the importation and exportation of the aircraft
into the country, obtaining permits from the local aviation
authority and obtaining permits from the local Air Force. We have
successfully operated in South America and other global regions in
accordance with these typical requirements.
With
our North America and International experience to date, we do not
anticipate any government controls or regulations that will prevent
timely completion of SFD
®
surveys. However, we may encounter government restrictions in other
countries that may impact or restrict our ability to conduct
surveys.
If we
encounter government regulation and restrictions that impact or
prevent us from conducting surveys in any country, then we will not
be able to earn revenue in the country and we may be exposed to
forfeiting any performance bonds which may have been
issued.
We caution that the factors referred to above and those referred to
as part of particular forward-looking statements may not be
exhaustive and that new risk factors emerge from time to time in
our rapidly changing business environment.
ITEM 4.
INFORMATION
ON THE COMPANY
A.
History
and development of the Company.
We are
a technology company focused on providing a service to oil and
natural gas exploration clients using our proprietary
SFD
®
remote sensing airborne survey system. SFD
®
and
NXT
®
are both registered trademarks of NXT Energy Solutions
Inc.
16
NXT's
corporate history is summarized as follows:
●
NXT was
incorporated under the laws of the State of Nevada on September 27,
1994 as Auric Mining Corporation.
●
In January 1996,
NXT acquired all of the common stock of NXT Energy USA, Inc. (which
was then known as Pinnacle Oil Inc.) from its shareholders in
exchange for common shares. As a consequence of this reverse
acquisition, NXT Energy USA Inc. became a wholly owned subsidiary
and its shareholders acquired a 92% controlling interest in
NXT's common shares.
●
Prior to this
reverse acquisition transaction, NXT was a corporate shell
conducting no active business, and NXT Energy USA Inc. was a
development stage research and development enterprise holding the
worldwide rights to use what is now our SFD
®
technology for hydrocarbon exploration purposes.
●
Shortly thereafter,
on February 23, 1996 we changed our name to Pinnacle Oil
International, Inc. and on June 13, 2000, subsequently changed our
name to Energy Exploration Technologies.
●
On October 24,
2003, our shareholders approved the continuance of the Company from
the State of Nevada to the Province of Alberta, Canada under the
Business Corporations Act (Alberta) (the "ABCA"). Also,
our name was modified to Energy Exploration Technologies Inc.
("EETI").
●
On September 22,
2008 EETI changed its name to NXT Energy Solutions Inc. by way of
Articles of Amendment filed pursuant to the ABCA.
Our
registered office is located at 302, 3320 –
17
th
AVE
SW, Calgary, Alberta, Canada, T3E 0B4 and our telephone number is
(403) 264-7020.
We are
a reporting issuer in Alberta, Ontario, and British Columbia and
are principally governed by the Alberta Securities Commission in
accordance with the
Securities Act
(Alberta)
and the
Business
Corporations Act (Alberta).
We are a foreign private issuer
under United States securities laws and are subject to the
regulation of the US Securities in accordance with the Exchange
Act.
The
underlying technology employed by our SFD
®
survey system was invented by Mr. Liszicasz, our President and CEO,
chairman and largest shareholder. The technology was initially
licensed to the Company by Mr. Liszicasz until December 31, 2006
through a series of consecutive license agreements. On December 31,
2006, we obtained the rights to the technology from Mr. Liszicasz
pursuant to the terms of the TTA.
Upon
execution of the TTA, Mr. Liszicasz transferred to us all his
rights and entitlements to the SFD
®
technology for
use in the field of hydrocarbon exploration.
SFD
®
technology for the purposes of the TTA is defined as the theories
of quantum physics and engineering which are utilized in the
operation of stress field detectors used by NXT for the reception,
collection and recording of subsurface geological stresses for
hydrocarbon exploration.
Our
business does not normally rely on significant capital expenditures
other than period regulatory additions for the aircraft. As
described in below in "
Property and equipment and related
amortization expense"
a significant expenditure was
incurred for acquiring and installing in its aircraft a new
transponder technology known as ADS-B. For 2020 we do not
anticipate further significant upgrades for the aircraft. For the
last three fiscal years, the Company made capital expenditures for
property and equipment of $216,691 (2019), $10,006 (2018), and
$8,727 (2017). These annual expenditures normally relate largely to
upgrades to office computer equipment and SFD
®
survey equipment.
The
Company does not currently have any significant capital
expenditures in progress, or planned for the short term, for Canada
or other international operations.
SEC
maintains an internet site (http://www.sec.gov), which contains
reports, proxy and information statements, and other information
regarding NXT that we file electronically with the SEC. Our website
is http://www.nxtenergy.com.
17
B.
Business
overview.
Description of the nature of the Company's operations and
principal activities
We
utilize our proprietary, airborne SFD
®
survey system to provide a service for the oil and gas exploration
industry. NXT provides a rapid and cost-effective method for our
clients to evaluate large land areas for their exploration
potential.
The
underlying technology employed by our SFD
®
survey system was invented by Mr. Liszicasz, our President and
Chief Executive Officer ("CEO"), Chairman and one of
our largest shareholders. The technology was initially licensed to
the Company by Mr. Liszicasz until December 31, 2006 through a
series of consecutive license agreements. On December 31, 2006 we
obtained the rights to the technology from Mr. Liszicasz pursuant
to the terms of a Technology Transfer Agreement
("TTA").
Upon
execution of the TTA, Mr. Liszicasz transferred to NXT all his
rights and entitlements to the SFD
®
technology for use in the field of hydrocarbon
exploration.
For
further details of the TTA, see "Section 10.1"
below.
SFD
®
technology for the purposes of the TTA is defined as the theories
of quantum physics and engineering which are utilized in the
operation of stress field detectors used by NXT for the reception,
collection and recording of subsurface geological stresses for
hydrocarbon exploration.
SFD
®
sensors remotely respond to gravity perturbations and changes in
subsurface stress regimes that are meaningful for oil and gas
exploration. These responses are captured as raw data that when
interpreted, can provide an indirect method to detect the presence
of geological features such as structures, faults, fractures and
reefs that are often associated with traps and reservoir
accumulations. SFD
®
is highly effective in frontier and under-explored areas, in
offshore or onshore environments and over any terrain. The
SFD
®
survey system has been demonstrated to quickly focus exploration
resources, offering the benefit of reducing the risk, time and
expense associated with frontier exploration.
Following
completion of the aerial surveys, we deliver to our clients a
detailed report and maps of the surveyed area that identifies,
ranks and recommends areas with SFD
®
indications of reservoir potential.
In
2006, we commenced our current business model and began providing
SFD
®
survey services to clients on a fee-for-service basis. In
accordance with this model, we have not invested either directly or
indirectly in exploration or development wells or engaged in other
exploration or production activities. Our current business model
minimizes our capital requirements, thereby conserving cash and
minimizes any perceived or real conflicts between the interests of
NXT and its survey clients.
NXT's
primary business model is to earn revenues by conducting
SFD
®
surveys for clients on a fee-for-service basis. Secondly, we may be
able to negotiate to earn revenue from gross overriding royalty
income and/or other incentive fees from clients should they
generate production on areas recommended by SFD
®
surveys. Finally, in the future, we may earn a fee by providing
other related geological and geophysical integration services to
clients.
We also
continue to utilize high quality local sales representatives with
key knowledge of their respective areas, potential clients and the
exploration potential of a region allowing NXT to cover larger
areas and more clients with minimum fixed cost. Our sales
representatives continue to pursue SFD
®
opportunities in numerous regions including Latin America, the
Middle-East and Southeast Asia. Furthermore, to ensure our sales
representatives follow industry best practices, each representative
is required to annually certify they adhere to NXT's code of
conduct and business ethics.
In
support of these sales efforts, NXT has also been effective in
positioning the SFD
®
method as an established geophysical tool for oil & gas
exploration following the successful completion of projects in
Latin America (Bolivia and Mexico) with the publication of
technical papers and the creation of project case studies. In
addition, NXT has now been granted patents or received patent
allowance in 48 separate countries.
18
Our
overall objective remains to continue to increase industry
awareness and appreciation of the value of our SFD
®
survey system and our strategy to achieve this includes maximizing
client endorsement opportunities (such as through joint case
studies) and targeting the most appropriate markets (i.e. where
SFD
®
provides the maximum benefits). Our specific tactics
include:
1.
Focus sales
resources on high profile primary markets which offer the maximum
opportunity for success;
2.
Build upon success
in this initial market, and step out to other markets in Latin
America, and in South Asia;
3.
Pursue requests of
interest from qualified potential client "bluebirds" from all other
locations in the world. The bluebird model is defined as an
opportunity that arises, not from deliberate targeted sales
initiatives, but in response to unsolicited client
enquiries;
4.
Continue to conduct
pilot surveys to expand our knowledge base and provide
documentation to support the use of SFD
®
in new applications. Each new application opens more market
opportunities and provides valuable case studies to support our
sales initiatives; and
5.
Respond to
opportunities to present at technical conferences, publish papers
in periodicals and generally maximize our opportunities to educate
the industry on SFD
®
capabilities and document case study successes.
We
continue to progress and grow our project pipeline on a Fee for
Survey Project basis. NXT has concurrently sought the development
of an alternative business line though the sale of
"Multi-Client Datasets" focused on IOCs and the
development of their global exploration strategies. The purpose of
this strategy has been to integrate our SFD
®
technology into the standard exploration process of such
organizations. We believe this approach will be instrumental in
helping NXT to build an independent and steady backlog of smaller
scale data sales enabling us to enhance and smooth our revenue flow
while we continue to execute on larger Fee for Survey
Projects.
Description of the principal markets in which the Company
competes
We have
an opportunity to provide our services in any region of the world
where oil and gas exploration activities are conducted. However, we
choose to be strategic and focus our limited marketing and sales
resources in a limited number of markets in the early stages of
commercialization.
A
summary of revenues derived in our primary geographic market
segments for the last 3 fiscal years, and highlights of global
survey operations, follows:
Year ended December 31
2019
2018
2017
African
and Middle East Markets
$
11,976,149
$
-
$
-
South
and Central America
-
-
-
North
America
-
-
-
$
11,976,149
$
-
$
-
North America Market
In
February 2019, NXT entered into a Co-operative Agreement with one
of its largest shareholders, Alberta Green Ventures Limited
Partnership ("AGV"), to propose up to three
SFD
®
surveys within two years. The Co-operative Agreement is based on a
cost plus formula and a gross overriding royalty interest in oil
and gas production arising on lands subject to the
surveys.
Under
the Co-operative Agreement, NXT and AGV will consider at least two
SFD
®
surveys in North America and an additional SFD
®
survey internationally. The first SFD
®
survey was contemplated to be completed by August 31, 2019 and the
fees payable by AGV are partially secured by a US$100,000
non-refundable deposit. NXT has granted AGV an extension of the
August 31, 2019 requirement under the Co-operation Agreement to
complete at least one of three SFD
®
survey to June 30, 2020. If the survey is not completed by June 30,
2020, the non-refundable deposit will be forfeited to NXT. AGV has
committed to completing an exploration drilling program on each of
the lands subject to the SFD
®
surveys within two years of completion of the surveys.
19
Latin America and Central America Markets
NXT
completed the data acquisition and interpretation of 37,596 line-km
for the first ever SFD
®
Multi-Client survey in the Gulf of Mexico in June 2017. The
airborne survey was conducted over the area that was identified by
National Hydrocarbon Commission ("CNH") for the shallow
water bid round 2.1 covering the Tampicao-Misantla, Veracruz and
Cuencas del Sureste exploration areas. The survey data provides
100% grid coverage over the offshore blocks offered in Bid Round
2.1, an area of approximately 8,900 square kilometers and was
completed ahead of time and budget. In addition, NXT acquired
incidental data over many of the 35 blocks offered in the recently
concluded Bid Round 3.1. Based on the Five-Year Tender Program for
the Exploration and Extraction of Hydrocarbons 2015 - 2019 by the
Mexican Secretary of Energy, much of the remaining data will also
be applicable to future Bid Rounds. To date, there have been no
sales of this proprietary data.
Recently
with respect to our 2017 SFD
®
Gulf of Mexico survey over the 2.1 bid-round offshore blocks, a
lead area, indicated by SFD
®
as prospective, has now been drilled by third parties and the
results confirm that it is a commercial discovery with early
estimates of volumes greater than 200 million barrels of oil
equivalent ("MMBOE"). Additionally, and perhaps more
importantly, from a capital expenditure allocation perspective,
another seismic prospect, considered non-prospective by NXT, was
drilled as part of the same campaign and was declared unsuccessful.
The announcements concerning these drilling activities was reported
by internationally recognized upstream data providers starting late
2019. The SFD
®
data for the 2.1 bid-round offshore blocks was submitted to and has
been available from the CNH of Mexico since mid-2018. These results
highlight the value of adding SFD
®
to an upstream work program and evidences the efficacy of our
geophysical method in recommending prospects with potential for
hydrocarbon traps. Drilling activities over SFD
®
recommendations are ongoing in numerous countries.
Asia Markets
In
October 2018, we signed an MOU with BGP Inc., a subsidiary of China
National Petroleum Corporation, to further explore opportunities
for NXT and BGP Inc. to work together. NXT's forward strategy
is to secure SFD
®
contracts with BGP and its affiliates. In addition a distribution
agreement has been signed for Malaysia.
African and Middle East Markets
In
March 2019, the Company signed an US$8.9 million contract with PE
to provide 5,000 line kilometers of SFD
®
surveys
in Nigeria. As the Nigerian SFD
®
Survey was the Company's first project in Africa, the Company was
required to deliver more than 10,000 pages of documents to NNPC and
the Department of Petroleum Resources, a department under Nigeria's
Ministry of Petroleum Resources, and complete a test flight as part
of the qualification process which took seven months. Data
acquisition operations were completed on May 1, 2019 and NXT's
recommendations were delivered in the third quarter of
2019.
Prior to entering into the
Nigerian SFD
®
Survey
contract with PE, the
Company
conducted significant due diligence to ensure it
understood the business environment in Nigeria and was in
compliance with applicable laws in each of Canada, the United
States of America and Nigeria. The Company also engaged Norton Rose
Fulbright Canada LLP and Kreller Group as advisors to provide
guidance and to ensure the integrity of its contract with PE, as
well as PE's contract with NNPC.
The
Company has received payments of US$8.4 million for the Nigerian
SFD
®
Survey as at the date hereof. The contracted holdback amount of
approximately US$0.5 million is should be paid to the Company upon
the conclusion of negotiations for additional work under the
current contract framework.
The
Department of Petroleum Resources (the "DPR"), a department under
the Federal Republic of Nigeria's Ministry of Petroleum Resources
responsible for the sustainable development of Nigeria's oil and
gas resources, provided written confirmation of their
recommendation in favour of NXT's SFD
®
technology based on the recent survey results, noting specifically
"in line with federal government aspiration to increase its Oil and
Gas reserves base at a considerable reduced cost, risk and optimize
exploration cycle, the Stress Field Detection SFD
®
technology is hereby adopted and recommended to be deployed as an
independent data exploration tool for hydrocarbon exploration to
identify and rank prospect-level leads to focus exploration efforts
in the Nigerian Oil and Gas industry".
20
In
March 2020, the Company signed a memorandum of understanding with
an independent oil company with interests in East-Central
Africa.
Notes Receivable
In
September 2019, NXT advanced to AGV US$250,000 ("the
Principal Amount"), as evidenced by, and governed in
accordance with the terms of, a promissory note dated September 6,
2019 (the "Notes Receivable"), for the purpose of providing AGV
with additional funds necessary to continue advancing the common
objectives of NXT and AGV under the Co-operation Agreement (the
"Loan Arrangement"). Pursuant to the Notes Receivable,
it was agreed and acknowledged, among other things,
that:
a)
AGV was indebted to the
Company and unconditionally promised to pay to, or to the order of,
the Company on or before December 15, 2019 (the
"
Repayment
Date
"
), the Principal Amount
together with all interest payable at a rate of the greater of 2%
and the rate prescribed under the
Income
Tax Act
(Canada) from time to
time in monthly arrears on the first day of each month commencing
October 1, 2019 until the repayment of the Principal Amount in full
(the
"
Interest
"
);
b)
AGV had the right and privilege of prepaying the whole or any
portion of the Principal Amount together with the Interest at any
time or times without notice, bonus or penalty; and
c)
NXT, in its sole and
absolute discretion, was entitled to elect to receive any payment
made by AGV in accordance with the Notes Receivable by way of, in
whole or in combination: (i) wire transfer or other immediately
available funds (
"
Cash
"
),
or (ii) delivery for cancellation to the Company of the equivalent
number of Common Shares having a fair market value equal to the
aggregate of such amounts, calculated using the volume weighted
average price of the Common Shares as reported and traded on the
Toronto Stock Exchange for the five trading days immediately
preceding the repayment date (the
"
5-day
VWAP
"
).
On
December 13, 2019, the last business and trading day before the
Repayment Date, the Company elected to receive and directed AGV
to:
a)
in respect of the Principal Amount, deliver to the Company for
cancellation 543,673 Common Shares, calculated as the product of
US$250,000 being the Principal Amount owing on the last business
day before the Repayment Date, and 1.3183, being the daily average
US$/CDN$ exchange rate as quoted on the Bank of Canada's website
for December 13, 2019, the last business day for which a daily
average exchange rate was published before the Repayment Date,
divided by $0.6062, being the 5-day VWAP, the delivery of such
Common Shares to occur subject to and only upon receipt of
confirmation from the Company that all necessary regulatory
approvals had been received; and
b)
in respect of the Interest, pay US$1,366.12 by way of Cash. AGV
paid this amount.
On
April 13, 2020, NXT issued a Direction to Pay to AGV in which NXT
has revoked the previous Direction to Pay dated December 13, 2019,
and has now directed AGV to deliver US$250,000 as repayment on the
Principle Amount. Interest will begin to accrue until the date on
which payment in full of all amounts owing pursuant to the
Principle Amount are received by NXT.
The
Company may change its election if it so decides, in its sole and
absolute discretion to receive the Principal Repayment by way of
Common Shares by application to the Alberta Securities
Commission.
21
Description of seasonality of the Company's main
business
There
is no seasonality to our business. NXT does however, have a very
cyclical business, as revenue activity is dependent upon the level
of capital investment in exploration drilling in the oil & gas
industry and the size and timing of a limited number of survey
contracts each year.
Description of the sources and availability of raw
materials
We do
not foresee any constraints upon materials or equipment that will
impede our ability to execute our business plan or affect our
ability to conduct and/or expand our business. Our main direct
project input costs are aircraft operating costs and data
interpretation staff. None of these expenses have been subject to
significant price volatility.
In
order to conduct our survey operations, we require the
following:
●
Survey aircraft
– Historically, we have both owned aircraft and chartered
aircraft from independent charter aircraft companies. From 2009 to
December 2015, we utilized an aircraft charter agreement with Air
Partners, a Calgary-based air-charter operator, to provide
aircraft, crew and maintenance services for our survey operations
worldwide In December 2015, we acquired from Air Partners a jet
aircraft which was previously charter hired to NXT. In April 2017,
NXT completed a sale and leaseback agreement of its aircraft with a
Calgary based international aircraft services organization. The
terms of the agreement resulted in NXT selling its' 1997
Cessna Citation Ultra 560 jet aircraft. We currently rely on Air
Partners as the manager / operator of the aircraft which we use in
SFD
®
survey operations.
●
SFD
®
sensors
- All of the survey sensors are manufactured in-house. Certain
machining is required by third party machine shops, with final
assembly performed by our technical staff. The sensors, once
assembled, require flight testing prior to being considered
acceptable for operational use. Not all sensors meet the
performance criteria for operational use; however, we have
demonstrated our ability to manufacture new functional
SFD
®
sensors.
