UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 20-F

(Mark One)

Commission file number 000-24027

Alberta, Canada

(Jurisdiction of incorporation or organization)

Suite 302, 3320 - 17th 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 - 17th 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:

118,596,228 common shares outstanding as of December 31, 2025 (119,487,040 common shares outstanding as of April 30, 2026).

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes ☐   No ☒

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 ☒

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 ☒   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  ☒   No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company.  See definition of “accelerated filer”, “large accelerated filer”, and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

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. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing.

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 ☒

TABLE OF CONTENTS

 20-F for the year ended December 31, 2025

FORWARD-LOOKING STATEMENTS

NXT Energy Solutions Inc. is a Calgary-based technology company whose proprietary airborne SFD^® survey system, applied in numerous basins around the world, uses the principles of quantum mechanics to infer stress anomalies of exploration interest. The method can be used both onshore and offshore to remotely identify areas conducive to fluid entrapment in order to recommend areas with commercial hydrocarbon and/or geothermal potential. The SFD^® survey system enables our clients to focus their exploration decisions concerning land commitments, data acquisition expenditures and prospect prioritization on areas with the greatest potential. SFD^® is environmentally friendly and unaffected by ground security issues or difficult terrain and is the registered trademark of NXT Energy Solutions Inc. NXT Energy Solutions Inc. provides its clients with an effective and reliable method to reduce time, costs, and risks related to exploration.

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. This information also relates 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”, “can”, “continue”, “could”, “would”, “should”, “estimate”, “expect”, “intend”, “seek”, “may”, “plan”, “remain”, “shall”, “will”, “target”, “foresee” 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.

 20-F for the year ended December 31, 2025

Such forward-looking information is based on several assumptions which may prove to be incorrect.  Assumptions have been made with respect to the following matters, in addition to any other assumptions identified in this document:

Although NXT believes that the expectations reflected in such forward-looking information are reasonable, undue reliance should not be placed on them as NXT can give no assurance that such expectations will prove to be correct. Forward-looking information is based on expectations, estimates, and projections that involve a number of risks and uncertainties, which could cause actual results to differ materially from those anticipated by NXT and are described in the forward-looking information. Material risks and uncertainties include, but are not limited to:

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.

 20-F for the year ended December 31, 2025

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.

ITEM 3. KEY INFORMATION

A. [Reserved].

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.

Our ability to continue operating.

NXT continues to make progress toward realizing widespread commercialization of its SFD^® technology. The Company’s ability to generate cash flow from operations will depend on its ability to service its existing clients and develop new clients for its SFD^® services. Management recognizes that the commercialization phase can last for several years, and that it can have significant economic dependence on a small number of clients, which can have a material effect on the Company’s operating results and financial position. During 2025 the Company realized positive operating cash flow.

The events described in the following paragraphs highlight that there continues to be material uncertainties that cast substantial doubt about NXT’s ability to continue as a going concern within one year after the date that the Consolidated Financial Statements have been issued. The Company’s current cash position is not expected to be sufficient to meet the Company’s obligations and planned operations for a year beyond the date that the Consolidated Financial Statements have been issued.

During 2024 the Company completed an SFD^® survey and received deposits on three other SFD^® surveys planned to be executed in 2025 (the “2025 SFD^® Surveys”). As of the date of this 20-F, the Company has finished one of those SFD^® surveys and the interpretation phase of two of the 2025 SFD^® Surveys. In addition, during 2023 and 2024 the Company completed convertible debenture financings which resulted in raising additional net proceeds of approximately US$6,172,000 of which US$6,127,000 of the original proceeds have been converted to common shares at December 31, 2025.

 20-F for the year ended December 31, 2025

The Company continues to develop its pipeline of opportunities to secure additional revenue contracts. The Company’s longer-term success remains dependent upon its ability to convert these revenue opportunities into successful contracts, to continue to attract new client projects, expand its revenue base to a level sufficient to exceed fixed operating costs, and generate consistent positive cash flow from operations. The occurrence and timing of these events cannot be predicted with certainty.

Further financing options that may or may not be available to the Company include the issuance of new equity, debentures or bank credit facilities. The need for any of these options will be dependent on the timing of securing additional SFD^®-related revenues and obtaining financing on terms that are acceptable to both the Company and the financier.