●
SFD
®
assembly
- The units in which the sensors are incorporated are custom
designed, fabricated and assembled in-house or through
subcontracted vendors. We utilize the services of Transport Canada
approved Design Approval Representatives to prepare subsequent type
certificates ("STC") for the installation of our
SFD
®
units in each aircraft that we utilize for surveys. The time to
obtain an STC approval for the installation of our SFD
®
units into any proposed aircraft type may require several
months.
●
Computer hardware and
software
- (
Data
Acquisition System, SFD
®
Signal Conditioning Unit
, and data
Interpretation software).
During 2016,
a new data acquisition system completed final testing. The software
was developed by in-house personnel and will be utilized on future
surveys. The hardware we use in our SFD
®
survey systems (other than the SFD
®
unit), and the balance of the computer software we use, are all
readily available from retail or wholesale sources.
We are
not dependent upon any other third-party contract manufacturers or
suppliers to satisfy our technology requirements.
Description of marketing channels
We
largely use direct sales methods with use of independent
commissioned sales representatives in international
markets.
Summary information on dependence on patents, licenses and
contracts
Patents
In May
2012, we commenced a "provisional" patent application
process in the U.S. and formally filed a patent on May 22, 2013,
which was subsequently published on November 28, 2013. We intend to
continue expanding the process with additional formal patent
applications in the future. We understand that our right to patent
the SFD
®
technology is not compromised by our ongoing commercial use of the
technology, as the components of the SFD
®
technology have never been disclosed to third parties (except under
very limited and confidential terms) or released in any manner into
the public domain.
22
Initiatives
to expand and protect our IP (including patenting and new R&D
initiatives) were very successful in 2017. Squire Patton Boggs LLP,
a U.S. based leader in IP protection, has been advising NXT on our
IP strategy, including the prior filing of an initial US
provisional patent application in May 2012. In November 2014, NXT
filed a related patent amendment submission in the US and since
that time has undertaken new patent applications in select
strategic international markets.
SFD
®
patents have been granted in Russia (January 2017), Japan (July
2017), Canada (August 2017), Mexico (September 2017), U.S.
(November 2017 and September 2018), China (April 2018), and
European Patent Office consisting of 38 member states (January
2020). These are areas of prime commercial focus for the
Company.
So far, the
total number of countries granting the patent has reached 44. 
The immediate next step is the validation of the patents in select
European countries.  This process is expected to take several
month to complete.
Our
patents serve an important purpose beyond the protection for the
proprietary SFD
®
technology.
They also provide multiple independent
third-party recognitions of the technological invention in terms of
the practical applicability, conceptual novelty, and knowledge
advancement.
Basis for statements made
regarding
competitive position
Our
SFD
®
airborne survey service is based upon a proprietary technology,
which is capable of remotely identifying, from a survey aircraft,
subsurface anomalies associated with potential hydrocarbon traps
with a resolution that we believe is technically superior to other
airborne survey systems. To our knowledge there is no other company
employing technology comparable to our SFD
®
survey system for oil and natural gas exploration.
Seismic
is the standard technology used by the oil & gas industry to
image subsurface structures. It is our view that the
SFD
®
survey system is highly complementary to seismic analysis. Our
system may reduce the need for seismic in wide-area reconnaissance
but will not replace the role of seismic in verifying structure,
closure and selecting drilling locations. The seismic industry is
very competitive with many international and regional service
providers.
The
SFD
®
system can be used as a focusing tool for seismic. With an
SFD
®
survey a large tract (i.e. over 5,000 square kilometers) of land
can be evaluated quickly to identify locations with indications of
reservoir potential. Seismic surveys, although effective in
identifying these locations, are much more expensive, require
significantly more time and impose a much greater negative impact
on local communities and the environment. An SFD
®
survey deployed first can provide necessary information to target a
seismic program over a limited area of locations selected by
SFD
®
.
This approach can result in a more effective seismic program and
reduce the overall cost, time, community resistance and
environmental impact required to locate and qualify a
prospect.
The
industry uses other technologies for wide area oil and natural gas
reconnaissance exploration, such as aeromagnetic and gravity
surveys. These systems can provide regional geological information,
such as basement depth, sedimentary thickness and major faulting
and structural development; however, these other airborne
techniques are not as suitable for identifying areas with reservoir
potential as the SFD
®
system.
Description of material effects of governmental & environmental
regulation
SFD
®
Survey Flight Operations
The
operation of our business, namely conducting aerial SFD
®
surveys and interpreting SFD
®
data, is not subject to material governmental or environmental
regulation in Canada and the U. S. with the exception of flight
rules issued by Transport Canada and the Federal Aviation Authority
governing the use of commercial aircraft, including rules relating
to low altitude flights. The requirements in other countries vary
greatly and may require permits and/or provide other restrictions
to conducting flight operations in the country that may restrict
our ability to perform SFD
®
surveys as freely as in Canada and the U.S.
23
For
example, in Colombia, SFD
®
surveys must comply with three requirements not encountered in
Canada and the United States. These requirements are i) customs
obligations and bonds related to the importation and exportation of
the aircraft into Colombia, ii) obtaining permits from the local
aviation authority, and iii) obtaining permits from the Colombian
Air Force. NXT has successfully operated in the past in Colombia in
accordance with these requirements.
With
our past experience in Canada, the U.S., Bolivia, Mexico, Colombia
and other countries, we do not anticipate any unusual government
controls or regulations that might significantly prevent timely
completion of SFD
®
surveys. However, we may encounter unforeseen government
regulations or restrictions in other countries that may impair or
restrict our ability to conduct surveys, which could limit our
ability to earn revenue or potentially expose NXT to forfeiture of
performance bonds.
C.
Organizational
structure.
The
following table provides a list of all subsidiaries and other
companies controlled by NXT:
Subsidiaries
Date and Manner of Incorporation
Authorized Share Capital
Issued and Outstanding Shares
Nature of the Business
% of each Class of Shares owned by NXT
NXT Energy USA, Inc.
October 20, 1995 by Articles of Incorporation – State of
Nevada
20,000,000 common
5,000,000 common
Inactive
100%
NXT Aero USA, Inc.
August 28, 2000 by Articles of Incorporation – State of
Nevada
1,000 common
100 common
Inactive
100%
4,000 preferred
Cascade Petroleum Inc. (Formerly Survey Services International
Inc.)¹
2011-09-06 by Articles of Incorporation – Province of
Alberta
Unlimited number of common shares
100 common
Inactive
100%
NXT Energy Services (SFD
®
)
Inc.
2019-12-08 by Federal Articles of Incorporation –
Canada
Unlimited number of common shares
100 common
Inactive
100%
PetroCaza Exploration Inc.
May 2015 by Articles of Incorporation Province of
Alberta
Unlimited number of common and preferred shares
100 common
Inactive
100%
¹On January 16
th
, 2017, the name of
Survey Services International Inc. was changed to "Cascade
Petroleum Inc."
In
addition, in March 2015, NXT registered NXT Energy Solutions Inc.
(Sucursal Bolivia) as a wholly owned "Branch" entity
under the laws of the Plurinational State of Bolivia, to contract
and conduct survey operations in Bolivia. Operations have now
ceased in Bolivia and we are in the process of closing the branch
which should be completed in the second quarter of
2020.
24
D.
Property,
plant and equipment.
Oil and Gas Properties
We have
minor historical interests in a limited number of acreage holdings
of undeveloped lands in western Canada. These assets are not a
material asset and have been written off in our financial
statements. Additionally, we may in the future become entitled to
receive gross over-riding royalty ("GORR") interests on
production from portions of certain lands where we conducted past
surveys for clients in Canada. There is no certainty that wells on
these lands will become placed on production, or that future
royalty revenues will be earned from these entitlements prior to
the expiry of the landowners' related mineral leases. No
asset value has been recorded in the financial statements for these
GORRs.
Facilities / Office Premises
In
August 2015, NXT moved to a new office premises (11,333 square
feet) at 3320 – 17
th
Avenue SW in
Calgary under a 10-year lease at an initial estimated minimum
monthly lease payment of $48,243 (including building operating
costs) commencing in October 2015. See also Item 5.F
"Contractual Obligations".
Aircraft
In
order to perform our survey services, NXT requires to fly the
survey area in a jet aircraft. In April 2017, NXT completed a sale
and leaseback agreement of its aircraft with a Calgary based
international aircraft services organization (the
"Lessor"). The terms of the agreement resulted in NXT
selling its' 1997 Cessna Citation Ultra 560 jet aircraft that
was purchased in 2015. NXT has leased the aircraft over an initial
term of 60 months and retains all existing operating rights and
obligations. NXT is required to make monthly payments to the Lessor
of approximately US$39,500. NXT has the option to extend the term
of the lease by an additional two years. Should NXT want to
repurchase the aircraft at the end of the initial lease term, the
purchase price is US$1,450,000. When the aircraft is not needed for
use by NXT, we seek to earn charter hire revenues from the aircraft
through a third party, Air Partners.
Air
Partners also has access to an alternate, similar model aircraft
(certified for the use of our survey equipment) which could be
charter hired for use by NXT if needed.
Equipment
Our
SFD
®
technology is comprised of three main components, detailed below,
which we collectively refer to as our SFD
®
survey system. This system is generally stored at our Calgary
office facility unless deployed during survey operations when this
equipment would travel with the aircraft or be stored in a locked
facility at the survey location when not in use. In addition, there
is extensive interpretation equipment located in Calgary. The main
categories of equipment we use are:
●
Stress Field Detector -
The
stress field detector, or SFD
®
system, including a unit which houses the SFD
®
sensors, is the principal component of our technology.  The
SFD
®
sensors respond to fine-scale perturbations in the gravitational
field caused by changes in subsurface density and stress
distribution. These responses are transformed through
electromechanical transduction into electronic digital signals as
the output.  The SFD
®
method has proven highly effective at identifying potential
hydrocarbon traps in a wide variety of geological settings onshore
and offshore. Airborne SFD
®
surveys are currently conducted utilizing an array of 22
SFD
®
sensors, consisting of 6 primary, 8 secondary and 8 research and
development sensors, allowing multiple independent SFD
®
signals to be acquired at all points of a designed
survey.
●
Data Acquisition System -
used in conjunction with the
SFD
®
sensor array on surveys, our data acquisition system is a compact,
portable computer system which concurrently acquires the electronic
digital signals from the SFD
®
sensor array and other pertinent client data, including the GPS
location information of the data.
●
SFD
®
Signal Conditioning Unit -
this self-contained unit contains
electronic circuits for stabilizing and conditioning electronic
signals. All sensor output is directly connected to this unit and
after signal conditioning is completed, all output is forwarded to
the computer system.
●
Interpretation Theatre -
once returned to our home base, the
SFD
®
data collected is processed and converted into a format that can be
used by our interpretation staff using systems consisting of
generally off-the-shelf computer equipment, high definition
monitors, projectors and screens. This equipment is generally
permanently set up at our Calgary office facility. A remote
SFD
®
data interpretation theater is available and may be deployed during
survey operations and would be set up in a facility at the survey
client's city.
25
We are
not affected by any significant environmental concerns, nor is
there any planned significant capital additions
contemplated.
ITEM 4A.
UNRESOLVED
STAFF COMMENTS
Not
applicable.
ITEM 5.
OPERATING
AND FINANCIAL REVIEW AND PROSPECTS
The
following discussion of our financial condition and results of
operations should be read in conjunction with the "Selected
Financial Data" and the accompanying Consolidated Financial
Statements and the notes to those statements incorporated by
reference elsewhere in this Form 20-F. The following discussion
contains forward-looking statements that reflect our plans,
estimates and beliefs. Our actual results could differ materially
from those discussed in these forward-looking statements. Factors
that could cause or contribute to such differences include, but are
not limited to, those discussed below and elsewhere in this annual
report, particularly under the caption "Risk
Factors".
A.
Operating
results.
Overall
Operational Performance
Selected Annual Information
For the year ended December 31
2019
2018
2017
Survey revenue
$
$
11,976,149
$
-
$
-
Net
comprehensive income (loss)
3,772,908
(6,968,511
)
(8,970,398
)
Net
income (loss) per common share - basic
$
0.06
$
(0.11
)
$
(0.16
)
Net
income (loss) per common share - diluted
$
0.06
$
(0.11
)
$
(0.16
)
Net
cash generated by (used in) operating activities
4,078,427
(6,043,919
)
(5,464,679
)
Cash
and short term investments
6,639,757
4,239,532
1,116,618
Total
assets
30,692,941
25,264,268
23,920,991
Long
term liabilities
2,691,217
510,661
741,408
Summary
financial highlights for the last three fiscal years are as
follows:
Financial Highlights for 2019
●
In Q3 the Company
completed its Nigerian SFD
®
survey for approximately US$8.9 Million with PE Energy Limited
("PE"), a Nigerian oil and gas service company. PE had
a contract with the Nigerian National Petroleum Company
("NNPC"), to provide 5,000-line kilometers of
SFD
®
surveys
in Nigeria.
●
As of the date of
this 20-F, the Company has received a total of US$8.4 million
payments in cash from PE for the SFD
®
survey in Nigeria, including US$1.9 million in Q4 and an additional
US$0.47 million in the first quarter of 2020. The final payment for
contracted holdbacks amount to approximately $0.5 million
USD.
26
●
NXT
received confirmation of a patent granted from the European Patent
Office. This brings the total number of countries granting the
patent to 44. The final step is for the validation process of the
SFD
®
technology patent in select European countries.
●
In February 2019,
NXT entered into a Co-operative Agreement with AGV, for AGV to
bring to proposal up to three SFD
®
surveys for cooperation with the Company within two years. The
Co-operative Agreement is based on a cost-plus formula and a gross
overriding royalty interest in oil and gas production arising on
lands subject to the surveys. The Company received a US$100,000
non-refundable deposit paid in connection with the Co-operative
Agreement in Q2. Pursuant to the Co-operation Agreement, the
deadline to complete at least one of three SFD
®
surveys is June 30, 2020.
●
In Q3, the Company
advanced US$250,000 to AGV for the purpose of furthering the shared
objectives of NXT and AGV under the Co-operation Agreement. On
April 13, 2020, NXT elected to receive and directed AGV to deliver
US$250,000 as repayment of the Principal Amount.
●
During Q4 the
Company completed the C$1,250,000 targeted issuer bid, purchasing
for cancellation 4,166,667 common shares in the capital of the
Company representing approximately 6.08% of the total outstanding
Common Shares as of November 14, 2019, at a price of C$0.30 per
Common Share.
●
Common share
purchase warrants held by AGV have expired as of October 31,
2019.
●
Cash and short-term
investments at the end of the 2019 were $6.64 million.
●
There was $11.98
million of survey revenues recorded in 2019.
●
Net income of $3.77
million was recorded for 2019, including amortization expense of
$1.78 million.
●
Operating
activities provided $4.08 million of cash during 2019 and net cash
used for financing activities was $1.39 million.
●
Net income per
common share for 2019 was $0.06 basic and $0.06 fully
diluted.
●
General and
administrative costs for 2019 as compared to 2018 have been reduced
by $0.50 million or 13% mostly due a reduction in business
development costs, lower headcount and costs and certain
expenditures being recognized as direct survey costs, offset by
higher professional fees and information technology
costs.
Financial Highlights for 2018
●
Following the
Company's participation at the Upstream West Africa Summit in
Senegal in Q2, NXT management traveled twice to Africa to meet with
representatives of the Nigerian National Petroleum Corporation
("NNPC") and the Ghana National Petroleum Corporation
("GNPC") to discuss the benefits
SFD
®
would
bring to their current exploration programs.
●
Discussions with
NNPC continued in the fourth quarter of 2018 and have resulted in
the signing of a contract in March 2019 with PE Energy Limited, a
Nigerian oil and gas service company, for the value of
approximately $US8.9 million.
●
NXT has entered
into a three year exclusive sales representative agreement with
AGV, in nine jurisdictions in the Middle East and Latin America.
This agreement has expired in 2020.
●
NXT received
notification of the granting of NXT's SFD
®
patent in China on April 13, 2018.
●
In September 2018,
NXT received a U.S. patent for its new sensor design we term the
"Cascade" configuration.
o
The Cascade sensor
is the result of NXT's continued research & development
efforts and builds upon our existing US patent. Management believes
the Company's Cascade sensors will provide enhanced ability
for identifying trapped fluid bodies indicative of potential
hydrocarbon accumulations along with improved reliability and
flexibility during SFD
®
survey
operations.
●
In October 2018, we signed an MOU with BGP Inc., a
subsidiary of China National Petroleum Corporation, to further
explore opportunities for NXT and PGP Inc. to work together.
NXT's forward strategy is to secure
SFD
®
contracts with BGP and its
affiliates.
●
The MOU entered
into between Generation Resource Discoveries ("GRD"),
NXT's regional representative, and the Government of Aceh,
Indonesia on February 22, 2018, GRD has expired.
●
NXT completed a
Private Placement financing on July 3, 2018 of $9,484,810 through
the issuance of an aggregate of 10,264,946 units at $0.924 per unit
(the "Private Placement"). Each unit consisted of one common share
and one-third of one common share purchase warrant (each whole
warrant, a "Warrant"), and each Warrant entitles the holder to
acquire one common share at an exercise price of $1.20 for twelve
(12) months from closing of the first tranche of the Private
Placement on February 16, 2018. The Warrants expired on October 31,
2019.
27
●
No survey revenues
were recorded in 2018.
●
A net loss of $6.97
million was recorded for 2018, including amortization expense of
$1.79 million and stock-based compensation expense of $0.39
million.
●
Losses per common
share was $0.11 for 2018 (basic and diluted).
●
Operating
activities used $6.04 million as at 2018 and net cash from
financing activities was $9.18 million.
●
General and
administrative costs for 2018 as compared to 2017 have been reduced
by $0.96 million or 19% mostly due to a reduction in headcount,
public company costs and partially offset by increased business
development activity.
●
Cash and short-term
investments at the end of the 2018 were $4.24 million.
Financial Highlights for 2017
●
No survey revenues
were recorded for 2017.
●
NXT completed its
first ever SFD
®
Multi-Client survey in the Gulf of Mexico.
o
Acquired
37,596 line km of SFD
®
data in June 2017 for the shallow water Bid Round 2.1 covering the
Tampicao-Misantla, Veracruz and Cuencas del Sureste exploration
areas. The SFD
®
survey data
provides 100% grid coverage over the offshore blocks, an area of
approximately 8,900 km2. In addition, NXT acquired incidental data
over many of the 35 blocks offered in the recently concluded Bid
Round 3.1 and believe the remaining data will also be applicable to
future bid rounds.
●
Successfully
tested the upgraded SFD
®
Data
Acquisition System during the Gulf of Mexico survey.
●
Significantly
expanded protection of IP through multiple patent grants
globally.
o
SFD
®
patents granted in Russia (January
2017), Japan (July 2017), Mexico (July 2017), Canada (August 2017)
and the U.S. (November 2017); and notices of allowance received
from China (February 2018).
●
A
net loss of $8,970,398 for the year including amortization expense
of $1,897,576.
●
Operating activities used $5,464,679 of cash
during the year and net cash utilization was
$323,878.
●
Losses per common share were $0.16 (basic and
diluted).
●
Significant
progress made in 2017 and the first quarter of 2018 to reduce
corporate costs and execute on financing options significantly
strengthening the Company's liquidity and working capital
position.
o
$2.7
million sale and leaseback arrangement on our airplane completed in
April 2017.
o
Rights offering completed on November
3
rd
for gross proceeds of
$2,093,645.
●
Cash and short-term
investments at the end of 2017 were $1,116,618.
Net Income (Loss)
2019
2018
2017
Survey
revenue
$
11,976,149
$
-
$
-
Expenses
Survey
costs
2,611,086
1,103,946
1,289,429
General
and administrative
3,497,785
3,999,089
4,960,961
Stock
based compensation expense
43,809
386,154
581,356
Amortization
expense
1,781,181
1,790,267
1,897,576
7,933,861
7,279,456
8,729,332
Other
expense (income), net
269,380
(310,945
)
165,531
Income
(loss) before income taxes
3,772,908
(6,968,511
)
(8,894,853
)
Income
tax expense (recovery)
Current
-
-
75,545
Deferred
-
-
-
-
-
75,545
Net
income (loss) for the year
3,772,908
(6,968,511
)
(8,970,398
)
28
Expenses for the years ended December 31, 2019, 2018 and
2017
Survey costs
– Survey expenses relate entirely to the
direct survey costs and aircraft handling and maintenance costs,
net of charter hire revenue.
In
2019, survey expenses included direct incremental survey costs for
the Nigerian SFD
®
Survey incurred which include aircraft and hanger operating costs,
staff costs to support the survey, and mobilization/demobilization
costs. Also these costs include staff costs to interpret and
integrate the survey, and their travel costs. Aircraft operations
costs in 2019 were higher than 2018 as additional scheduled
maintenance was required after the Nigerian SFD
®
Survey, net of charter hire revenue.
The
aircraft is available for charter to third parties through our
aircraft manager when it is not being used by NXT. Any charter fees
received are used to offset aircraft costs.
In
comparing 2018 with 2017, costs for aircraft operations are higher
because of the Phase 5 major maintenance performed on the aircraft.
This was offset by increased charter hours for all of 2018 which
offset operating costs. Aircraft lease costs in 2018 are $202,085
higher than 2017 as the lease payments started in May 2017, which
resulted in 4 months less of lease costs in 2017. Correspondingly,
amortization costs are lower in 2018.
For
most of 2017, the survey costs related entirely to the aircraft
lease and maintenance costs, net of charter hire revenue. During Q2
2017, NXT completed its first ever SFD
®
Multi-Client survey in the Gulf of Mexico. There have been no sales
for the SFD
®
data that was
recorded and therefore the direct costs of the survey have been
expensed. Survey costs only represent the direct costs that were
incurred during operations of this survey and exclude any indirect
costs associated with the use of the technology.
General and administrative ("G&A") expense
-
G&A is a major component of NXT's total expenses. All salaries
and overhead costs related to SFD
®
data interpretation staff (other than out of country per diem
allowances) are included in G&A, and not included with direct
survey expenses. The categories included in G&A expense are as
follows:
For
the year ended December 31
2019
2018
2017
Salaries,
benefits and consulting charges
$
1,599,247
$
2,046,886
$
2,709,194
Board,
professional fees, and public company costs
857,556
781,330
873,864
Indirect
financing costs
-
-
35,865
Premises
and administrative overhead
800,626
753,380
842,994
Business
development
240,356
382,146
257,465
Bolivia/Colombia
overhead
-
35,347
241,579
Total
G&A
3,497,785
3,999,089
4,960,961
G&A
expenses decreased by $501,304, or 13%, in 2019 compared to 2018
for the following reasons:
●
salaries, benefits
and consulting charges decreased $447,639, or 22%, due primarily to
a change to a lower cost mix in corporate staff, two less headcount
and allocation of direct salary costs to survey costs;
●
board and
professional fees and public company costs increased $76,226, or
10%, due primarily to higher professional fees paid in connection
with the Nigerian SFD
®
Survey and higher insurance costs given the increased business
activity (partially offset by termination costs to suspend the
Advisory Board in 2018);
●
premises and
administrative overhead increased $47,246, or 6%, due primarily to
increased costs related to the improvement of the Company's
information systems security;
29
●
business
development costs decreased $141,790, or 37%, due primarily to
Company resources focused on first the negotiation and then the
implementation of the Nigerian SFD
®
Survey; and
●
Bolivian overhead
costs decreased by $35,347, or 100%, as the Company officially
closed its offices and ceased operations in that country in
Q4-18.
G&A
expenses decreased by 19% or $961,872 in 2018:
●
The main reason for
salaries, benefits and consulting charges being lower in 2018 than
2017 is due to a reduction in corporate headcount. In addition,
focus was put on reducing vacation liabilities.
●
Board, professional
fees and public company costs, were 14% lower in 2018 compared to
2017 as the Advisory Board was indefinitely suspended and there was
one less Director on the Board of Directors. Also, professional
fees were higher in 2017 as there were two significant
transactions, the Rights Offering and the Sale Leaseback
transaction which required significant legal assistance. In 2018,
the significant transaction was the Private Placement.
●
Premises and administrative overhead was 11% lower
in
2018
compared to the prior
year, mostly due to lower property taxes and lower maintenance
costs early in the year. In addition, there was significant cost
reduction efforts in office overhead costs like supplies and
subscriptions.
●
Business development costs increased $124,681 as
the Company increased marketing efforts for the
SFD
®
technology
during
2018.
●
2018
YTD Bolivian overhead costs of $35,347 are related to closing of
the branch.
Total
G&A for 2017 was $5.0 million which was $0.7 million lower than
2016. G&A within the six individual expense categories noted
above reflect several factors:
●
2017 salaries,
benefits and consulting charges are lower than 2016 levels due to
lower staffing levels.
●
For
2017 the full year costs were slightly down due to 2 less board
members and other cost controls.
●
Indirect
financing costs in 2017 were higher due to work focused on
obtaining new financing and negotiating the aircraft
leaseback.
●
Premises
and administrative overhead where lower in 2017 versus the 2016 due
to cost reduction and deferred spending efforts.
●
Business
development costs were lower for the year as marketing costs were
reduced.
●
Before 2017, Bolivian overhead costs were
classified as consolidated survey costs as the sole purpose of the
office opening was to administer the YPFB survey. At the beginning
of Q1 2017, Bolivian overhead costs were presented as G&A to
reflect the fact the office has been maintained to facilitate
periodic operating activities in Bolivia that are anticipated from
time to time.
In Q2 2017, a previously held "fiscal
tax credit" of $127,798 was expensed as the recoverability of
this receivable was no longer considered certain. The credit
related to the Bolivian equivalent of input sales tax and is
usually offset against output sales tax. It is not refundable if
input tax exceeds output tax.
Stock-Based Compensation Expense ("SBCE")
–
SBCE
varies in any given quarter or year as it is a function of several
factors including the number of stock options issued in the period
and the period of amortization (based on the term of the contract
and/or number of years for full vesting of the options, which is
normally three years) of the resultant expense. Also, SBCE is a
function of periodic changes in the inputs used in the
Black-Scholes option valuation model, such as volatility in NXT's
trailing share price.
SBCE in
2019 was lower compared to 2018 by $342,345. In Q1 2018, 333,333
options vested resulting in substantial SBCE. In 2019, most options
previously issued by the Company had vested resulting in minimal
SBCE, partially offset by 100,000 options awarded to a
consultant.
SBCE
was lower in 2018 versus 2017 as significant unvested options were
forfeited and almost all remaining options were fully vested early
2018.
There
was a lower average number of options outstanding at the end of
2017 (total of 1,648,667 as compared to 3,321,001 at the end of
2016).
30
Amortization expense
– consists of the following
amounts:
2019
2018
2017
Amortization
of:
Property
and equipment
$
96,448
$
105,534
$
212,841
Intellectual
property
1,684,733
1,684,733
1,684,735
1,781,181
1,790,267
1,897,576
Property and equipment and related amortization
expense.
Property and equipment
additions in 2019 was for acquiring and installing in its aircraft
a new transponder technology known as ADS-B. The U.S. Federal
Aviation Administration (the "FAA") and European Aviation Safety
Agency have mandated that all aircraft flying in designated
controlled airspaces must be equipped with ADS-B by January 1, 2020
(US airspace) and June 7, 2020 (European airspace). Total costs for
installing the ADS-B was approximately $208,000. This amortization
was offset as the Company uses the declining balance method of
depreciation, thereby having the effect of lowering amortization
each year on existing assets. In prior years most of our capital
investment in property and equipment was in computer hardware,
which is amortized on a 30% declining balance basis, such that
amortization is high in the initial year of capital investment.
Since 2016, annual capital spending has been minimal, resulting in
declining levels of amortization expense.
Intellectual property and related amortization
expense.
NXT acquired specific
rights to utilize the proprietary SFD
®
technology in global hydrocarbon exploration applications from the
inventor of the SFD
®
technology, NXT's Chairman, President and Chief Executive Officer,
on August 31, 2015. The value attributed to the acquired IP assets
was $25.3 million. The IP assets are being amortized on a
straight-line basis over a 15-year period (future amortization
expense of $1,685,000 per year) and are also being subject to
ongoing tests of potential impairment of the recorded net book
value. No impairments were recognized in 2019, 2018 or
2017.
Other Expense (Income)
2019
2018
2017
Interest expense
(income), net
$
(20,684
)
$
(62,004
)
$
4,485
Foreign exchange
(gain) loss
233,232
(19,852
)
69,676
Intellectual
property, R&D and ARO
56,833
(43,428
)
91,370
Gain on
extinguishment of liability
-
(185,661
)
269,381
(310,945
)
165,531
Interest (income) expense, net.
This category of other
expenses includes interest income earned on short-term investments
netted by interest expense from financial lease obligations. Since
January 1, 2019 interest on finance leases is included in this
account under the new lease accounting standard. 2019 interest
(income) expense net was $41,320 less than 2018, as lease interest
expense has offset income earned on guaranteed investment
certificates.
Foreign exchange loss (gain).
This category of other
expenses includes losses and gains caused by changes in the
relative currency exchange values of US dollars and CDN dollars.
The foreign exchange (gain) loss for the periods was primarily
caused by the translation of assets and liabilities in the Canadian
Company which were held in US$. The Company held significant assets
in US dollars at December 31, 2019, including accounts receivable,
cash and cash equivalents, short-term investments and the security
deposit for the aircraft, all of which have an effect on the
unrealized foreign exchange gain and loss. At December 31, 2019,
the Company had a significant foreign exchange loss which was the
result of the CDN dollar strengthening compared to May 2019 when
several of the US dollar assets were initially recorded. The
Company does not currently have the ability to enter hedging
contracts, but uses strategies to reduce the volatility of US
dollar assets including converting excess US dollars to CDN
dollars.
31
Intellectual property, R&D and ARO
– this total
includes costs incurred for the following:
2019
2018
2017
Intellectual
property, R&D and ARO
$
56,833
$
(43,428
)
$
86,604
TSX
Listing
-
-
-
Other,
net
-
-
4,766
56,833
(43,428
)
91,370
This
category includes primarily costs related to IP filings and R&D
activity related to the SFD
®
technology and costs for certain non-recurring, "project"
activities.
In
2019, the Company's IP, R&D and ARO expenses related mostly to
costs associated with the validation process for certain European
SFD
®
patents. In 2018, these costs were negative as the Company
renegotiated fees from a provider of R&D services.
In
2018, the Company's Intellectual property and R&D expenses were
negative as it incurred less costs from a provider of services than
originally estimated. The Company also updated estimates for
several asset retirement obligations related to minor non-operated
interests in oil and natural gas wells in which NXT has outstanding
abandonment and reclamation obligations in accordance with
government regulations were significantly reduced in
Q4-18.
Gain on Extinguishment of Liability
- In Q3-18, the Company
determined that liabilities it had recorded before 2005 were no
longer payable. As a result, a gain of $185,661 was recorded in
other income on the extinguishment of the liability. No cash was
paid to settle the liability.
For
2017 YTD, other expenses consisted primarily of costs incurred to
secure a patent for SFD
®
in the U.S. and to continue to develop SFD
®
technology.
For
2017, Intellectual property and R&D costs consisted primarily
of costs incurred to secure a patent for SFD
®
in the U.S. and to continue to develop SFD
®
technology.
Other
expenses includes primarily discretionary costs related to
intellectual property / patent filings and R&D activity related
to the SFD
®
technology.
We currently have no other outstanding derivative financial
instruments, such as foreign currency hedges.
Income tax expense
– There was no income tax expense
in 2019 or 2018.
NXT
periodically earns revenues while operating outside of Canada as a
non-resident within certain foreign jurisdictions and services
rendered to clients in such countries may be subject to foreign
withholding taxes, which are only recoverable in certain limited
circumstances. Income tax expense for 2017 is a result of
withholding taxes that were incurred on charges related to the
Bolivia survey project. There was no income tax expense in Canada
or Bolivia during 2018.
A total net income tax was recognized as follows:
2019
2018
2017
Foreign
with-holding taxes incurred
$
-
$
-
$
75,545
-
-
75,545
Foreign
corporate taxes incurred
-
-
-
Less
portion accrued at Dec 2015
-
-
-
Corporate
income tax expense – foreign
-
-
75,545
-
-
75,545
Deferred
tax recovery
-
-
-
Net
tax expense (recovery)
-
-
75,545
32
At the
end of 2019, NXT has available for future Canadian income tax
deduction purposes significant unrecorded deferred income tax
assets, the benefit of which has not been recorded in the
Company's financial statements due to uncertainty regarding
the amount and timing of their potential future utilization. These
deferred income tax assets include non-capital losses
carried-forward (expiring in 2027 to 2039) and other resource
deductions totaling approximately $39.4 million.
Summary of Quarterly Results (Unaudited)
A
summary of operating results for each of the trailing 8 quarters
(including a comparison to each respective prior quarter) follows.
The extent of the profit or loss each quarter is mainly due to the
timing and the number of survey contracts that are underway, and
variances in such non-cash items as SBCE, which can occasionally be
a significant expense in any given quarter
Q4-19
Q3-19
Q2-19
Q1-19
Dec
31, 2019
Sep 30,
2019
Jun 30,
2019
Mar
31, 2019
Survey
revenue
$
-
$
1,021,532
$
10,954,617
$
-
Net income
(loss)
(1,775,287
)
(774,373
)
8,085,888
(1,763,320
)
Income (loss) per
share - basic
(0.03
)
(0.01
)
0.12
(0.03
)
Income (loss) per
share - diluted
(0.03
)
(0.01
)
0.11
(0.03
)
Q4-18
Q3-18
Q2-18
Q1-18
Dec
31, 2018
Sep 30,
201
8
Jun 30,
201
8
Mar
31, 201
8
Survey
revenue
$
-
$
-
$
-
$
-
Net
income (loss)
(1,392,716
)
(1,660,031
)
(1,961,114
)
(1,954,650
)
Income
(loss) per share - basic
(0.02
)
(0.02
)
(0.03
)
(0.03
)
Income
(loss) per share - diluted
(0.02
)
(0.02
)
(0.03
)
(0.03
)
Significant or Unusual Items Impacting Net Income
(Loss):
In
Q4-19, SBCE was lower as most outstanding options were fully
vested. In Q3-19, NXT recognized $1,021,532 of revenue for services
rendered in connection with the Nigerian SFD
®
Survey, compared to $10,954,617 in Q2-19. There were no revenues in
the previous five quarters, rather, the Company incurred net losses
in each due primarily to survey costs (related to aircraft lease
and aircraft maintenance costs), G&A expenses and non-cash
items like SBCE, which can be a significant expense in any given
quarter, as detailed more specifically below:
●
in Q1-19, survey
costs were higher due to scheduled maintenance on the aircraft and
significant legal and contract negation costs in preparing for the
Nigerian SFD
®
Survey;
●
In Q4-18, SBCE was
lower by $283,811 as unvested options were forfeited. In addition,
G&A costs decreased $156,271 for two reasons. Firstly, business
development decreased as most of the business development work was
centred in Calgary supporting Nigerian SFD
®
survey negotiations. Secondly, there was a decrease in public
company costs as the previous quarter had significant costs related
to the Private Placement. Offsetting this was an increase of
$44,010 in survey expenses as NXT's aircraft incurred a
scheduled major maintenance in December 2018.
●
In Q3-18, a gain of
$185,661 has been recognized on the extinguishment of a liability
that was recorded before 2005 which is no longer payable. Also,
interest income of $26,171 was earned on cash received from the
Private Placement.
●
In Q1-18, G&A
costs were lower as NXT began to recognize the full extent of cost
reductions started in the prior quarter.
33
B.
Liquidity
and capital resources.
Going Concern
The
consolidated financial statements for 2019 have been prepared on a
going concern basis.  The going concern basis of presentation
assumes that NXT will continue in operation for the foreseeable
future and will be able to realize its assets and discharge its
liabilities and commitments in the normal course of
business.
NXT's
financial statements for 2018 included disclosure related to the
use of the "going concern" basis of presentation. In 2019, NXT has
had positive cash flow from operations which has resulted in a
significant strengthening of the Company's liquidity and working
capital position. As a consequence, management is of the view that
removal of the "going concern" disclosure in respect of its 2019
disclosure is warranted on the basis than the Company currently has
sufficient funds to maintain operations for the next 12 months as
of the date of these financial statements.
In the
preparation of the 2019 financial statements, management determined
that there are no existing conditions or reasonably foreseeable
events that raise substantial doubt about the Company's ability to
continue as a going concern. However, NXT's future financial
results and its longer term success remains dependent upon the
ability to continue to attract and execute client projects to build
its revenue base. NXT continues to develop its pipeline of
opportunities to secure new revenue contracts. However, the
Company's longer-term success remains dependent upon its ability to
convert these opportunities into successful contracts and to
continue to attract new client projects and expand the revenue base
to a level sufficient to exceed fixed operating costs and continue
to generate positive cash flow from operations.  The
occurrence and timing of these events cannot be predicted with
certainty.
NXT's
cash and cash equivalents plus short-term investments at December
31, 2019 totaled $
6.64 million
.
Net working capital totaled $7.13 million.
As NXT
is operating on a going concern basis, NXT's short-term ability to
generate sufficient cash depends on the success of signing
contracts and receiving advance payments pursuant to the terms of
such agreements
.
NXT's
longer-term success remains dependent upon our ability to continue
to attract new client projects and expand the revenue base to a
level sufficient to exceed G&A expenses and generate excess net
cash flow from operations
. Proceeds
from past equity financings have been used to provide NXT with
funds to pursue, close and implement commercial transactions
currently in negotiation, develop additional revenue streams
including multi-client data sales and strategic partnerships and
for general corporate and net working capital
purposes.
Risks
related to having sufficient ongoing net working capital to execute
survey project contracts are mitigated through our normal practice
of obtaining advance payments and progress payments from customers
throughout the course of the projects, which often span three to
four months. In addition, where possible, risk of default on client
billings has been mitigated through the use of export insurance
programs offered by Export Development Canada.
In
2019, NXT continued to make progress in strengthening its liquidity
and net working capital by completing the Nigerian SFD
®
Survey and reducing corporate costs by reducing the number of
staff
and by implementing
new human resource policies to reduce staffing costs.
Please see the
discussion under "
Summary of
Operating Results – General and Administrative
Expenses
" for the results of these cost
reductions.
As of
the date of this 20-F, NXT has sufficient funds to maintain its
operations for more than 12 months. The Company does not have
provisions in its leases, contracts, or other arrangements that
would trigger additional funding requirements or early
payments.
34
If the
Company were to default on its office lease, the current month rent
plus the next three months become immediately due. If the Company
were to default on the aircraft lease, the Company would be
required to deliver the aircraft back to the Lessor.
This
discussion includes references to the term "net working
capital", which do not have a standardized meaning prescribed
by U.S. GAAP and may not be comparable to similar measures
presented by other entities.  NXT management uses this
non-GAAP measure to improve our ability to assess liquidity at
a point in time.  Net working capital is defined as total
current assets less total current liabilities, excluding amounts
accumulated in work in progress and deferred revenue. 