The consolidated financial statements do not reflect adjustments that would be necessary if the going concern basis was not appropriate. If the going concern basis was not appropriate for these consolidated financial statements, then adjustments would be necessary in the carrying value of the assets and liabilities, the reported revenues and expenses, and the balance sheet classifications used. These adjustments could be material.

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 (defined below).

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.

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 may not 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 person” insurance on any of our personnel.

We depend on key staff members that are involved in the SFD^® data interpretation process and to continue to enhance our technology. We are working to minimize dependency on key personnel. Currently, a total of four persons, two of which are highly experienced, are trained to interpret SFD^® signals. A process of formal documentation of the ongoing research and development of the sensor technology, the acquisition/survey methodologies, and the processing and interpretation work flows is ongoing and will be part of the management systems.

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.

Availability of Aircraft.

If 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.

 20-F for the year ended December 31, 2025

Debt Service

NXT has financed a portion of its operations through debt. Amounts paid in respect of interest and principal on debt incurred by NXT may impair NXT’s ability to satisfy its other obligations. All of NXT’s debt is fixed rate. The lender has been provided with security over substantially all of the assets of NXT. If NXT becomes unable to pay its debt service charges or otherwise commits an event of default such as bankruptcy, the lender may be able to foreclose on or sell the assets of NXT.

We rely on specialized equipment, including a limited number of SFD^® sensors and this limitation may affect our ability to conduct business.

NXT relies 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 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 mitigates this risk by researching new designs, constructing additional SFD^® sensor devices and obtaining replacement cost insurance on each SFD^® sensor.

Our financial position is affected by foreign currency fluctuations.

The Company is exposed to foreign exchange risk in relation to its potential holding of significant US$ balances in cash and cash equivalents, deposits, accounts payables, accrued liabilities, and lease obligations, and entering into United States dollar revenue contracts. The Company has not historically entered into hedging contracts to mitigate exposure to fluctuations in foreign exchange but has used strategies to reduce the volatility of US$ assets and liabilities, including converting excess US$ to Canadian dollars.

Changes in currency exchange rates could have an adverse effect on the Company’s business, financial condition and results of operations.

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. The Company’s long-term debt interest is fixed at 4% until 2031. Any refinancing of the long-term debt could result in a significantly different interest rate.

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 fluctuations in oil and natural gas prices. The impact of price changes on our ability to enter into SFD^® survey contracts cannot be readily determined at this time. However, in general, if commodity prices decline significantly, our opportunity to obtain and execute SFD^® survey contracts may also likely decline, at least in the short term. Therefore, NXT focuses on national oil companies as they have a long-term strategic view and are not as affected by short-term oil fluctuations.

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 individual.

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.

 20-F for the year ended December 31, 2025

Although we have adopted alternative control methods designed to mitigate our reduced ability to separate incompatible functions, these alternative controls may not operate at the same level of precision 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 us 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.)

We may periodically engage in transactions with related parties.

We may periodically enter into related party transactions. One of the members of NXT’s Board is a partner at the law firm Norton Rose Fulbright Canada LLP, which provides legal services to NXT. Another member of the Board was a board member of Pana Holdings Mauritius, the parent company of Ataraxia Capital (“Ataraxia”) until May 1, 2025. A third member of the Board is an employee of Mork Capital (defined below), which held two-year term convertible debentures until June 26, 2025.

Although we publicly disclose all related party transactions and manage potential conflicts of interest through mandated adherence to our Code of Conduct & Business Ethics and the maintenance of a strong independent 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 the Company.

Our rights to SFD^® technology may be challenged and we may need to defend our rights to the technology in the courts.

A risk exists that an unknown party may claim some legal entitlement to our IP, our rights to commercialize this IP, 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.

As explained in more detail below, on December 22, 2025, all the retained or otherwise remaining rights, title and interest in and to the SFD^® Technology were acquired by the Company from the estate of George Liszicasz.

Surveys have not been tested over all potential geological conditions.

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. If we are unable to keep pace with new technologies, evolving industry standards and demands, that could have a material adverse effect on our business, financial condition and results of operations.

 20-F for the year ended December 31, 2025

The financial statements rely upon estimates and assumptions that could be incorrect.