Management excludes these amounts from the calculation as they do
not represent future cash inflows or outflows to the
Company.
NXT had
no secured debt and had net working capital of $7,129,182 as at
December 31, 2019 as follows:
December 31,
December 31,
net change
2019
2018
in 2019
Current
assets (current liabilities):
Cash
and cash equivalents
$
2,858,245
$
339,532
$
2,518,713
Short-term
investments
3,781,512
3,900,000
(118,488
)
6,639,757
4,239,532
2,400,225
Accounts
receivable
1,384,315
61,279
1,323,036
Note
receivable
324,700
-
324,700
Prepaid
expenses and deposits
97,132
65,159
31,973
Accounts
payable and accrued liabilities
(448,928
)
(499,535
)
50,607
Contract
obligations
(131,386
)
-
(131,386
)
Current
portion of capital lease obligation
(736,408
)
(42,603
)
(693,805
)
Net
Working Capital
7,129,182
3,823,832
3,305,350
The
increase in net working capital in 2019 was due to recognizing
accounts receivable, cash from the Nigerian SFD
®
Survey and the note receivable in respect of the Loan Arrangement.
This increase was offset due to the recognition of the current
portion of lease obligations under ASC Topic 842 ("Topic 842") and
contract obligations (deposit) received from AGV for the
Co-operation Agreement.
Sources and uses of cash
The
overall net changes in cash balances in each of the periods noted
above is a function of several factors including any inflows
(outflows) due to changes in net working capital balances and net
of any cash transferred into/out of short-term investments. Further
information on the net changes in cash, by each of the operating,
financing and investing activities, at the end of the periods, for
the last three fiscal years is as follows:
For
the year ended December 31
2019
2018
2017
Cash
provided by (used in):
Operating
activities
$
4,078,427
$
(6,043,919
)
$
(5,464,679
)
Financing
activities
(1,385,787
)
9,176,839
2,022,943
Investing
activities
(173,927
)
(2,960,006
)
3,117,858
Net
cash inflow (outflow)
2,518,713
172,914
(323,878
)
Cash
& cash equivalents, start of the year
339,532
166,618
490,496
Cash
& cash equivalents, end of the year
2,858,245
339,532
166,618
Cash
& cash equivalents
2,858,245
339,532
166,618
Short-term
investments
3,781,512
3,900,000
950,000
Total
6,639,757
4,239,532
1,116,618
35
Operating Activities
Net
cash flow from operating activities listed above is a function of
net income (loss) for the year, an add back of the net non-cash
revenue and expense items (such as SBCE, amortization expense,
deferred tax expense / (recovery) and the net change in year-end
working capital items (for example, a net decrease in working
capital in the year gives rise to a source of cash), with these
components each year as follows:
For
the year ended December 31
2019
2018
2017
Comprehensive
income (loss) for the year
$
3,772,908
$
(6,968,511
)
$
(8,970,398
)
Add
back net non-cash expense and income items
1,777,580
1,782,762
2,676,705
5,550,488
(5,185,749
)
(6,293,693
)
Change
in non-cash working capital balances
(1,472,061
)
(858,170
)
829,014
Total
cash provided by (used in) in operations
4,078,427
(6,043,919
)
(5,464,679
)
Operating
cash flow increased by $10,122,347 in 2019 as compared to 2018
because of payments received from the Nigerian SFD
®
Survey net of
payments for survey costs.
For
2018 and 2017, changes in operating cash flow was driven by the
lack of revenue and incurred operating costs for the
period.
Financing Activities
2019
– During the fourth quarter of 2019 the Company
completed the TIB for $1,250,000 plus costs of $93,184 to
repurchase 4,166,667 TIB Common Shares, at a price of $0.30 per.
Also NXT recorded a net cash financing outflow of $42,603 in 2019
on payments for its finance leases.
2018
– During 2018 NXT recorded a net inflow of
$9,176,839 as a result of proceeds received from the closing of
tranches in the Private Placement.
2017
- NXT recorded a cash inflow of $2,019,865 in 2017
related mostly from the Rights Offering.
Investing Activities
2019
– Company acquired the new transponder technology
known as ADS-B for its aircraft. Total costs for installing the
ADS-B was approximately $208,000. Short-term investments in 2019
increased as the Company invested excess funds from operations into
Guaranteed Investment Certificates.
36
2018
–Short-term investments increased as a result of
the Private Placement funds.
2017
- The overall net cash source in investing activities
of $3,117,858 for 2017 reflects these components:
●
On April
28
th
, 2017
NXT completed a sale and leaseback transaction on its' Cessna
Citation aircraft for $3,142,260 (US$2,300,000).
●
A use of $518,765
for deposits on the aircraft and building leases.
●
A source of
$503,091 from a net decrease in cash invested in short-term
investments
C.
Research
and development, patents and licenses, etc.
Research
and development, patents and licenses for NXT primarily includes
costs related to intellectual property filings, research and
development activity related to the SFD
®
technology and
certain non-recurring project activities.
For
2019, the Company's expenses related mostly to costs associated
with the validation process for certain European SFD
®
patents. In 2018, these costs were negative as the Company
renegotiated fees from a provider of R&D services. In 2017
these costs were the result of acquiring patents.
D.
Trend
information.
We have
historically conducted a limited number of service contracts each
year, the dollar value and timing of securing and ultimate delivery
of which are subject to numerous external factors.
As
noted previously, the amount and timing of our annual revenues can
vary widely year to year, as we derive our revenues from a limited
number of service contracts each year and each individual contract
may have a large effect on the aggregate annual revenues and
profits. For example, in 2012, we conducted our first contract with
PEMEX, the National Oil Company of Mexico. This project was
completed in 2012 and was our largest to that time, at US$5.8
million. In 2015, projects totaling US$13 million were completed in
Bolivia for YPFB, then our next survey in Nigeria during 2019 was
for US$8.9 million. At the date of this 20-F current external
trends such as in commodity prices and Covid-19 could affect our
operations for the current fiscal year. Please see Item 1 3B for a
discussion on these risks.
E.
Off-balance
sheet arrangements.
The
Company has no off-balance sheet arrangements as of the date of
this MD&A other than office premise non-lease operating costs
with Interloq Capital (the "Landlord"). If the Company were to
default on its office lease the current month rent including
operation costs plus the next three months become immediately due.
Operating cost amounts are disclosed under the heading
"
Liquidity and Capital Resources
– Contractual Commitments
". NXT pays an estimated
operating cost during the current year, but has the obligation to
pay the actual operating costs incurred as defined in the office
lease with the Landlord early in the first quarter of the preceding
year if the estimate was low, or will receive a refund if the
estimate was too high. Currently, the Company believes that the
current operating cost estimate is reasonable and is constant with
discussions with the Landlord.
F.
Tabular
disclosure of contractual obligations.
The
following table sets forth our outstanding contractual obligations
as at December 31, 2019:
less than
1 to 3
3 to 5
more than
Total
1 year
years
years
5 years
Long-term debt
$
-
$
-
$
-
$
-
$
-
Lease obligations:
Premises
rent
2,102,840
358,712
734,370
734,370
275,388
Premises
operating costs
1,278,949
222,069
445,002
445,002
166,876
Aircraft
Lease
2,031,754
646,204
1,385,550
-
-
Office
equipment
63,210
52,860
10,350
-
-
Purchase obligations
-
-
-
-
-
Other long term liabilities:
Asset
retirement obligation
21,481
-
21,481
-
-
Total
5,498,234
1,279,845
2,596,753
1,179,372
442,264
37
G.
Safe
Harbor.
The Company seeks safe harbor for our forward-looking statements.
Please see the section titled "Forward-Looking
Statements" above.
ITEM 6.
DIRECTORS,
SENIOR MANAGEMENT AND EMPLOYEES
A.
Directors
and senior management.
Our
articles of incorporation provide for a minimum of one director and
a maximum of 15 directors comprising our Board of directors. At
present, our Board of directors consists of six
members.
Our
directors are elected by our shareholders at our annual meeting of
shareholders and hold the position either until the next annual
shareholders' meeting, the date of their resignation or until
a successor is appointed.
The
following sets forth information, including directorships in other
reporting issuers, as of May 5, 2020, for our directors, executive
officers and key employees:
George Liszicasz
Calgary, Alberta, Canada
Director, Chairman
and Chief
Executive Officer
since January
1996;
President since July 2002
Mr.
Liszicasz is the inventor of the SFD
®
Technology and has been Chairman and Chief Executive Officer since
the Corporation's inception in 1996. Mr. Liszicasz' primary
responsibilities, as the President and CEO, are to oversee all
operations and to further develop the SFD
®
technology.
He
holds an Electronics Engineer degree from the Landler Jeno
Technitken in Hungary in 1973 and studied general sciences at the
University of British Columbia between 1979 and 1983. Mr. Liszicasz
has extensive R&D body of work with various technologies, and
52 inventions.
Charles Selby
Calgary, Alberta, Canada
Director
since
January
2006
Mr.
Selby holds a B. Sc. (Hons) in Chemical Engineering, a J.D. degree
and is a registered Professional Engineer in the Province of
Alberta.  He previously practiced law for two large Canadian
law firms, specializing in securities, international transactions
in the energy business and corporate finance matters.  Since
leaving the practice of law,
Mr. Selby was a
Vice President of Pengrowth Corporation, the Administrator of
Pengrowth Energy Trust, for almost 20 years.  He also
has served on the board and in management of a number of reporting
issuers including Arakis Energy, which had operations in the Sudan,
and other issuers in the oil and natural gas industry.
He is
currently the president and a director of Wildcat Royalty
Corporation and Caledonian Midstream Corporation, private entities
which are involved in oil & gas production and the midstream
oil and gas business primarily in the Province of Alberta.  He
is a director of Caledonian Global Corporation, an international
company with royalty interests Vietnam and Chairman and CEO of
Montana Exploration Corp. (formerly AltaCanada Energy Corp.) an oil
and gas company.
Mr.
Selby is the Lead Director of NXT.  He is also Chair of NXT's
Compensation Committee and a member of the Audit, Disclosure, and
Strategic Planning Committees.
Mr.
Selby also served as the Company's Interim Chief Financial Officer
from December, 2017 to January, 2018.
John Tilson
Montecito, California, USA
Director since February 2015
Mr.
Tilson is retired, and after obtaining MBA and CFA designations,
had a distinguished career as an analyst, portfolio manager,
and advisor in the US investment and financial industry with
such firms as Sutro & Company and EF Hutton & Company.
Mr. Tilson joined Roger Engemann and Associates in 1983 when assets
under management were roughly US$160 million. During
his tenure there, the Pasadena Group of Mutual Funds was
started, with Pasadena Capital Corporation formed as the holding
company for the mutual funds and investment management business.
After working as an analyst and portfolio manager, John later
became Executive Vice President & Managing Director of Pasadena
Capital Corporation. Assets under management had grown to over US$5
billion by the time the firm was sold to Phoenix Companies in 1997.
Mr. Tilson later retired in 2005.
From
2006 to 2012, Mr. Tilson was a member of the Board of Trustees,
including three years serving as VP and Chairman of the long-range
planning committee, for Lotusland, a Santa Barbara non-profit
organization established by Madame Ganna Walska.
Mr.
Tilson is the Chair of the Board's Strategic Planning
Committee, and a member of the Compensation, Governance and Audit
Committees.
38
Thomas E. Valentine
Calgary, Alberta, Canada
Director since November 2007
Corporate Secretary since April 2014
Mr.
Valentine is a Partner with Norton Rose Fulbright Canada LLP, where
he has practiced law, both as a Barrister and a Solicitor, since
his call to the Bar in 1987. He is a member of the firm's
Energy and Infrastructure Practice Group and is involved in energy
and energy related matters throughout the Middle East, North
Africa, the CIS, Asia and South America.
Mr.
Valentine is a member of the Board of Directors of Touchstone
Exploration Inc., and formerly was a director of two other Canadian
public companies, Calvalley Petroleum Inc. (to May 2015) and Veraz
Petroleum Ltd.
Mr.
Valentine holds a BA from the University of British Columbia, a LLB
from Dalhousie University, and a LL.M. from the London School of
Economics.
Mr.
Valentine is the Chair of the Governance Committee and a member of
the Compensation Committee.
Bruce G. Wilcox
New York, New York, USA
Director since June 2015
Mr.
Wilcox has had a long career as an investment company CEO, analyst
and portfolio manager. He spent most of his career with Cumberland
Associates, LLC, a New York equity fund, from 1986 through
retirement in 2010, progressing from analyst / portfolio manager to
partner, and Chairman of the Management Committee. Mr. Wilcox
specialized in Cumberland's investments in the energy industry
(E&P and service companies), with an emphasis on value and
long-term holdings. During his tenure, the fund's assets under
management ranged from US$0.7 to $1.5 billion.
From
1984 to 1986, Mr. Wilcox was with Central National-Gottesman, Inc.
as an analyst and portfolio manager on a team responsible for a
$500 million listed equity portfolio.
Mr.
Wilcox is presently CEO of E Street Management, LLC which manages a
long/short equity fund of funds. He is also one of the managing
members of Xiling Fund III, LLC, part of a series of private equity
funds (US$100+ million) which specialize in investing in museum
quality Chinese art and collectibles.
Mr.
Wilcox obtained a BA (Honors), in Modern Chinese from the
University of California, Santa Barbara, and a Master of
International Management from the American Graduate School of
International Management in Phoenix.
Mr.
Wilcox is a member of several Boards, including the Teachers
College of Colombia University (2003 to date, including acting as
the Chair of the Investment Committee), the University of
California Santa Barbara Foundation (2003 to date, including as
former Chair of the Board, Investment and Finance Committees), and
is a Trustee (2001 to date) of the Manhattan Institute For Policy
Research, a leading urban, state, and national policy institution,
which works on matters such as energy policy.
Mr.
Wilcox is the chair of the Board's Audit Committee and a member of
the Disclosure, Governance and Strategic Planning
Committees.
Frank Ingriselli
Danville, California, USA
Director since September 2019
Mr.
Ingriselli has over 40 years of experience in the energy industry,
Mr. Ingriselli is a seasoned leader and entrepreneur with
wide-ranging energy industry experience in diverse geographies,
business climates and political environments.
Mr.
Ingriselli has over 40 years of experience in the energy industry,
Mr. Ingriselli is a seasoned leader and entrepreneur with
wide-ranging energy industry experience in diverse geographies,
business climates and political environments.
From
1979 to 2001, Mr. Ingriselli worked at Texaco in a variety of
senior executive positions involving exploration and production,
power and gas operations, merger and acquisition activities,
pipeline operations and corporate development.  While at
Texaco, Mr. Ingriselli held the position of President of Texaco
Technology Ventures, President and CEO of the Timan Pechora Company
(owned by affiliates of Texaco, Exxon, Amoco, Norsk Hydro and
Lukoil), and President of Texaco International Operations, where he
directed Texaco's global initiatives in exploration and
development.  During his tenure, Mr. Ingriselli, also led
Texaco's initiatives in exploration and development in China,
Russia, Australia, India, Venezuela and many other
countries.
From
2005 to 2018, he was the founder, President, CEO and Chairman of
PEDEVCO Corp. and Pacific Asia Petroleum, Inc., both energy
companies which are or were listed on the New York or American
stock exchanges.  From 2016 through 2019, Mr. Ingriselli was
the founder, President and CEO of Blackhawk Energy Ventures Inc.
which endeavored to acquire oil and gas assets in the U.S. for
development purposes.
Currently
Mr. Ingriselli is the President of Indonesia Energy Corporation and
is a member of the Board of Directors of DataSight Corporation.
 Mr. Ingriselli serves on the Board of Trustees of the Eurasia
Foundation, and is the founder and Chairman of Brightening Lives
Foundation, Inc., a US Section 501(c)(3) public charitable
foundation.
Mr.
Ingriselli graduated from Boston University with a B.S. in business
administration. He also earned an M.B.A. from New York University
in both finance and international finance and a J.D. from Fordham
University School of Law.
Mr.
Ingriselli is a member of NXT's audit committee.
Eugene Woychyshyn
Calgary, Alberta, Canada
VP Finance and CFO since December 2018
Mr.
Woychyshyn originally served as a consultant to NXT since late
November 2017 providing controllership services. Mr. Woychyshyn
brings to NXT over 25 years of leadership experience in multiple
industries and worldwide regions including North America, Europe
and Asia. He has extensive hands-on experience and accomplishments
in mergers and acquisitions, organizational restructuring,
purchasing, treasury, financial reporting and control, compliance,
human resource management and tax planning. In almost ten years as
an expatriate with assignments in Norway, China, the U.S. and South
East Asia he developed international business
competencies.
Mr.
Woychyshyn is a Chartered Professional Accountant, CA, who holds a
Bachelor of Commerce (Hons.) from the University of Manitoba and a
Masters of Business Administration from St. Joseph's
University, Philadelphia PA.
Mr.
Woychyshyn is a member of the Disclosure Committee.
39
None of
the directors or executive officers is, or has been in the last ten
years, a director, chief executive officer or chief financial
officer of any company that: (i) was subject to a cease trade or
similar order or an order that denied the relevant company access
to any exemption under securities legislation for a period of more
than 30 consecutive days that was issued while the director was
acting in that capacity; (ii) was subject to such an order that was
issued after the proposed director ceased to be a director, chief
executive officer or chief financial officer and which resulted
from an event that occurred while that person was acting in such a
capacity.
None of
the directors or executive officers is, or has been in the last ten
years, a director or executive officer of any company that, while
that person was acting in that capacity, or within a year of that
person ceasing to act in that capacity, became bankrupt, made a
proposal under any legislation relating to bankruptcy or insolvency
or was subject to or instituted any proceedings, arrangement or
compromise with creditors or had a receiver, receiver manager or
trustee appointed to hold its assets, other than as discussed
below.
Charles
Selby was previously a member of the board of directors of
Wellpoint Systems Inc. ("Wellpoint", a reporting issuer
on the TSX-V), which in 2011 had a Receiver appointed by the Court
of Queen's Bench of the Province of Alberta on behalf of the
holders of secured debts.  Wellpoint was subsequently wound up
following a restructuring and sale of its operating assets. 
Charles Selby was previously a member of the board of directors of
Idaho Natural Resources Corp., which was cease-traded by the TSX
Venture Exchange in December 2012 for failing to meet listing
requirements.  A cease trade order was issued by the Alberta
Securities Commission on May 4, 2018 against Montana Exploration
Corp. ("MEC") for failing to file its annual audited
financial statements, annual management's discussion and
analysis and certification of annual filings within the required
time period.  Charlies Selby is the Chief Executive Officer of
MEC.  The TSX Venture Exchange has announced that upon
revocation of the Cease Trade Order, MEC's shares will remain
suspended until the company meets TSX Venture Exchange
requirements.
None of
the directors or executive officers has, within the last ten years,
become bankrupt, made a proposal under any legislation relating to
bankruptcy or insolvency, or become subject to or instituted any
proceedings, arrangement or compromise with creditors or had a
receiver, receiver manager or trustee appointed to hold their
assets.
Messrs.
Tilson, Valentine, Ingriselli, and Wilcox are considered
"independent" within the meaning of Canadian securities
law.
B.
Compensation
Executive Compensation
The
following table sets out certain information regarding the annual
and long-term compensation of the Chief Executive Officer, the
Chief Financial Officer at December 31, 2019, as well as any
additional individuals for whom disclosure would have been provided
pursuant to the above criteria except that the individual was not
serving as an officer of the Company at the end of 2019. All
officers of the Company are based in the Calgary, Canada head
office and are paid in Canadian dollars.