In preparing these Consolidated Financial Statements, NXT is required to make estimates and assumptions that affect both the amount and timing of recording assets, liabilities, revenues and expenses since the determination of these items may be dependent on future events. The Company uses the most current information available and exercises careful judgment in making these estimates and assumptions. In the opinion of management, these Consolidated Financial Statements have been properly prepared within reasonable limits of materiality and within the framework of the Company’s significant accounting policies. The estimates and assumptions used are based upon management’s best estimate as at the date of the Consolidated Financial Statements. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the period when determined. Actual results may differ from those estimates.

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.

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.

We have undertaken efforts and other steps to enhance our data security infrastructure. 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 and the United States OTC Markets Group’s Venture Stage Marketplace (the “OTC”) 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.

The market price for the common shares on the exchanges where our common shares are listed has been, and we anticipate will continue to be, very 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 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 common 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 common shares can adversely and potentially dramatically affect the market prices for those shares. Accordingly, investors in our common shares should anticipate both a volatile stock price and poor liquidity unless these conditions change.

 20-F for the year ended December 31, 2025

Our right to issue additional capital stock at any time could have an adverse effect on your proportionate ownership and voting rights.

Our right to issue additional securities at any time could have an adverse effect on a shareholder’s proportionate ownership.

We are authorized under our Articles of Continuance to issue an unlimited number of common shares and unlimited number of Preferred Shares. We may issue common shares and Preferred Shares under such circumstances and in such manner and at such times, prices, amounts and purposes as our Board may, in its discretion, determine to be necessary and appropriate, subject to compliance with all applicable exchange regulations and corporate and securities laws. Any such issue of common shares or Preferred Shares would dilute the proportionate ownership of the current holders of those securities.

We may not be able to protect our trade secrets and IP 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 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 research and development initiatives) have been very successful. Squire Patton Boggs LLP, a United States-based leader in IP protection, has been advising NXT on our IP strategy, including the prior filing of an initial United States provisional patent application in May 2012. In November 2014, NXT filed a related patent amendment submission in the United States and since that time has undertaken new patent applications in select strategic international markets.

So far, SFD^® patents have been granted in India (July 2021), Russia (January 2017), Japan (July 2017), Canada (August 2017), Mexico (September 2017), the United States (two patents were granted in November 2017 and September 2018, respectively), China (April 2018), and in the European Patent Office (January 2020). In summary, the total number of countries granting our patents is forty-seven. The patents serve an important purpose of the protection for our proprietary SFD^® technology. The patents also serve as multiple independent third-party recognitions of the technological invention in terms of practical applicability, conceptual novelty, and knowledge advancement.

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 with 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 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 has access or knowledge of all aspects of the SFD^® system. Currently, no third party has any significant knowledge of the technology.

 20-F for the year ended December 31, 2025

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.

Development, Commercialization, and Protection of the Geothermal Rights

With the acquisition of the Geothermal Rights, the Company will continue to refine and develop the SFD^® survey system to commercialize the Geothermal Rights. This development requires substantial time and resources, and continued government assistance is not guaranteed. Furthermore, even if resources are available, there can be no assurance that the Company will be commercially or technically successful in enhancing the technology. If we are unable to develop and commercialize the geothermal applications of SFD^® technologies, or adapt to evolving industry standards and demands, these could have an 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 and they mitigate 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’s approved and audited operating procedures. The aircraft operator employs the required pilots, aircraft maintenance engineers, 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.

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 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 operate in foreign countries that can experience significant social upheaval and criminal activity. 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.

 20-F for the year ended December 31, 2025

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 withholding taxes) on the repatriation back to Canada of our earnings in foreign countries in which we have operated, 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.

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.

Corruption and Bribery - 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.

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 Federal Aviation Administration 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, 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, Africa, Asia, and other global regions in accordance with these typical requirements.

Based on 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.

 20-F for the year ended December 31, 2025

Credit risk arises from the potential that the Company may incur a loss if counterparty to a financial instrument fails to meet its obligation in accordance with agreed terms.

The Company’s financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents, short-term investments and accounts receivable. The carrying value of cash and cash equivalents, short-term investments, and accounts receivable reflects management’s assessment of credit risk. On December 31, 2025, cash and cash equivalents included balances in bank accounts placed with financial institutions with investment grade credit ratings. The Company manages accounts receivable credit risk by requiring advance payments before entering into certain contract milestones and when possible, accounts receivable insurance.