Summary
compensation table for the year ended December 31,
2019:
Name & Principal Position
Salary
Stock Options
Vacation
(1)
Other
(2)
Total
George Liszicasz, President & CEO
(4)
$
274,800
$
-
$
-
$
11,145
$
285,945
Eugene Woychyshyn, VP of Finance & Chief
Financial Officer
(6)
$
174,167
$
-
$
-
$
1,227
$
175,394
(1)
"Vacation" represents a cash payout in the year of a
portion of unused vacation entitlements carried
forward.
(2)
"Other" consists of any vehicle allowance paid ($9,000
for Mr. Liszicasz) plus the taxable portion of company paid amounts
for group health benefits and parking.
(3)
Salary and other totals exclude the cash portion of fees earned as
Board Members, $35,000 for Mr. Liszicasz.
(4) Mr.
Eugene Woychyshyn became the Corporate Controller as of November 1,
2018, the Interim Chief Financial Officer from December 1, 2018 and
then the VP-Finance, Chief Financial Officer as of August 1,
2019.
(See
Item 6.E "Share Ownership" for details regarding stock
options granted to officers).
No
amount is set aside or accrued by the Company or its subsidiaries
to provide pension, retirement or similar benefits to officers or
directors.
Director Compensation
NXT
compensates directors for serving on our Board by paying a
combination of an annual cash retainer as well granting stock
options to purchase NXT common shares. New members who join the
Board receive a separate grant of stock options (with entitlement
to exercise vesting over a 3 year period) in the year of joining
the Board. There were was one new Board member in 2019 and no
options were granted to Board members.
40
In
2019, the directors each individually elected to receive cash as
payment of Board fees earned for the year. The annual cash retainer
was based on $30,000 ($35,000 in the case of each of the Chairman
of the Board and the Audit Committee.) Compensation payable
(including pro-rated amounts for periods of partial service in the
year) for 2019 is summarized as follows:
2019
George
Liszicasz
$
35,000
Charles
Selby
30,000
Bruce
G. Wilcox
35,000
Tom
Valentine
30,000
John
Tilson
30,000
Frank
Ingriselli
9,750
The
amount and terms of any stock options granted as compensation for
Board member services is determined by the Board. We do not provide
additional compensation for committee participation (other than as
noted previously re the minor additional amount for service as the
Chairman of the Board and of the Audit Committee) or for special
assignments of the Board. (See Item 6.E "Share
ownership" for details regarding stock options granted to
directors.)
The
Company reimburses directors for out-of-pocket expenses for
attending Board and committee meetings. We do not provide
termination benefits for directors.
C.
Board
practices.
Expiration Dates
No
director or member of our administrative, or supervisory bodies has
an expiration date for their current term of office. Directors are
elected by shareholders at the annual meeting of shareholders and
hold the position either until the next annual shareholders'
meeting or until a successor is appointed. The period during which
each individual has served as a director is set out in the table
under Item 6.A – "Directors and senior
management".
Service Contracts
No
directors (other than an employment contract for the CEO, Mr.
Liszicasz) have service contracts with the Company or any of its
subsidiaries that provide benefits upon termination of
employment.
Board of Directors Mandate
The
principal role of the Board is stewardship of the Company through
the creation of shareholder value, including the protection and
enhancement of the value of its assets, as the fundamental
objective. The stewardship responsibility means that the Board
oversees the general operation of the business and management,
which is responsible for the day-to-day conduct of the business.
The Board must assess and ensure systems are in place to manage the
risks of the Company's business with the objective of
preserving the Company's assets. The Board, through the CEO,
sets the attitude and disposition of the Company towards compliance
with applicable laws, environmental, safety and health policies,
financial practices and reporting. In addition to its primary
accountability to shareholders, the Board is also accountable to
employees, government authorities, other stakeholders and the
public. The Mandate of the Board of directors is posted on the
Company website and may viewed at www.nxtenergy.com or you may
request a copy be mailed to you by writing to our offices at Suite
302, 3320 - 17th Avenue SW Calgary, Alberta, Canada, T3E
0B4.
Board Committees
CORPORATE
GOVERNANCE COMMITTEE
The
Company and the Board recognize the importance of corporate
governance to the effective management of the Company and to its
shareholders. The Company's approach to significant issues of
corporate governance is designed with a view to ensuring that the
business and affairs of the Company are effectively managed so as
to enhance shareholder value. The Mandate of the Corporate
Governance Committee is posted on the Company website and may be
viewed at www.nxtenergy.com or you may request a copy be mailed to
you by writing to our offices at Suite 302, 3320 - 17th Avenue SW
Calgary, Alberta, Canada, T3E 0B4.
The
Board and management endorse the need to establish forward-looking
governance policies and to continuously evaluate and modify them to
ensure their effectiveness.
41
Composition of the Corporate Governance Committee
Messrs.
Valentine (Chair), Wilcox and Tilson are the current members of the
Corporate Governance Committee. All members of the Corporate
Governance Committee are independent within the meaning of Canadian
National Instrument 58-101.
Responsibilities of the Corporate Governance Committee
The
Corporate Governance Committee's duties, as outlined in its
charter, are to deal with the Company's approach to corporate
governance and the promotion of compliance with industry and
regulatory standards. The committee is responsible for overseeing
and assessing the functioning of the Board and the committees of
the Board and for the development, recommendation to the Board,
implementation and assessment of effective corporate governance
principles and guidelines. The Committee's responsibilities
also include identifying new candidates for director and
recommending that the Board select qualified director candidates
for election at the next annual meeting of
shareholders.
DISCLOSURE
COMMITTEE
Composition of the Disclosure Committee
The
Disclosure Committee currently consists of Mr. Selby, Mr. Wilcox
(Chair) and Mr. Woychyshyn (the Corporate Controller and Interim
CFO of the Company).
Responsibilities of the
Disclosure
Committee
The
Disclosure Committee's duties are to ensure that the Company
provides timely, accurate and balanced disclosure of all material
information about the Company and to provide fair and equal access
to such information. All news releases, including but not limited
to releases of material information, are managed by the Disclosure
Committee. If the information has been determined by the Disclosure
Committee to be material, news releases will be prepared, reviewed
and then disseminated through a news-wire service that provides
simultaneous service to widespread news services and financial
media. Additionally, the Disclosure Committee is responsible for
ensuring public disclosure through filing these news releases on
SEDAR, EDGAR, and our website.
STRATEGIC
PLANNING COMMITTEE
Composition of the Strategic Planning Committee
Messrs.
Tilson (Chair), Wilcox and Selby are the current members of the
Strategic Planning Committee. Messrs. Tilson (Chair) and Wilcox are
independent.
Responsibilities of the Strategic Planning
Committee
The
Strategic Planning Committee's duties are to set out the long-term
goals of the Company and to take an active role in the development
and execution of plans to achieve those goals. The Committee
participates in establishing priority areas of Company business,
assessment of strategic initiatives from Company senior executives
with regard to development and implementation control of the
Company Strategy and business area specific strategies of the
Company. The Committee also makes recommendations regarding the
overall organization and management structure including areas where
management needs to be strengthened, reviewing the organizational
job descriptions, requirements and also procedures for coordination
of organizational management and board resources. The Committee is
actively involved in the Company's strategic planning process
and reviews all materials relating to the strategic plan with
management. The Board is responsible for reviewing and approving
the strategic plan. At least one board meeting each year is
centered on discussing and considering the strategic plan, which
takes into account the risks and opportunities of the business.
Management must seek the Board's approval for any transaction
that would have a significant impact on the strategic
plan.
42
AUDIT
COMMITTEE
Composition of the Audit Committee
The
Audit Committee consists of Messrs. Wilcox (Chair), Selby,
Ingriselli, and Tilson. Messrs. Wilcox (Chair), Ingriselli, and
Tilson are independent and each member is financially literate. The
Company's Audit Committee Charter is posted on our website
and may be viewed at www.nxtenergy.com or you may request a copy be
mailed to you by writing to our offices at Suite 302, 3320 –
17
th
Avenue SW, Calgary, Alberta, Canada, T3E 0B4.
Bruce G. Wilcox
Mr.
Wilcox holds a Master of International Management from the American
Graduate School of International Management in Phoenix. His career
as an investment company CEO, analyst and portfolio manager was
spent primarily with Cumberland Associates, LLC, and a New York
equity fund, where he was a partner, and served as Chairman of the
Managing Committee. He has previously served as audit committee
chair of a publicly traded company.
Charles Selby
Mr.
Selby is both a
lawyer
and
Professional Engineer, with past legal experience specializing in
securities and corporate finance matters.  He has served on
the board or in senior management roles with a number of private
firms as well as reporting issuers in the oil and natural gas
industry.
Mr.
Selby has previously served on the audit committees of Alta Canada
Energy Corp. and served as the audit committee chairman for Idaho
Natural Resources Corp. (formerly Bridge Resources
Corp.).
John Tilson
Mr.
Tilson is retired, and after
obtaining
MBA and CFA designations, had a distinguished career as an analyst,
portfolio manager, and advisor in the US investment and
financial industry with such firms as Sutro & Company
and EF Hutton & Company.
All
members of the Audit Committee have the educational background and
experience that provides them with the knowledge and ability to
understand accounting policies and related financial reporting and
disclosure issues, in order to fulfill their duties and
responsibilities as an Audit Committee member.
Frank Ingriselli
Mr.
Ingriselli graduated from Boston University with a B.S. in business
administration. He also earned an M.B.A. from New York University
in both finance and international finance and a J.D. from Fordham
University School of Law.
All
members of the Audit Committee have the educational background and
experience that provides them with the knowledge and ability to
understand accounting policies and related financial reporting and
disclosure issues, in order to fulfill their duties and
responsibilities as an Audit Committee member.
Audit Committee Oversight
-
The Company's Board has adopted all
recommendations by the Audit Committee with respect to the
nomination and compensation of the external auditor.
43
Pre-Approval Policies and Procedures
-
The Audit
Committee has adopted a formal policy requiring the pre-approval of
all audit and non-audit related services to be provided by
the
Company's
principal
auditor prior to the commencement of the engagement, subject to the
following:
●
the Audit Committee
will review annually a list of audit, audit related, recurring tax
and other non-audit services and recommend pre-approval of those
services for the upcoming year. Any additional requests will be
addressed on a case-by-case specific engagement basis;
●
for engagements not
on the pre-approved list, the Audit Committee has delegated to the
Chair of the Committee the authority to pre-approve individual
non-audit service engagements with expected costs of up to $50,000
(annual aggregate total) subject to reporting to the Audit
Committee, at its next scheduled meeting; and
●
for engagements not
on the pre-approved list and with expected costs greater than
$50,000 (annual aggregate total), the entire Audit Committee must
approve this service, generally at its next scheduled
meeting.
COMPENSATION
COMMITTEE
Composition of
the
Compensation
Committee
Messrs.
Selby (Chair), and Tilson and Valentine are members of the
Compensation Committee. Messrs. Tilson and Valentine are
independent. The charter or mandate of the Compensation Committee
is posted on the Company website and may viewed at
www.nxtenergy.com or you may request a copy be mailed to you by
writing to our offices at 302, 3320 – 17
th
Avenue SW, Calgary,
Alberta, Canada, T3E 0B4.
Responsibilities of
the
Compensation
Committee
The
Compensation Committee's duties, as outlined in its charter, are to
deal with the assessment of management and succession to key
positions and compensation within the Company. The Compensation
Committee shall assist the Board in discharging the Board's
oversight responsibilities relating to the compensation and
retention of key senior management employees, and in particular the
CEO, with the skills and expertise needed to enable the Company to
achieve its goals and strategies at fair and competitive
compensation and appropriate performance incentives. In discharging
its responsibilities, the Compensation Committee will report and
where appropriate, make recommendations to the Board in respect of
the matters identified in the charter.
D.
Employees
Fiscal year ended December 31, 2019
As of
the fiscal year ended December 31, 2019, we had a total of 10
employees. NXT has no employees that are members of a labor union.
The following summarizes the number of employees and independent
contractors by main job function as at December 31,
2019
:
Function
employees
contractors
total
Senior
management team
2
-
2
Finance,
administration and sales
2
-
2
Operations
and technical development
6
-
6
Total
10
-
10
All of
the above noted staff are based in Calgary, Canada. The 6
operations and technical development staff includes one research
scientist holding a Ph.D. and 3 geoscientists. We periodically
engage other technical and administrative contract personnel as
required on a project basis.
44
Fiscal year ended December 31, 2018
As at
December 31, 2018, we had a staff of 11, all based in Calgary, as
follows:
Function
employees
contractors
total
Senior
management team
2
-
2
Finance,
administration and sales
3
-
3
Operations
and technical development
6
-
6
Total
11
-
11
All of
the above noted staff are based in Calgary, Canada. The 6
operations and technical development staff included one research
scientist holding a Ph.D. and 3 geoscientists.
E.
Share
ownership.
Information
on the ownership of our common shares is given under Item 7, Major
Shareholders and Related Party Transactions.
Summary of Stock Options, Restricted Share Units and Stock
Appreciation Rights Granted To Executive Officers and
Directors
All
stock options have been granted pursuant to the Stock Option Plan
(the "Plan") of the Company or predecessor plans with
substantially the same terms. The Plan is approved and ratified by
shareholders every three years at the Company's annual
general meeting ("AGM"). The Plan, as was re-approved
and ratified at the Company's AGM held on June 25, 2019.
Pursuant to this Plan, all stock option grants must be approved by
the Board of directors of the Company. Stock options
may be granted to the directors, officers and
employees of NXT and to consultants retained by the Company. The
aggregate number of common shares reserved for issuance under this
Plan, and any other plan of the Corporation, shall not, at the time
of the stock option grant, exceed ten percent of the total number
of issued and outstanding shares (calculated on a non-diluted
basis) unless the Company receives the permission of the stock
exchange or exchanges on which the shares are then listed to exceed
such threshold. No stock option shall be exercisable for a period
exceeding five (5) years from the date the stock option is granted
unless the Company receives the permission of the stock exchange or
exchanges on which the shares are then listed and as specifically
provided by the Board and as permitted under the rules of any stock
exchange or exchanges on which the shares are then listed, and in
any event, no stock option shall be exercisable for a period
exceeding ten (10) years from the date the option is
granted.
Stock options are generally issued with a three year vesting period
wherein entitlement to exercise one third of the options granted
shall vest at the end of each of the first three years following
the grant date. The exercise price for an option grant is set at
the last trade price on the date preceding the grant or some higher
price at the discretion of the Board.
The Restricted Share Unit Plan (the"RSU") was approved
and ratified by the shareholders at the Company's annual
meeting on June 21, 2017.
Pursuant to the RSU, all grants
must be approved by the Board of directors of the Company.
RSU's
may be granted to the
directors, officers and employees of NXT and to consultants
retained by the Company. The aggregate number of common shares
reserved for issuance under this Plan, and any other plan of the
Corporation, shall not, at the time of the RSU grant, exceed ten
percent of the total number of issued and outstanding shares
(calculated on a non-diluted basis).
45
The RSU's are generally issued with a three year vesting
where they shall vest at the end of each of the first three years
following the grant date. The price is determined on the vesting
date.
The Deferred Share Unit Plan (the "DSU Plan") was
approved and ratified by the shareholders at the Company's
annual meeting on June 25, 2019. The DSU Plan is a long-term
incentive plan that permits the grant of deferred share units
("DSUs") to qualified directors, as determined by the Board in its
absolute discretion (collectively, the "Designated Participants").
Designated Participants are required to elect (in respect of each
calendar year) the amount of the aggregate annual retainer or fee
to be received in the form of DSUs, cash, Common Shares purchased
on the secondary market, or a combination thereof, subject to
requirements imposed by the Board to receive a
specified
minimum
value of his or her annual retainer or fee in the form of DSUs.
DSUs granted under the DSU Plan are to be settled at the election
of the Board in cash, Common Shares issued from treasury (subject
to Shareholder approval of unallocated entitlements thereunder
every three years thereafter), or, at the election of the Board, or
a combination of cash and Common Shares.
The
following stock options and DSUs were granted to NXT's
executive officers and directors in the three prior fiscal years
ended December 31, 2019, 2018 and 2017 and to date to May 5, 2020.
No RSUs have been granted to date.
In 2019 and to date in 2020:
●
A total of 16,573
DSUs were granted on March 31, 2020 to a director of the
Company.
In 2018:
●
A total of
1,000,000 stock options with an exercise price of $1.13 per common
share were granted in February 2018 to the new Chief Financial
Officer. These options were forfeited on December 30,
2018.
●
A total of 150,000
stock options with an exercise price of $0.59 per common share were
granted in November 2018 to the new Corporate
Controller.
In 2017
:
●
No options were
granted in 2017.
The
following table sets forth information regarding outstanding stock
options which have been granted to our directors and officers as of
May 5, 2020. All options are issued at an exercise price
set at the closing trade price on the
trading date prior to the grant.
Each option entitles the
option holder to acquire one common share of the
Company.
46
Issued and outstanding stock options held by directors and officers
of the Company
(as of May 5, 2020)
Name and
Position
Exercise
Price
Option
Grant
Date
Option
Expiry
Date
# of
options
held
% of total
outstanding
options
Eugene Woychyshyn
$
0.59
01-Nov-18
01-Nov-23
150,000
V-P
Finance & CFO
150,000
16.1
%
Charles Selby
$
1.50
22-Jul-16
22-Jul-21
50,000
Director
50,000
5.4
%
John Tilson
$
2.10
16-Sep-15
16-Sep-20
150,000
Director
$
1.73
10-Dec-15
10-Dec-20
25,600
$
1.48
14-Jul-16
14-Jul-21
15,000
$
1.45
21-Dec-16
21-Dec-21
15,000
205,600
22.0
%
Thomas Valentine
$
1.48
14-Jul-16
14-Jul-21
7,500
Director
$
1.45
21-Dec-16
21-Dec-21
7,500
15,000
1.6
%
Bruce G. Wilcox
$
2.10
16-Sep-15
16-Sep-20
150,000
Director
$
1.73
10-Dec-15
10-Dec-20
17,000
$
1.48
14-Jul-16
14-Jul-21
15,000
$
1.45
21-Dec-16
21-Dec-21
15,000
197,000
21.1
%
Total number of stock options held by officers and
directors
617,600
66.2
%
Charles
Selby currently has 16,573 DSUs.
ITEM
7.
MAJOR
SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
A.
Major
shareholders.
The
following table sets forth information concerning the beneficial
ownership of our common shares as of
May 5,
2020 by persons who beneficially own 5% or more of the outstanding
common shares of NXT, each person who is a director of NXT, each
executive officer named in this Form 20-F, each individual
referenced in Item 6.E above and all directors and executive
officers as a group. For the purposes of this Form 20-F, a person
is considered to be a "beneficial owner" of common
shares in the Company if that person has, or shares with another
person, the power to direct the vote or disposition of the common
shares or to receive the economic benefit of ownership of the
common shares.
A
person is also deemed to be a beneficial owner of a common share if
that person has the right to acquire the share within 60 days by
option or other agreement (whether or not, in the case of a stock
option, the current market price of the underlying common share is
below the stock option exercise price). Therefore, the table below
also reflects, for each such beneficial owner, the number of
options exercisable into common shares within 60 days of May 5,
2020 that are owned by each beneficial owner, but, in determining
the percentage ownership and general voting power of such person,
does not assume the exercise of options or the conversion of
securities owned by any other person.
We
believe that the beneficial owners of common shares listed below,
based on information they furnished, have sole voting and
investment power over the number of shares listed opposite their
names. The percentage of beneficial ownership is based on
64,406,891 common shares issued and outstanding as of May 5, 2020.
This total of 64,406,891 excludes all outstanding options and
warrants that are exercisable within 60 days of May 5, 2020 (which
is adjusted for each individuals' % purposes as noted in
footnote 4 below).
47
Beneficial
Ownership of Directors and Officers
("D&O")
Beneficially
Owned as
at
May 5,
2020
Percent
of
Common
Shares
4
Directors
and Officers:
George
Liszicasz
1 &
2
15,014,617
23.31
%
Charles
Selby
1
458,161
*
3
John
Tilson
1
3,832,850
5.95
%
Thomas
E. Valentine
1
15,000
*
3
Bruce
G. Wilcox
1
562,000
*
3
Eugene
Woychyshyn
2
146,200
*
3
Total
D & O Common Shares
20,028,828
31.10
%
Major
Shareholders (> 5%):
Alberta
Green Ventures Limited Partnership
6,764,945
10.50
%
Mork
Capital Management, LLC.
5,717,420
8.88
%
1
Director
of NXT
2
Officer
of NXT
3
Beneficially
owns less than one percent of the total outstanding common
shares.
4
For each beneficial
owner's percentage of common shares calculation, it is
assumed that any stock options that they hold which are or will
become exercisable within 60 days of May 5, 2020 have been
exercised (while also assuming that no one else similarly
exercises), and such options are thus included in both the
numerator and denominator for purposes of each of their own
individual calculations as
follows:
common
vested &
shares
exercisable
Pro forma
held
options
total
Liszicasz
15,014,617
-
15,014,617
Selby
408,161
50,000
458,161
Tilson
3,627,250
205,600
3,832,850
Valentine
-
15,000
15,000
Wilcox
365,000
197,000
562,000
Woychyshyn
46,200
100,000
146,200
19,461,228
567,600
20,028,828
Major
changes in the last 3 years in the percentage ownership of persons
who beneficially own (as at the respective December 31, year-end
dates) 5% or more of the outstanding common shares of NXT
were:
1.
Mr.
Liszicasz entered into a matrimonial settlement dated December 23,
2019 that includes the transfer of 800,000 NXT common shares to his
former spouse by March 31, 2020.
2.
Since
May 5, 2019 Mr. Liszicasz, Mr. Tilson, and Mr. Wilcox acquired
common shares in acquisitions on the public markets.
3.
In
December 2019 the Company completed the $1,250,000 targeted issuer
bid, purchasing for cancellation 4,166,667 common shares in the
capital of the Company from AGV, representing approximately 6.08%
of the total outstanding Common Shares as of November 14, 2019, at
a price of C$0.30 per Common Share.
4.
In July
2018, the company completed the Private Placement with AGV. In
total, AGV purchased 10,264,946 Units at a price of $0.924 per
Unit for total gross proceeds of approximately $9,484,810. As a
result of the Private Placement, a total of 10,264,946 common
shares and a total of 3,421,648 warrants were issued to the
Subscriber. As of October 31, 2019 AGV's 3,421,648 warrants
("Warrants") expired.
NXT is
a foreign private issuer for its current fiscal year. As of the
last business day of the Company's first fiscal quarter, the
majority of the Company's executive officers and directors
are Canadian citizens who reside in Canada, the majority of the
Company's assets are in Canada and the Company is
administered principally in Canada. The Company's major
shareholders in common shares have the same voting rights as other
holders of common shares. The Company is not directly or indirectly
owned or controlled by another corporation, a foreign government or
any other natural or legal persons severally or jointly. There are
no arrangements known to the Company which may result in a change
of control of the Company.
48
B.
Related
party transactions.
Summarized
below are certain other transactions and business relationships
between NXT and persons who are related parties, for the current
fiscal year ended December 31, 2019 through the current date, May
5, 2020:
●
Details of stock
options which have been granted to related parties during the above
noted period are included with Item 6.E above. No stock options
have been exercised by related parties in this period.
●
One of the members
of NXT's Board of directors, Mr. Thomas Valentine is a
partner in the law firm Norton Rose Fulbright, which provides legal
advice to NXT. In 2019, NXT incurred legal expenses of $276,261
with this firm, for which a total of $146,197 is included in
accounts payable as at December 31, 2019. Norton Rose Fulbright
continues to provide legal services to NXT. In 2020 as of the
report date, total fees incurred are $87,513 for which $104,694 is
still outstanding.
●
There were no stock
options to acquire common shares of the Company exercised in 2019
by persons who were directors or officers of NXT as at the date of
their exercise.
●
In the fourth
quarter of 2019 the Company completed the $1,250,000 targeted
issuer bid, purchasing for cancellation 4,166,667 common
shares.
●
In February 2019,
NXT entered into a Co-operative Agreement with AGV, for AGV to
bring to proposal up to three SFD
®
surveys for cooperation with the Company within two years. The
Co-operative Agreement is based on a cost-plus formula and a gross
overriding royalty interest in oil and gas production arising on
lands subject to the surveys. The Company received a US$100,000
non-refundable deposit paid in connection with the Co-operative
Agreement in the second quarter of 2019. Pursuant to the
Co-operation Agreement, the deadline to complete at least one of
three SFD
®
surveys is June 30, 2020.
●
In September 2019,
the Company advanced US$250,000 (the "Principal Amount") to AGV for
the purpose of furthering the shared objectives of NXT and AGV
under the Co-operation Agreement. On April 13, 2020, NXT elected to
receive and directed AGV to deliver US$250,000 as repayment of the
Principal Amount (the "Principal Repayment).
●
Common share
purchase warrants held by AGV have expired as of October 31,
2019.
C.
Interests
of experts and counsel.
Not
applicable.
ITEM
8.
FINANCIAL
INFORMATION
A.
Consolidated
statements and other financial information.
The
Company's consolidated financial statements are stated in
Canadian dollars and are prepared in accordance with U.S. generally
accepted accounting principles.
The
financial statements and notes thereto as required under Item 8 are
attached as Exhibit 15.1 to this annual report and are incorporated
by reference herein. The audit report of KPMG LLP is included
therein immediately preceding the consolidated financial statements
and is also incorporated by reference herein.
No
significant events or changes have occurred subsequent to the date
of the December 31, 2019 consolidated financial statements, except
as otherwise disclosed therein.
Legal Proceedings
To the
best of the Company's knowledge, there are no legal or arbitration
proceedings existing or pending which have had or may have,
significant effects on the Company's financial position or
profitability and no such proceedings are pending or known to be
contemplated by governmental authorities.
49
Dividend Policy
The
Company does not pay dividends.
B.
Significant
Changes.
As of
May 5, 2020, there have not been any significant subsequent events
which have occurred subsequent to the date of consolidated
financial statements for the year ended December 31, 2019.
NXT's interim, unaudited consolidated financial statements
for the 3-month period ended March 31, 2020 will be released in
mid-May, 2019.
ITEM
9.
THE
OFFER AND LISTING
A.
Offer and listing details.
Our common shares are currently quoted in the U.S. on the OTC
Markets QB Exchange under the symbol "NSFDF", in Canada
on the TSX under the symbol "SFD". There have been no
trading suspensions over the last three years.
B.
Plan of distribution.
Not
applicable.
C.
Markets.
Our common shares are currently quoted in the U.S. on the OTC
Markets QB Exchange under the symbol "NSFDF", in Canada
on the TSX-V under the symbol "SFD.V" (to March 21,
2016) and on the TSX under the symbol "SFD" effective
from March 22, 2016, and in Europe on the
Frankfurt and
Berlin Exchanges (both of these listings are inactive) under the
symbol "EFW".
The
Company's common shares commenced trading on the US
Over-The-Counter Bulletin Board pursuant to a reverse takeover
transaction in 1996, and were approved for listing on the Frankfurt
and Berlin Exchanges in January 2004, and on the TSX-V in December
2007. Effective March 22, 2016, NXT upgraded its Canadian listing
from the TSX-V to the TSX.
D.
Selling shareholders.
Not
applicable.
E.
Dilution.
Not
applicable.
F.
Expenses of the issue.
Not
applicable.
ITEM 10.
ADDITIONAL
INFORMATION
A.
Share
capital.
Not
applicable.
50
B.
Memorandum
and articles of association.
NXT was
incorporated in the State of Nevada in 1994. With respect to the
foregoing items, the law applicable to NXT in the Province of
Alberta is not significantly different from that in the State of
Nevada. NXT was established in Alberta pursuant to a Certificate of
Continuance issued October 24, 2003 by the Registrar of
Corporations of the Province of Alberta. NXT's Alberta
Corporate Access Number is 2010730915. The Articles of Continuance
of NXT were amended to create the Series 1 Preferred Shares on
December 28, 2006, and provide that there are no restrictions on
the nature of the business that may be carried on by NXT. On
September 19, 2008, pursuant to Articles of Amendment, the name of
the Company was changed from Energy Exploration Technologies Inc.
to NXT Energy Solutions Inc.
Quorum
The
Board of directors of NXT may fix the quorum for meetings of the
Board or of a committee of the Board, but unless so fixed, a
majority of the directors or of a committee of directors holding
office at the time of the meeting constitutes a quorum provided
that no business may be transacted unless at least half of the
directors present are resident Canadians. Business cannot be
transacted without a quorum. A quorum of directors may vote on any
matter of business properly brought before the meeting provided
that where a director is a party to a material contract or proposed
material contract or is a director or an officer of or has a
material interest in any person who is a party to a material
contract or proposed material contract with NXT, such director must
disclose his or her interest at the earliest possible date, request
the conflict be noted in the minutes of the meeting and with few
exceptions, refrain from voting on the matter in which the director
has a conflict of interest. There is no limitation on the Board of
directors to vote on matters of their remuneration as a director,
officer, employee or agent of NXT or of an affiliate of
NXT.
Borrowing Powers
The
Board of directors may, without authorization of the shareholders
of NXT:
(a)
borrow money on the
credit of NXT;
(b)
issue, reissue,
sell or pledge debt obligations of NXT;
(c)
subject to
restrictions respecting financial assistance prescribed in the
ABCA, guarantee, on behalf of NXT, the performance of an obligation
of any person; and
(d)
mortgage,
hypothecate, pledge or otherwise create a security interest in all
or any property of NXT, owned or subsequently acquired, to secure
any obligation of NXT.
The
Board of directors of NXT may, by resolution, delegate to a
director, a committee of directors or an officer all or any of the
foregoing borrowing powers.
Directors
A
person is qualified to be or stand for election as a director
provided such person is at least 18 years of age, is not bankrupt
and is not mentally incapacitated pursuant to applicable mental
health legislation of the Province of Alberta or pursuant to an
order of the courts of the Province of Alberta. There is no
provision in NXT's Articles or By-Laws relating to the
retirement or non-retirement of directors under an age limit
requirement. There is also no requirement in NXT's Articles
or By-Laws for a director to hold securities of NXT.
Pursuant
to the ABCA, a director or officer shall not be disqualified by his
office, or be required to vacate his office, by reason only that he
is a party to, or is a director or officer or has a material
interest in any person who is a party to, a material contract or
proposed material contract with NXT or subsidiary thereof. Such a
director or officer shall, however, disclose the nature and extent
of his interest in the contract at the time and in the manner
provided by the ABCA. Any such contract or proposed contract shall
be referred to the Board of directors of NXT or shareholders for
approval even if such contract is one that in the ordinary course
of NXT's business would not require approval by the Board or
shareholders. Subject to the provisions of the ABCA, a director
shall not by reason only of his office be accountable to NXT or to
its shareholders for any profit or gain realized from such a
contract or transaction, and such contract or transaction shall not
be void or voidable by reason only of the director's interest
therein, provided that the required declaration and disclosure of
interest is properly made, the contract or transaction is approved
by the directors or shareholders, and it is fair and reasonable to
NXT at the time it was approved and, if required by the ABCA, the
director refrains from voting as a director on the contract or
transaction and absents himself from the director's meeting at
which the contract is authorized or approved by the directors,
except attendance for the purpose of being counted in the
quorum.
51
Rights Attached to Common Shares
The
holders of the common shares are entitled to dividends as and when
declared by the directors of NXT, to one vote per share at meetings
of shareholders of NXT, and upon liquidation, subject to the rights
of the holders of preferred shares, are entitled to share rateably
with the holders of the common shares in all distributions of
assets of NXT.
Rights Attached to Preferred Shares
Preferred
shares may be issued from time to time in one or more series. The
Board of directors of NXT is expressly authorized to provide by
resolution duly adopted prior to issuance, for the creation of each
such series and to fix the designation, rights, privileges,
restrictions and conditions attached to the shares of each such
series, including the rate or amount of dividends or the method of
calculating dividends, the dates of payment of dividends, the
redemption, purchase and/or conversion prices and terms and
conditions of redemption, purchase and/or conversion, and any
sinking fund or other provisions.
The
preferred shares of each series shall, with respect to the payment
of dividends and the distribution of assets or return of capital in
the event of liquidation, dissolution or winding-up of NXT, whether
voluntary or involuntary, or any other return of capital or
distribution of the assets of NXT among its shareholders for the
purpose of winding up its affairs, rank on a parity with the
preferred shares of every other series and be entitled to
preference over the common shares and over any other shares of NXT,
if any, ranking junior to the preferred shares. The preferred
shares of any series may also be given other preferences, not
inconsistent with the articles of continuance of NXT (the
"Articles"), over the common shares and any other shares of NXT
ranking junior to the preferred shares of a series as may be fixed
by the Board of directors of NXT.
If any
cumulative dividends or amounts payable on the return of capital in
respect of a series of preferred shares are not paid in full, all
series of preferred shares shall participate rateably in respect of
accumulated dividends and return of capital.
Unless
the Board of directors of NXT otherwise determine in the articles
of amendment designating a series of preferred shares, the holder
of each share of a series of preferred shares shall not, as such,
be entitled to receive notice of or vote at any meeting of
shareholders, except as otherwise specifically provided in the
ABCA.
Alteration of the Rights of Shareholders
Under
the ABCA, any substantive change to the Articles (including, but
not limited to, change of any maximum number of shares that NXT is
authorized to issue, creation of new classes of shares, add, change
or remove any rights, privileges, restrictions and conditions in
respect of all or any of its shares, whether issued or unissued,
change the shares of any class or series, whether issued or
unissued, into a different number of shares of the same class or
series or into the same or a different number of shares of other
classes or series) or other fundamental changes to the capital
structure of NXT, including a proposed amalgamation or continuance
of NXT out of the jurisdiction, requires shareholder approval by
not less than 2/3 of the votes cast by shareholders voting in
person or by proxy at a shareholders' meeting called for that
purpose. In certain prescribed circumstances, holders of shares of
a class or of a series are entitled to vote separately as a class
or series on a proposal to amend the Articles whether or not shares
of a class or series otherwise carry the right to vote. The holders
of a series of shares of a class are entitled to vote separately as
a series only if the series is affected by an amendment in a manner
different from other shares of the same class.
Meetings of Shareholders
NXT's
By-Laws provide that the Board of directors shall call an annual
meeting of shareholders to be held not later than fifteen months
after holding the last preceding annual meeting. NXT's
By-Laws provide that the Board of directors may at any time call a
special meeting of shareholders. Only the registered holders of
shares are entitled to receive notice of and vote at annual and
special meetings of shareholders, except to the extent
that:
(a)
if a record date is
fixed, the person transfers ownership of any of the person's
shares after the record date; or
(b)
if no record date
is fixed, the person transfers ownership of any of the
person's shares after the date on which the list of
shareholders is prepared; and
(c)
the transferee of
those shares;
●
produces properly
endorsed share certificates; or
●
otherwise
establishes ownership of the shares; and
●
demands, not later
than ten (10) days before the meeting, that the transferee's
name be included in the list before the meeting; and
●
in which case the
transferee is entitled to vote the shares.
52
The
ABCA also permits the holders of not less than 5% of the issued
voting securities of NXT to give notice to the Board of directors
requiring them to call and hold a meeting of NXT.
The
only persons entitled to be present at a meeting of shareholders
are:
(a)
the shareholders
entitled to vote at the meeting;
(b)
the Board of
directors of NXT;
(c)
the external
auditor of NXT; and
(d)
any others who,
although not entitled or required under the provisions of the ABCA,
any unanimous shareholder agreement, or the Articles or the
By-Laws, are allowed to be present at the meeting.
Any
other person may be admitted only on the invitation of the
Chairperson of the meeting or with the consent of the
meeting.
There
are no restrictions in NXT's Articles or By-Laws as to the
number of shares that may be held by non-residents other than
restrictions set out in the
Investment Canada Act
(the
"ICA") (Canada), as further described under Item 10.D
– "Exchange Controls" below.
Change of Control
There
are no specific provisions in the Articles or By-Laws of NXT that
have the effect of delaying, deferring or preventing a change of
control of NXT and that would operate only with respect to a
merger, acquisition or corporate restructuring involving NXT (or
any of its subsidiaries). Notwithstanding this, the Board of
directors, under the general powers conferred to it under
NXT's By-Laws, have the authority to approve and invoke a
shareholders rights plan that will protect shareholders from
unfair, abusive or coercive take-over strategies, including the
acquisition or control of NXT by a bidder in a transaction or
series of transactions that does not treat all shareholders equally
or fairly or that does not afford all shareholders an equal
opportunity to share in any premium paid upon an acquisition of
control. NXT has not adopted such a plan.
Shareholder Ownership Disclosure
There
are no provisions in NXT's By-Laws regarding public
disclosure of individual shareholdings.
C.
Material
contracts.
Each
material contract, other than contracts entered into in the
ordinary course of business, to which the Company has been a party,
for the two years immediately preceding publication of this annual
report, is summarized elsewhere herein. Please see Item 4. B for
description of the AGV Co-operative Agreement, the AGV Notes
Receivable, the Targeted Issuer Bid, and the Nigerian
SFD
®
survey with PE Energy. Also see Item 3. D for a description of the
Sales Leaseback contract.
D.
Exchange
controls.
There
are no governmental laws, decrees or regulations in Canada relating
to restrictions on the export or import of capital, or affecting
the remittance of interest, dividends or other payments to
non-residents. Dividends paid to U.S. residents, however, are
subject to a 15% withholding tax or a 5% withholding tax for
dividends if the shareholder is a corporation owning at least 10%
of the outstanding voting shares of NXT pursuant to Article X of
the reciprocal tax treaty between Canada and the U.S.
53
Except
as provided in the ICA, which has provisions that restrict the
holding of voting shares by non-Canadians, there are no limitations
specific to the rights of non-Canadians to hold or vote the common
shares under the laws of Canada or the Province of Alberta, or in
the charter documents of NXT or its subsidiaries.
Management
of NXT believes that the following summary fairly describes those
provisions of the ICA pertinent to an investment in NXT by a person
who is not a Canadian resident (a
"non-Canadian").
The ICA
requires a non-Canadian making an investment which would result in
the acquisition of control of a Canadian business (i.e. the gross
value of the assets of which exceed a certain monetary threshold)
to identify, notify, or file an application for review with the
Investment Review Division of Industry Canada
("IRD").
The
notification procedure involves a brief statement of information
about the investment on a prescribed form which is required to be
filed with the IRD by the investor at any time up to 30 days
following implementation of the investment. It is intended that
investments requiring only notification will proceed without
government intervention unless the investment is in a specific type
of business activity related to Canada's cultural heritage
and national identity.
If an
investment is reviewable under the ICA, an application for review
in the form prescribed is normally required to be filed with the
IRD prior to the investment taking place and the investment may not
be implemented until the review has been completed and the Minister
of Industry Canada (the "Minister") (the Minister
responsible for Investment Canada) is satisfied that the investment
is likely to be of net benefit to Canada. The Minister has up to 75
days to make this determination. If the Minister is not satisfied
that the investment is likely to be of net benefit to Canada, the
non-Canadian must not implement the investment or, if the
investment has been implemented, may be required to divest himself
of control of the business that is the subject of the
investment.