Tax Matters

The Company and its subsidiaries are subject to income, value added and other taxes in Canada, the United States and numerous foreign jurisdictions. Changes in tax laws or interpretations thereof or tax rates in the jurisdictions in which the Company or its subsidiaries do business could adversely affect the Company’s results from operations, returns to shareholders, and cash flow. Our effective tax rates could also be affected by changes in the mix of earnings in countries with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities, or changes in tax laws or their interpretation. While management believes the Company and its subsidiaries are in compliance with current prevailing tax laws and requirements, one or more taxing jurisdictions could seek to impose incremental or new taxes on the Company or its subsidiaries or the Company or its subsidiaries could be subject to assessment, reassessment, audit, investigation, inquiry or judicial or administrative proceedings by any such taxing jurisdiction. The timing or impacts of any such assessment, reassessment, audit, investigation, inquiry or judicial or administrative proceedings or any future changes in tax laws, including the impacts of proposed regulations, cannot be predicted. Any adverse tax developments, including legislative changes, judicial holdings or administrative interpretations, could have a material and adverse effect on the results of operations, financial condition and cash flows of the Company.

Occurrence of Natural Disasters, Epidemics or Other Events

Our business could be materially and adversely affected by natural disasters, such as fires or floods, the outbreak of a widespread health epidemic or pandemic, or other events, such as wars, including the military conflicts, acts of terrorism, power shortages or communication interruptions. The occurrence of a disaster or similar event could materially disrupt our business and operations. These events could also cause us to close our operating facilities temporarily, which would severely disrupt our operations and have a material adverse effect on our business, financial condition and results of operations. In addition, our net sales could be materially reduced to the extent that a natural disaster, health epidemic or other major event harms the economies of the countries in which we operate. As such, the outbreak of hostilities between Russia and Ukraine could result in more widespread conflict and could have a severe adverse effect on the surrounding regions and the related markets, and on our business, financial condition and results of operations. The duration of the conflicts and related events and whether they escalate further cannot be predicted. Our operations could also be severely disrupted if our customers, partners and other third-party providers or other participants were affected by natural disasters, health epidemics, or other major events, such as wars and military conflicts.

Tariff and Trade Risk

Ongoing geopolitical tensions may lead to trade restrictions or tariffs that may impact NXT’s business. Tariffs, imposed on products imported into ANADA, including operating and aircraft supplies would and do increase costs. Tariffs may disrupt trade and increase energy costs. Depending on responses from Canada on tariffs, trade tensions may exacerbate and could potentially escalate into a broader trade war, further impacting the economy and destabilizing markets – including the oil and natural gas market. Trade restrictions and tariffs may also increase volatility in, or have an adverse impact on, exchange rates and interest rates. Such occurrences may materially affect NXT’s business, cashflows and financial position.

 20-F for the year ended December 31, 2025

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 and will be dependent upon our consolidated financial condition, results of operations, capital requirements and other factors as our Board may deem relevant at that time.

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, three of our current members of our Board and our officers are residents of Canada or Ireland. 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 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.

NXT’s corporate history is summarized as follows:

 20-F for the year ended December 31, 2025

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 and Exchange Commission in accordance with the Exchange Act.

The underlying technology employed by our SFD^® survey system was invented by Mr. Liszicasz, our former Chairman, President and Chief Executive Officer (“CEO”). 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. For further details of the TTA, see “Exhibit 4.1”.

On April 18, 2021 the TTA was amended so that Mr. Liszicasz transferred to us all his rights and entitlements to the SFD^® technology for the use in the field of geothermal resources. All other all rights, title, and interest in and to the SFD^® technologies for all other commercial applications remained with Mr. Liszicasz.

On December 23, 2025, NXT acquired remaining SFD^® rights for all present and future applications, sensor uses, and geophysical targets using SFD^®, and as a result has full ownership of the SFD^® technology. As a result of this transaction, NXT now holds full ownership of the SFD^® technology across all present and future applications, sensor uses, and geophysical targets, including, but not limited to mineral systems and other strategic subsurface resources.

Our business does not normally rely on significant capital expenditures other than required regulatory additions to the aircraft. For 2026 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 $89,448 (2025), $27,029 (2024), and $32,322 (2023).

The Company does not currently have any significant capital expenditures in progress, or planned for the short term.

 20-F for the year ended December 31, 2025

SEC maintains an internet site (http://www.sec.gov), which contains reports, proxy and statements, and other information regarding NXT that we file electronically with the SEC. Our website is http://www.nxtenergy.com.

B. Business overview.

Description of the nature of the Company’s operations and principal activities

NXT Energy Solutions Inc. is a Calgary-based technology company whose proprietary airborne SFD^® survey system, applied in numerous basins around the world, uses the principles of quantum mechanics to infer stress anomalies of exploration interest. The method can be used both onshore and offshore to remotely identify areas conducive to fluid entrapment in order to recommend areas with commercial hydrocarbon and/or geothermal potential. The SFD^® survey system enables our clients to focus their exploration decisions concerning land commitments, data acquisition expenditures and prospect prioritization on areas with the greatest potential. SFD^® is environmentally friendly and unaffected by ground security issues or difficult terrain and is the registered trademark of NXT Energy Solutions Inc. NXT Energy Solutions Inc. provides its clients with an effective and reliable method to reduce time, costs, and risks related to exploration.

We utilize our proprietary, airborne SFD^® survey system to provide a service for the geothermal and 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. Recently NXT’s principal markets have been in Africa and Asia.

SFD^® sensors remotely respond to gravity perturbations that are associated with subsurface density and stress regimes that are meaningful for hydrocarbon and geothermal exploration. These responses are captured as raw data that, when interpreted, can provide a qualitative method to detect the presence of geological features such as structures, faults, fractures and reefs that are often associated with fluid accumulations and transport. The SFD^® technology can be deployed over any terrain in onshore, offshore and near-shore environments and has been used both for prospect level exploration and as a reconnaissance tool in frontier and under-explored areas. The SFD^® survey system has been demonstrated to quickly focus exploration resources, offering the benefit of reducing the risk, time and expense associated with the upstream cycle. As part of NXT’s SFD^® services, recommendations with rankings are provided to the customer enabling them to prioritize their highest value prospects for 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 Africa, Latin America, and 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.

NXT has been effective in positioning the SFD^® method as an established geophysical tool for oil and gas exploration following the successful completion of projects in Canada, the United States, Columbia, Argentina, Bolivia, Mexico, Pakistan, Africa, Türkiye, and most recently in South East Asia. Our efforts have been supported with the publication of technical papers, creation of project case studies and the development of a strong list of references and recommendation letters. In addition, NXT has now been granted patents or received patent allowance in forty-seven separate countries.

 20-F for the year ended December 31, 2025

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:

As we continue to progress and grow our project pipeline on a fee-for-survey-projects basis, we remain optimistic given our progress during 2025. We conduct our operations in line with the Company’s HS&E policies and safety management systems.

Description of the principal markets in which the Company competes

We 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.

The Company generates revenue from its SFD^® survey system that enables the clients to focus their exploration decisions concerning land commitments, data acquisition expenditures and prospect prioritization on areas with the greatest potential. NXT conducts all of its survey operations from its head office in Canada, and occasionally maintains administrative offices in foreign locations if and when needed. Revenue fluctuations are a normal part of SFD^® related revenue and can vary significantly year-over-year.

Revenues for 2025, 2024 and 2023 were generated solely from the Hydrocarbon Right. There were no revenues from the Geothermal Right in any of the periods.

A summary of SFD^® related revenues derived in our primary geographic market segments for the last 3 fiscal years, and highlights of global survey operations, follows:

 20-F for the year ended December 31, 2025

International Markets

SFD^® Survey in Pakistan

On December 4, 2025, the Company announced that it successfully completed the data acquisition phase in Pakistan for its SFD^® survey with AL-Haj Enterprises Private Limited (the “AL-Haj SFD^® Survey”). NXT’s interpretations were completed in Q1-26 and recommendations are expected to be delivered to the customer by the end of Q2-26.

SFD^® Surveys in Africa

On September 24, 2024, the Company announced that it signed a contract with its Strategic Alliance Partner, Synergy, to provide a second SFD^® survey for an oil and gas exploration company in Africa (the “African SFD^® Survey”). NXT has now completed SFD^® data acquisition and interpretation of the African SFD^® Survey.

On May 1, 2025, the Company announced that it has entered into an additional contract with Synergy, to provide an SFD^® survey in Africa. Data acquisition operations for this SFD^® contract are expected to commence in the second quarter of 2026, and NXT’s interpretations and recommendations for both African SFD^® Surveys are expected to be delivered to the client in the third quarter of 2026.