The
following investments by non-Canadians are subject to notification
under the ICA:
1.
An investment to
establish a new Canadian business; and
2.
An investment to
acquire control of a Canadian business that is not reviewable
pursuant to the Act.
The
following investments by a non-Canadian are subject to review under
the ICA:
1.
An investment is
reviewable if there is an acquisition of a Canadian business and
the asset value of the Canadian business being acquired equals or
exceeds the following thresholds:
(a)
For non-World Trade
Organization ("WTO") investors, the threshold is $5
million for a direct acquisition and $50 million for an indirect
acquisition; the $5 million threshold will apply however for an
indirect acquisition if the asset value of the Canadian business
being acquired exceeds 50% of the asset value of the global
transaction;
(b)
Except as specified
in paragraph (c) below, a threshold is calculated annually for
reviewable direct acquisitions by or from WTO investors. The
threshold for 2012 was $330 million. Pursuant to Canada's
international commitments, indirect acquisitions by or from WTO
investors are not reviewable;
(c)
The limits set out
in paragraph (a) apply to all investors for acquisitions of a
Canadian business that:
(i)
engages in the
production of uranium and owns an interest in a producing uranium
property in Canada;
(ii)
provides any
financial service;
(iii)
provides any
transportation services; or
(iv)
is a cultural
business.
Notwithstanding
the above, any investment which is usually only notifiable,
including the establishment of a new Canadian business, and which
falls within a specific business activity, including the
publication and distribution of books, magazines, newspapers, film
or video recordings, audio or video music recordings, or music in
print or machine-readable form may be reviewed if an
Order-in-Council directing a review is made and a notice is sent to
the investor within 21 days following the receipt of a certified
complete notification.
54
Generally
speaking, an acquisition is direct if it involves the acquisition
of control of the Canadian business or of its direct or indirect
Canadian parent and an acquisition is indirect if it involves the
acquisition of control of a non-Canadian direct or indirect parent
of an entity carrying on the Canadian business. No change of voting
control will be deemed to have occurred if less than one-third of
the voting control of a Canadian corporation is acquired by an
investor.
A WTO
investor, as defined in the ICA, includes an individual who is a
national of a member country of the WTO or who has the right of
permanent residence in relation to that WTO member, a government or
government agency of a WTO investor-controlled corporation, a
limited partnership, trust or joint venture that is neither
WTO-investor controlled or Canadian controlled of which two-thirds
of its Board of directors, general partners or trustees, as the
case may be, are any combination of Canadians and WTO
investors.
The ICA
exempts certain transactions from the notification and review
provisions of ICA, including, among others, (a) an acquisition of
voting shares if the acquisition were made in the ordinary course
of that person's business as a trader or dealer in
securities; (b) an acquisition of control of the Company in
connection with the realization of a security interest granted for
a loan or other financial assistance and not for any purpose
related to the provisions of the ICA; (c) the acquisition of voting
interests by any person in the ordinary course of a business
carried on by that person that consists of providing, in Canada,
venture capital on terms and conditions not inconsistent with such
terms and conditions as may be fixed by the Minister; and (d)
acquisition of control of the Company by reason of an amalgamation,
merger, consolidation or corporate reorganization, following which
the ultimate direct or indirect control in fact of the Company,
through the ownership of voting interests, remains
unchanged.
E.
Taxation.
Certain United States Federal Income Tax
Considerations
The
following is a general summary of certain material U.S. federal
income tax considerations applicable to a U.S. Holder (as defined
below) arising from and relating to the acquisition, ownership and
disposition of common shares of the Company.
This
summary is for general information purposes only and does not
purport to be a complete analysis or listing of all potential U.S.
federal income tax considerations that may apply to a U.S. Holder
arising from and relating to the acquisition, ownership and
disposition of common shares. In addition, this summary does not
take into account the individual facts and circumstances of any
particular U.S. Holder that may affect the U.S. federal income tax
consequences to such U.S. Holder, including, without limitation,
specific tax consequences to a U.S. Holder under an applicable
income tax treaty. Accordingly, this summary is not intended to be,
and should not be construed as, legal or U.S. federal income tax
advice with respect to any U.S. Holder. This summary does not
address the U.S. federal net investment income, U.S. federal
alternative minimum, U.S. federal estate and gift, U.S. state and
local, and non-U.S. tax consequences to U.S. Holders of the
acquisition, ownership and disposition of common shares. In
addition, except as specifically set forth below, this summary does
not discuss applicable tax reporting requirements. Each prospective
U.S. Holder should consult its own tax advisors regarding the U.S.
federal, U.S. federal net investment income, U.S. federal
alternative minimum, U.S. federal estate and gift, U.S. state and
local, and non-U.S. tax consequences relating to the acquisition,
ownership and disposition of common shares.
No
legal opinion from U.S. legal counsel or ruling from the Internal
Revenue Service (the "IRS") has been requested, or will
be obtained, regarding the U.S. federal income tax consequences of
the acquisition, ownership, and disposition of common shares. This
summary is not binding on the IRS and the IRS is not precluded from
taking a position that is different from, and contrary to, the
positions taken in this summary. In addition, because the
authorities on which this summary is based are subject to various
interpretations, the IRS and the U.S. courts could disagree with
one or more of the conclusions described in this
summary.
55
Scope of this Summary
Authorities
This
summary is based on the Internal Revenue Code of 1986, as amended
(the "Code"), Treasury Regulations (whether final,
temporary, or proposed), published rulings of the IRS, published
administrative positions of the IRS, the Convention Between Canada
and the United States of America with Respect to Taxes on Income
and Capital, signed September 26, 1980, as amended (the
"Canada-U.S. Tax Convention"), and U.S. court decisions
that are applicable, and, in each case, as in effect and available,
as of the date of this document. Any of the authorities on which
this summary is based could be changed in a material and adverse
manner at any time, and any such change could be applied
retroactively. This summary does not discuss the potential effects,
whether adverse or beneficial, of any proposed
legislation.
U.S. Holders
For
purposes of this summary, the term "U.S. Holder" means a beneficial
owner of common shares that is for U.S. federal income tax
purposes:
●
an individual who
is a citizen or resident of the United States;
●
a corporation (or
other entity treated as a corporation for U.S. federal income tax
purposes) organized under the laws of the United States, any state
thereof or the District of Columbia;
●
an estate whose
income is subject to U.S. federal income taxation regardless of its
source; or
●
a trust that (1) is
subject to the primary supervision of a court within the U.S. and
the control of one or more U.S. persons for all substantial
decisions or (2) has a valid election in effect under applicable
Treasury Regulations to be treated as a U.S. person.
U.S. Holders Subject to Special U.S. Federal Income Tax Rules Not
Addressed
This
summary does not address the U.S. federal income tax considerations
applicable to U.S. Holders that are subject to special provisions
under the Code, including, but not limited to, U.S. Holders that:
(a) are tax-exempt organizations, qualified retirement plans,
individual retirement accounts, or other tax-deferred accounts; (b)
are financial institutions, underwriters, insurance companies, real
estate investment trusts, or regulated investment companies; (c)
are broker-dealers, dealers, or traders in securities or currencies
that elect to apply a mark-to-market accounting method; (d) have a
"functional currency" other than the U.S. dollar; (e)
own common shares as part of a straddle, hedging transaction,
conversion transaction, constructive sale, or other integrated
transaction; (f) acquire common shares in connection with the
exercise of employee stock options or otherwise as compensation for
services; (g) hold common shares other than as a capital asset
within the meaning of Section 1221 of the Code (generally, property
held for investment purposes); (h) are subject to special
accounting rules; or (i) own, have owned or will own (directly,
indirectly, or by attribution) 10% or more of the total combined
voting power or value of the outstanding shares of the Company.
This summary also does not address the U.S. federal income tax
considerations applicable to U.S. Holders who are: (a) U.S.
expatriates or former long-term residents of the U.S.; (b) persons
that have been, are, or will be a resident or deemed to be a
resident in Canada for purposes of the Income Tax Act (Canada) (the
"Tax Act"); (c) persons that use or hold, will use or
hold, or that are or will be deemed to use or hold common shares in
connection with carrying on a business in Canada; (d) persons whose
common shares constitute "taxable Canadian property"
under the Tax Act; or (e) persons that have a permanent
establishment in Canada for the purposes of the Canada-U.S. Tax
Convention. U.S. Holders that are subject to special provisions
under the Code, including, but not limited to, U.S. Holders
described immediately above, should consult their own tax advisors
regarding the U.S. federal, U.S. federal net investment income,
U.S. federal alternative minimum, U.S. federal estate and gift,
U.S. state and local, and non-U.S. tax consequences relating to the
acquisition, ownership and disposition of common
shares.
If an
entity or arrangement that is classified as a partnership (or other
"pass-through" entity) for U.S. federal income tax
purposes holds common shares, the U.S. federal income tax
consequences to such entity or arrangement and the partners (or
other owners or participants) of such entity or arrangement
generally will depend on the activities of the entity or
arrangement and the status of such partners (or owners or
participants). This summary does not address the tax consequences
to any such partner (or owner or participants). Partners (or other
owners or participants) of entities or arrangements that are
classified as partnerships or as "pass-through"
entities for U.S. federal income tax purposes should consult their
own tax advisors regarding the U.S. federal income tax consequences
arising from and relating to the acquisition, ownership and
disposition of common shares.
56
Passive Foreign Investment Company Rules
If the Company were to constitute a PFIC for any year during a U.S.
Holder's holding period, then certain potentially adverse
rules would affect the U.S. federal income tax consequences to a
U.S. Holder resulting from the acquisition, ownership and
disposition of shares. The Company believes that it was not a PFIC
for the tax year ended December 31, 2019. No opinion of legal
counsel or ruling from the IRS concerning the status of the Company
as a PFIC has been obtained or is currently planned to be
requested. However, PFIC classification is fundamentally factual in
nature, generally cannot be determined until the close of the tax
year in question and is determined annually. Additionally, the
analysis depends, in part, on the application of complex U.S.
federal income tax rules, which are subject to differing
interpretations. Consequently, there can be no assurance that the
Company has never been and will not become a PFIC for any tax year
during which U.S. Holders hold shares.
In addition, in any year in which the Company is classified as a
PFIC, a U.S. Holder will be required to file an annual report with
the IRS containing such information as Treasury Regulations and/or
other IRS guidance may require. A failure to satisfy such reporting
requirements may result in an extension of the time period during
which the IRS can assess a tax. U.S. Holders should consult their
own tax advisors regarding the requirements of filing such
information returns under these rules, including the requirement to
file an IRS Form 8621 annually.
The Company generally will be a PFIC under Section 1297 of the Code
if, after the application of certain "look-through"
rules with respect to subsidiaries in which the Company holds at
least 25% of the value of such subsidiary, for a tax year, (a) 75%
or more of the gross income of the Company for such tax year is
passive income (the "income test") or (b) 50% or more
of the value of the Company's assets either produce passive
income or are held for the production of passive income (the
"asset test"), based on the quarterly average of the
fair market value of such assets. "Gross income"
generally includes all sales revenues less the cost of goods sold,
plus income from investments and incidental or outside operations
or sources, and "passive income" generally includes,
for example, dividends, interest, certain rents and royalties,
certain gains from the sale of stock and securities, and certain
gains from commodities transactions. Active business gains arising
from the sale of commodities generally are excluded from passive
income if substantially all of a foreign corporation's
commodities are stock in trade or inventory, depreciable property
used in a trade or business or supplies regularly used or consumed
in the ordinary course of its trade or business, and certain other
requirements are satisfied.
If the Company were a PFIC in any tax year during which a U.S.
Holder held shares, such holder generally would be subject to
special rules with respect to "excess distributions"
made by the Company on the shares and with respect to gain from the
disposition of shares. An "excess distribution"
generally is defined as the excess of distributions with respect to
the shares received by a U.S Holder in any tax year over 125% of
the average annual distributions such U.S. Holder has received from
the Company during the shorter of the three preceding tax years, or
such U.S. Holder's holding period for the shares. Generally,
a U.S. Holder would be required to allocate any excess distribution
or gain from the disposition of the shares ratably over its holding
period for the shares. Such amounts allocated to the year of the
disposition or excess distribution would be taxed as ordinary
income, and amounts allocated to prior tax years would be taxed as
ordinary income at the highest tax rate in effect for each such
year and an interest charge at a rate applicable to underpayments
of tax would apply.
While there are U.S. federal income tax elections that sometimes
can be made to mitigate these adverse tax consequences (including
the "QEF Election" under Section 1295 of the Code and
the "Mark-to-Market Election" under Section 1296 of the
Code), such elections are available in limited circumstances and
must be made in a timely manner.
U.S. Holders should be aware that, for each tax year, if any, that
the Company is a PFIC, the Company can provide no assurances that
it will satisfy the record-keeping requirements of a PFIC, or that
it will make available to U.S. Holders the information such U.S.
Holders require to make a QEF Election with respect to the Company
or any subsidiary that also is classified as a
PFIC.
Certain additional adverse rules may apply with respect to a U.S.
Holder if the Company is a PFIC, regardless of whether the U.S.
Holder makes a QEF Election. These rules include special rules that
apply to the amount of foreign tax credit that a U.S. Holder may
claim on a distribution from a PFIC. Subject to these special
rules, foreign taxes paid with respect to any distribution in
respect of stock in a PFIC are generally eligible for the foreign
tax credit. U.S. Holders should consult their own tax advisors
regarding the potential application of the PFIC rules to the
ownership and disposition of shares, and the availability of
certain U.S. tax elections under the PFIC
rules.
57
General Rules Applicable to the Ownership and Disposition of Common
Shares
The
following discussion describes the general rules applicable to the
ownership and disposition of the common shares but is subject in
its entirety to the special rules described above under the heading
"Passive Foreign Investment Company
Rules."
Distributions on Common Shares
A U.S.
Holder that receives a distribution, including a constructive
distribution, with respect to a common share will be required to
include the amount of such distribution in gross income as a
dividend (without reduction for any Canadian income tax withheld
from such distribution) to the extent of the current and
accumulated "earnings and profits" of the Company, as
computed for U.S. federal income tax purposes. A dividend generally
will be taxed to a U.S. Holder at ordinary income tax rates if the
Company is a PFIC for the tax year of such distribution or the
preceding tax year. To the extent that a distribution exceeds the
current and accumulated "earnings and profits" of the
Company, such distribution will be treated first as a tax-free
return of capital to the extent of a U.S. Holder's tax basis in the
common shares and thereafter as gain from the sale or exchange of
such common shares. (See "Sale or Other Taxable Disposition
of Common Shares" below). However, the Company may not
maintain the calculations of its earnings and profits in accordance
with U.S. federal income tax principles, and each U.S. Holder may
have to assume that any distribution by the Company with respect to
the common shares will constitute ordinary dividend income.
Dividends received on common shares by corporate U.S. Holders
generally will not be eligible for the "dividends received
deduction." Subject to applicable limitations and provided
the Company is eligible for the benefits of the Canada-U.S. Tax
Convention, dividends paid by the Company to non-corporate U.S.
Holders, including individuals, generally will be eligible for the
preferential tax rates applicable to long-term capital gains for
dividends, provided certain holding period and other conditions are
satisfied, including that the Company not be classified as a PFIC
in the tax year of distribution or in the preceding tax year. The
dividend rules are complex, and each U.S. Holder should consult its
own tax advisors regarding the application of such
rules.
Sale or Other Taxable Disposition of Common Shares
Upon
the sale or other taxable disposition of common shares, a U.S.
Holder generally will recognize capital gain or loss in an amount
equal to the difference between the U.S. dollar value of cash
received plus the fair market value of any property received and
such U.S. Holder's tax basis in such common shares sold or
otherwise disposed of. A U.S. Holder's tax basis in common
shares generally will be such holder's U.S. dollar cost for
such common shares. Gain or loss recognized on such sale or other
disposition generally will be long-term capital gain or loss if, at
the time of the sale or other disposition, the common shares have
been held for more than one year.
Preferential
tax rates currently apply to long-term capital gain of a U.S.
Holder that is an individual, estate, or trust. There are currently
no preferential tax rates for long-term capital gain of a U.S.
Holder that is a corporation. Deductions for capital losses are
subject to significant limitations under the Code.
Additional Considerations
Receipt of Foreign Currency
The
amount of any distribution paid to a U.S. Holder in foreign
currency, or on the sale, exchange or other taxable disposition of
common shares, generally will be equal to the U.S. dollar value of
such foreign currency based on the exchange rate applicable on the
date of receipt (regardless of whether such foreign currency is
converted into U.S. dollars at that time). A U.S. Holder will have
a basis in the foreign currency equal to its U.S. dollar value on
the date of receipt. Any U.S. Holder who converts or otherwise
disposes of the foreign currency after the date of receipt may have
a foreign currency exchange gain or loss that would be treated as
ordinary income or loss, and generally will be U.S. source income
or loss for foreign tax credit purposes. Different rules apply to
U.S. Holders who use the accrual method of tax accounting. Each
U.S. Holder should consult its own U.S. tax advisors regarding the
U.S. federal income tax consequences of receiving, owning, and
disposing of foreign currency.
58
Foreign Tax Credit
Subject
to the PFIC rules discussed above, a U.S. Holder that pays (whether
directly or through withholding) Canadian income tax with respect
to dividends paid on the common shares generally will be entitled,
at the election of such U.S. Holder, to receive either a deduction
or a credit for such Canadian income tax. Generally, a credit will
reduce a U.S. Holder's U.S. federal income tax liability on a
dollar-for-dollar basis, whereas a deduction will reduce a U.S.
Holder's income that is subject to U.S. federal income tax.
This election is made on a year-by-year basis and applies to all
foreign taxes paid (whether directly or through withholding) by a
U.S. Holder during a year. The foreign tax credit rules are complex
and involve the application of rules that depend on a U.S.
Holder's particular circumstances. Accordingly, each U.S.
Holder should consult its own U.S. tax advisors regarding the
foreign tax credit rules.
Backup Withholding and Information Reporting
Under
U.S. federal income tax law, certain categories of U.S. Holders
must file information returns with respect to their investment in,
or involvement in, a foreign corporation. For example, U.S. return
disclosure obligations (and related penalties) are imposed on
individuals who are U.S. Holders that hold certain specified
foreign financial assets in excess of certain thresholds. The
definition of specified foreign financial assets includes not only
financial accounts maintained in foreign financial institutions,
but also, unless held in accounts maintained by a financial
institution, any stock or security issued by a non-U.S. person, any
financial instrument or contract held for investment that has an
issuer or counterparty other than a U.S. person and any interest in
a foreign entity. U.S. Holders may be subject to these reporting
requirements unless their common shares are held in an account at
certain financial institutions. Penalties for failure to file
certain of these information returns are substantial. U.S. Holders
should consult with their own tax advisors regarding the
requirements of filing information returns, including the
requirement to file an IRS Form 8938.
Payments
made within the U.S., or by a U.S. payer or U.S. middleman, of
dividends on, and proceeds arising from the sale or other taxable
disposition of, common shares will generally be subject to
information reporting and backup withholding tax, at the rate of
24%, if a U.S. Holder (a) fails to furnish such U.S. Holder's
correct U.S. taxpayer identification number (generally on Form
W-9), (b) furnishes an incorrect U.S. taxpayer identification
number, (c) is notified by the IRS that such U.S. Holder has
previously failed to properly report items subject to backup
withholding tax, or (d) fails to certify, under penalty of perjury,
that such U.S. Holder has furnished its correct U.S. taxpayer
identification number and that the IRS has not notified such U.S.
Holder that it is subject to backup withholding tax. However,
certain exempt persons generally are excluded from these
information reporting and backup withholding rules. Backup
withholding is not an additional tax. Any amounts withheld under
the U.S. backup withholding tax rules will be allowed as a credit
against a U.S. Holder's U.S. federal income tax liability, if
any, or will be refunded, if such U.S. Holder furnishes required
information to the IRS in a timely manner.
The
discussion of reporting requirements set forth above is not
intended to constitute a complete description of all reporting
requirements that may apply to a U.S. Holder. A failure to satisfy
certain reporting requirements may result in an extension of the
time period during which the IRS can assess a tax and, under
certain circumstances, such an extension may apply to assessments
of amounts unrelated to any unsatisfied reporting requirement. Each
U.S. Holder should consult its own tax advisors regarding the
information reporting and backup withholding rules.
THE
ABOVE SUMMARY IS NOT INTENDED TO CONSTITUTE A COMPLETE ANALYSIS OF
ALL TAX CONSIDERATIONS APPLICABLE TO U.S. HOLDERS WITH RESPECT TO
THE ACQUISITION, OWNERSHIP, AND DISPOSITION OF COMMON SHARES. U.S.
HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS AS TO THE TAX
CONSIDERATIONS APPLICABLE TO THEM IN THEIR OWN PARTICULAR
CIRCUMSTANCES
59
F.
Dividends
and paying agents.
Not
applicable.
G.
Statement
by experts.
Not
applicable.
H.
Documents
on display.
We will
furnish our shareholders with annual reports, which will include a
review of operations and annual audited consolidated financial
statements prepared in conformity with U.S. GAAP. We intend,
although we are not obligated to do so, to furnish when requested
by our shareholders quarterly reports by mail with the assistance
of a corporate services provider, which will include unaudited
interim financial information prepared in conformity with U.S. GAAP
for each of the three quarters of each fiscal year following the
end of each such quarter. We may discontinue providing quarterly
reports at any time without prior notice to our shareholders. For
additional information on the Company, please consult our website
at www.nxtenergy.com, or the SEDAR website at
http://www.sedar.com.
Our
reports and other information, including this annual report and the
exhibits hereto, as filed with the SEC in accordance with the
Exchange Act, may be inspected and copied at the public reference
facilities maintained by the SEC at 100 F Street, Washington, D.C.
20549. In addition, copies of such reports and other information
filed with the SEC can be obtained from www.sec.gov.
ITEM 11.0
QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As at
December 31, 2019 and to date in 2020, we do not have any interest
bearing debt facilities or any forward / futures hedging contracts
in place to manage risks related to foreign currency or interest
rate fluctuations.
Currency Fluctuations
We
currently hold our cash in both Canadian and United States of
America currency, as we generally bill revenues in U.S. currency,
and periodically hold certain short-term monetary assets and
liabilities in other foreign currencies. Any transaction in a
currency other than the Canadian dollar exposes NXT to the impact
of exchange rate fluctuations between the Canadian and the foreign
currencies. We do not currently engage in hedging activities to
mitigate the effects of foreign currency fluctuation, and are
reviewing opportunities to do so.
As at
December 31, 2019, we held U.S dollar cash and short term
investments totaling US$2,436,411. Accordingly, a hypothetical 10%
change in the value of one U.S. dollar expressed in Canadian
dollars as at December 31, 2019 would have had a $243,641 effect on
the unrealized foreign exchange gain or loss for the
year.
Interest Fluctuations
As at
December 31, 2019, we held a total of $6,639,756 in cash, cash
equivalents and short term investments. If all this cash was held
in an interest bearing account for a full year, an actual 1% change
in interest rates during the year ended December 31, 2019 would
have resulted in approximately a $66,398 change in interest income
for the year.
We caution that the factors referred to above and those referred to
as part of particular forward-looking statements may not be
exhaustive and that new risk factors emerge from time to time in
our rapidly changing business environment.
ITEM 12.
DESCRIPTION
OF SECURITIES OTHER THAN EQUITY SECURITIES
Not
applicable.
60
PART II
ITEM 13.
DEFAULTS,
DIVIDEND ARREARAGES AND DELINQUENCIES
There
have not been any defaults, dividend arrears or
delinquencies.
ITEM 14.
MATERIAL
MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF
PROCEEDS
There
have been no material modifications to the rights of security
holders except as outlined in Item 4.B "Summary information
on dependence on patents, licenses and contracts" within this
Form 20-F.
ITEM 15.
CONTROLS
AND PROCEDURES
Disclosure Controls and Procedures
We
maintain a set of disclosure controls and procedures
("DCP") 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 SEC rules and forms.
Disclosure controls and procedures include controls and procedures
designed to ensure that information required to be disclosed in our
reports is accumulated and communicated to management, to allow
timely decisions regarding required disclosure.
Management's Annual Report on Internal Control Over Financial
Reporting
The
Company's Chief Executive Officer ("CEO") and Chief
Financial Officer ("CFO", together the "Responsible
Officers") are responsible for establishing and maintaining DCP, or
causing them to be designed under their supervision, for NXT to
provide reasonable assurance that material information relating to
the Company is made known to the Responsible Officers by others
within the organization, particularly during the period in which
the Company's quarterly and year-end financial statements, Form
20-F and Canadian MD&A are being prepared.
As of
December 31, 2019, we carried out an evaluation, under the
supervision and with the participation of our management, including
our Responsible Officers, of the effectiveness of the design and
operation of the Company's DCP as defined under the rules
adopted by the Canadian securities regulatory authorities and in
Rule 13a-15(e) of the Exchange Act. The evaluation concluded that
there are material weaknesses in the Company's ICFR that have
a direct impact on the Company's DCP as discussed in more
detail below.
Our
management, under the supervision of the Responsible Officers, is
also responsible for establishing and maintaining adequate internal
control over financial reporting ("ICFR") as defined in
Rule 13a-15(f) of the Exchange Act. Our internal control system was
designed to provide reasonable assurance regarding the reliability
of financial reporting and the preparation and fair presentation of
our consolidated financial statements for external purposes in
accordance with generally accepted accounting principles. Our
Responsible Officers assessed the effectiveness of our ICFR as of
December 31, 2019. In making this assessment, they used the
criteria established in
Internal
Control – Integrated Framework 2013, issued by the Committee
of Sponsoring Organizations of the Treadway Commission
("COSO").
Our
ICFR were not required to be independently audited. Accordingly, no
independent audit was performed over the effectiveness of internal
controls as at December 31, 2019 and this annual report does not
include an attestation report of the Company's registered
public accounting firm regarding ICFR. Management's report
was not subject to attestation by the Company's registered
public accounting firm pursuant to rules of the SEC that permit the
Company to provide only management's report in this annual
report.
61
During
this process, we identified the following material weaknesses in
the Company's ICFR that have a direct impact on the
Company's DCP:
●
due to the limited
number of staff, it is not feasible to achieve adequate segregation
of incompatible duties – NXT mitigates this deficiency by
adding management and Audit Committee review procedures over the
areas where inadequate segregation of duties are of the greatest
concern; and
●
NXT does not have a
sufficient level of staff with specialized expertise to adequately
conduct separate preparation and a subsequent independent review of
certain complex or highly judgmental accounting issues – NXT
mitigates this deficiency by preparing financial statements with
their best judgments and estimates of the complex accounting
matters and relies on reviews by management, external consultants
and the Audit Committee for quality assurance.
From
time to time to reduce these risks and to supplement a small
corporate finance function, the Company engages various outside
experts and advisors to assist with various accounting, controls
and tax issues in the normal course.
Notwithstanding
NXT's efforts to mitigate the risks associated with the
above-mentioned deficiencies, the CEO and CFO concluded that the
Company's ICFR are not effective and as a result its DCP are not
effective as at December 31, 2019. NXT reached this conclusion
based upon their assessment that there is more than a remote
likelihood that its ICFR will not prevent or detect material
misstatements if they should exist in our consolidated financial
statements. NXT has therefore further taken on a process of
continuous improvement in financial reporting and disclosure
policies and responsibilities from which we continue to expect to
see benefits over the course of 2020.
It
should be noted that a control system, including the
Company's DCP and ICFR procedures, no matter how well
conceived, can provide only reasonable, but not absolute assurance
that the objectives of the control system will be met and it should
not be expected that the DCP and ICFR will prevent all errors or
fraud.
Changes in Internal Controls
The small size of the Company's finance team has resulted in
control deficiencies in maintaining DCPs and ICFR that in turn have
led to a recurrence of previously identified deficient
disclosure.  Given the small size of the Companies
finance team and in order to improve ICFR moving forward,
management has established a practice of increased engagement of
the Company's Disclosure Committee and Audit Committee in reviewing
the public disclosure and has increased engagement of external
consultants and legal counsel as well.
NXT's
efforts to mitigate the risks associated with the above-mentioned
deficiencies has resulted in continuous improvements in its DCPs.
The Responsible Officers concluded that, as at December 31, 2019,
the Company's ICFR have improved, but are still not effective and
as a result its DCPs are still not sufficiently effective. NXT
reached this conclusion based upon its assessment that there is a
more than remote likelihood that its ICFR will not prevent or
detect material misstatements if they should exist in the Company's
consolidated financial statements.
NXT continues a process
of
continuous
improvement in financial reporting and disclosure policies and
responsibilities from which the Company
expects to see
continued benefits in 2020. The Responsible Officers continue to
take certain actions to remediate these material weaknesses
including: (i) the implementation of new controls with regards to
the review procedures surrounding its disclosure; and (ii)
engagement of third-party specialists. In addition, the Company has
appointed its Corporate Controller as the new Chief Financial
Officer as of August 1, 2019. The Chief Financial Officer engages
subject matter consultants as the need arises.
The new
controls over financial reporting and disclosure policies and
responsibilities have been performed over seven quarterly periods.
Material weaknesses cannot be considered remediated until the
remedial controls operate for a sufficient period of time and
Responsible Officers have concluded through testing that these
controls are operating effectively.
It
should be noted that a control system, including the Company's DCPs
and ICFR procedures, no matter how well conceived, can provide only
reasonable, but not absolute assurance that the objectives of the
control system will be met, and it should not be expected that the
DCPs and ICFR will prevent all errors or
fraud.
There were no other changes in our internal control over financial
reporting that materially affected, or are reasonably likely to
materially affect, our internal control over financial reporting
during the period ended December 31, 2019.
62
ITEM
16A.
AUDIT
COMMITTEE FINANCIAL EXPERT
Our
Board of Directors has determined that we have at least one audit
committee "financial expert" (as defined under Item
16.A of Form 20-F) serving on our Audit Committee. The Audit
Committee consists of Messrs. Wilcox (Chair), Ingriselli, Selby and
Tilson. Each member of the NXT Audit Committee has relevant
experience in understanding and evaluating financial information,
generally accepted accounting principles, control systems and audit
committee functions. Each member of NXT's Audit Committee is
considered a financial expert, and Messrs. Wilcox, Ingriselli, and
Tilson are "independent" directors, as that term is
defined under the listing standards of NASDAQ.
ITEM
16B.
CODE
OF ETHICS
NXT has
in place a Code of Conduct & Business Ethics (the "Code
of Conduct") that applies to all of our directors, officers,
employees, and consultants. This Code of Conduct is incorporated in
our Employee Handbook, is an integral part of our employee
contracts and our Employee Handbook and contains Company policies
on Business Ethics, Employee Practices and Conflicts of
Interest.
During
2019, the Company did not significantly amend its Code of Conduct
or grant any waiver, including any implicit waiver, from any
provision of the Code of Conduct to any of its directors, officers
or employees. Copies of NXT's Code of Conduct are available
without charge to any person upon request from NXT's Chief
Financial Officer at nxt_info@nxtenergy.com or at NXT's
headquarters at Suite 302, 3320 – 17
th
Avenue SW, Calgary
Alberta, Canada, T3E 0B4, and on the Company website,
www.nxtenergy.com.
ITEM
16C.
PRINCIPAL
ACCOUNTANT FEES AND SERVICES
The
following table sets forth the aggregate audit fees, audit-related
fees, tax fees of our principal accountants and all other fees
billed for products and services provided by our principal
accountants for each of the fiscal years ended December 31, 2019
and 2018.
2019
2018
Audit
fees
$
136,470
$
126,810
Tax
fees
18,340
5,510
Total
fees
154,810
132,320
Audit Committee's Pre-approval Policies and
Procedures
Our
Audit Committee nominates and engages our independent auditors to
audit our financial statements. Our Audit Committee also requires
management to obtain the Audit Committee's approval on a
case-by-case basis before engaging our independent auditors to
provide any audit or permitted non-audit services to the Company or
any of our subsidiaries. All fees shown have been pre-approved by
the Audit Committee.
ITEM
16D.
EXEMPTIONS
FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
Not
applicable.
ITEM
16E.
PURCHASES
OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED
PURCHASERS
Period
Total Number of
Shares Purchased
Average Price
Paid per Shares
Total Number of
Shares Purchased as Part of Publicly Announced Plans or
Programs
Maximum Number
(or Approximate Dollar Value) of Shares that May Yet Be Purchased
Under the Plans or Programs
November 15, 2019
– December 9, 2019
4,166,667
$
.30
4,166,667
0
63
Targeted Issuer Bid
Between
November 15, 2019 (the "TIB Commencement Date") and December 9,
2019 (the "TIB Completion Date"), NXT purchased for cancellation an
aggregate of 4,166,667 Common Shares, representing approximately
6.08% of the 68,573,558 Common Shares outstanding as at the TIB
Commencement Date. The purchase price of $0.30 per Common Share
represented a discount of approximately 22.9% relative to the
market price of $0.389 per Common Share as at the TIB Commencement
Date. Gross proceeds received by AGV totaled approximately
$1,250,000.00, representing approximately 6.1% of the Company's
market capitalization of approximately $26,675,114.062 as at the
TIB Commencement Date.
The
terms of the Targeted Issuer Bid also provided that the 3,421,648
Warrants expired effective October 31, 2019, and that certain
deadlines under the Co-operation Agreement be extended. AGV's
registered ownership in the Company was reduced from 10,264,946
Common Shares and 3,421,648 Warrants, representing, on a fully
diluted basis, approximately 20.0% of the 68,573,558 issued and
outstanding Common Shares as at the TIB Commencement Date, to
6,098,279 Common Shares and nil Warrants, representing
approximately 9.5% of the 64,406,891 issued and outstanding Common
Shares as at the TIB Completion Date.
By
strategically acquiring its Common Shares for cancellation in a
private transaction at a discount to the then current market price,
the Company improved the equity position of its other shareholders
and provided AGV with additional funds necessary to continue
advancing the common objectives of the parties under the
Co-operation Agreement, while also avoiding a substantial decrease
in the market price and liquidity of the Common Shares reasonably
expected if AGV were to sell a substantial portion of its equity
position into the open market.
The
Targeted Issuer Bid was exempt from the formal valuation and
disinterested shareholder approval requirements typically
applicable to related party transactions under applicable
securities laws as neither the fair market value of the Common
Shares (approximately $1,620,833.46) nor the consideration received
by AGV for the Common Shares (approximately $1,250,000.00) exceeded
25% of the Company's market capitalization at the TIB Commencement
Date (approximately $26,675,114.06).
ITEM
16F.
CHANGE
IN REGISTRANT'S CERTIFYING ACCOUNTANT
Not
applicable.
ITEM 16G.
CORPORATE
GOVERNANCE
Not
applicable.
ITEM 16H.
MINE
SAFETY DISCLOSURE
Not
applicable.
PART III
ITEM 17.
FINANCIAL
STATEMENTS
The
Company's consolidated financial statements and related notes
are prepared in accordance with U.S. generally accepted accounting
principles and included in Item 18 to this annual
report.
ITEM 18.
FINANCIAL
STATEMENTS
The
Company's consolidated financial statements and related notes
have been prepared in accordance with U.S. generally accepted
accounting principles.
64
ITEM 19.
EXHIBITS
EXHIBIT INDEX
Exhibit
No.
Description
1.1
Articles of
Incorporation of Auric Mining Corporation as filed with the Nevada
Secretary of State on September 27, 1994 (incorporated by reference
to Exhibit 3.1 to the Registration Statement on Form 10 filed on
June 29, 1998)
1.2
Amendment to
Articles of Incorporation of Auric Mining Corporation as filed with
the Nevada Secretary of State on February 23, 1996 (incorporated by
reference to Exhibit 3.1 to the Registration Statement on Form 10
filed on June 29, 1998)
1.3
Certificate of
Amendment to Articles of Incorporation of Pinnacle Oil
International, Inc. as filed with the Nevada Secretary of
State on April 1, 1998 (incorporated by reference to Exhibit 3.3 to
the Registration Statement on Form 10 filed on June 29,
1998)
1.4
Certificate of
Amendment to Articles of Incorporation of Pinnacle Oil
International, Inc. as filed with the Nevada Secretary of
State on June 13, 2000 (incorporated by reference to Exhibit 3.4 to
our Amendment No. 1 to the Annual Report on Form 10-K for the year
ended December 31, 1999 as filed on July 28, 2000)
1.5
Articles of
Amendment of Energy Exploration Technologies Inc. as filed with the
province of Alberta, Canada on September 22, 2008 (incorporated by
reference to Exhibit 1.8 to our Annual Report on Form 20-F for the
year ended December 31, 2008 as filed on June 29,
2009)
1.6
Amendment to the
Articles of NXT Energy Solutions Inc. (incorporated by reference to
Item V of Exhibit 99.1 to Form 6-K as filed on September 20,
2013)
1.7
NXT
Energy Solutions Inc. By-Law No. 1 (incorporated by reference to
Schedule "D" to Exhibit 99.2 to Form 6-K as filed on
September 20, 2013)
2.1
Description of
Securities
4.1
Form of
Indemnification Agreement between NXT Energy Solutions Inc. and
each of its Directors and Executive Officers (incorporated by
reference to Exhibit 4.6 to our Annual Report on Form 20-F for the
year ended December 31, 2013 as filed on April 30,
2014)
4.2
SFD
®
Technology
Ownership Agreement dated December 31, 2006 (incorporated by
reference to Exhibit 99.4 to Form 6-K as filed on January 12,
2007)
4.3
Technology Transfer
Agreement dated December 31, 2006 (incorporated by reference to
Exhibit 99.6 to Form 6-K as filed on January 12,
2007)
8.1
List of
Subsidiaries (incorporated by reference to Exhibit 8.1 to our
Annual Report on Form 20-F for the year ended December 31, 2013 as
filed on April 30, 2014)
11.1
Code of
Conduct and Business Ethics (incorporated by reference to Exhibit
11.1 to our Annual Report on Form 20-F for the year ended December
31, 2013 as filed on April 30, 2014)
12.1
Rule
13a-14(a)/15d-14(a) Certification of Chief Executive Officer and
President
12.2
Rule
13a-14(a)/15d-14(a) Certification of VP Finance and Chief Financial
Officer
13.1
Section 1350
Certification of Chief Executive Officer and
President
13.2
Section 1350
Certification of VP Finance and Chief Financial
Officer
15.1
Consolidated
Financial Statements and Audit report of KPMG LLP for the year
ended December 31, 2019
15.2
Consent of KPMG
LLP
15.3
Management's
Discussion and Analysis for the year ended December 31,
2019
65
SIGNATURES
The
registrant hereby certifies that it meets all of the requirements
for filing on Form 20-F and that it has duly caused and authorized
the undersigned to sign this annual report on its
behalf.
NXT
Energy Solutions Inc.
By: /s/
George Liszicasz
George
Liszicasz
Director,
Chairman, Chief Executive Officer and President
Dated:
May 5, 2020
66