SFD^® Survey in Southeast Asia

On May 22, 2024, the Company announced that it entered a contract to provide an SFD^® survey to an independent oil and gas exploration company in Southeast Asia (the “Southeast Asia SFD^® Survey”). Interpretation of the survey results and recommendations with respect to this survey were completed in July 2025.

SFD^® Survey in Türkiye

On September 5, 2023, the Company announced that it had signed a contract to provide an SFD^® survey to an independent oil and gas exploration company in Türkiye, which is strategically located at the junction of Eastern Europe, Central Asia and the Middle East (the “Turkish SFD^® Survey”). NXT delivered the final SFD^® survey results to its Turkish customer and performed the integration of SFD^® data with the customers’ existing geological and geophysical data in March 2024. All flight operations related to the data acquisition survey phase were completed in January 2024. As part of NXT’s SFD^® services, recommendations with rankings are provided to the customer identifying their highest value prospects for exploration. NXT has been fully paid for this survey and is actively pursuing additional SFD^® survey opportunities in the Turkish region.

SFD^® Survey in South Asia

On April 8, 2026 NXT announced that it has entered into a contract to provide an SFD^® survey to an independent oil and gas exploration company in South Asia. Details of this typical survey are to remain confidential at this time, at the Client’s request. Data acquisition operations for this contract are expected to commence by the third quarter of 2026, and NXT’s interpretations and recommendations are expected to be delivered during the fourth quarter of 2026.

Geothermal Update

Geothermal SFD^® Survey in Alberta, Canada

On August 21, 2024, the Company announced that it entered into a contract to provide a geothermal SFD^® survey to Alberta Geothermal Resource Recovery Inc. (“AGRRI”). The AGRRI survey is an important milestone in NXT’s development of the geothermal application of our SFD^® technology; our first geothermal survey for a client. The value to NXT is to demonstrate the commerciality of SFD^® in the geothermal domain. The survey has been performed and results are being reviewed.

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 SFD^® survey contracts each year.

 20-F for the year ended December 31, 2025

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.

In order to conduct our survey operations, we require the following:

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 United States and formally filed an SFD^® technology 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.

 20-F for the year ended December 31, 2025

In 2017, NXT expanded and protected its IP (including patenting and new research and development initiatives). Squire Patton Boggs LLP, a United States-based leader in IP protection, has been advising NXT on its IP strategy, including the prior filing of an initial United States provisional patent application in May 2012. In November 2014, NXT filed a related patent amendment submission in the United States and since undertaken new patent applications in select strategic international markets.

NXT has been granted SFD^® patents in India (July 2021), Russia (January 2017), Japan (July 2017), Canada (August 2017), Mexico (September 2017), the United States (two patents were granted in November 2017 and September 2018, respectively), China (April 2018), and in the European Union (January 2020). In total, NXT has obtained SFD^® patents in forty-seven jurisdictions. These patents protect our proprietary SFD^® technology and serve as independent third-party recognition of our technological invention in terms of 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 and 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 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 (that is, a tract 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 as compared to traditional seismic surveying, and can 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 or the United States 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 United States.

SFD^® surveys in other countries must often comply with three requirements not encountered in Canada and the United States. These requirements usually include, but are not limited to:

 20-F for the year ended December 31, 2025

NXT has successfully operated in several different countries in accordance with these requirements.

With our past experience in Canada, the United States, Türkiye, Nigeria, 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 us to forfeiture of performance bonds.

C. Organizational structure.

The following table provides a list of all subsidiaries and other companies controlled by NXT:

¹On January 16^th, 2017, the name of Survey Services International Inc. was changed to “Cascade Petroleum Inc.” 

D. Property, plant and equipment.

Facilities / Office Premises

NXT leases 7,300 square feet of office premises at 3320 – 17th Avenue SW in Calgary, Alberta, Canada. The lease expires in September 2030.

 20-F for the year ended December 31, 2025

Aircraft

In order to perform our survey services, NXT is required to fly the survey area in a jet aircraft. On March 22, 2024 the Company extended its aircraft lease for three years, until March 28, 2027. The aircraft lease was converted to a capital lease and the Company will own the aircraft at the end of the lease. Terms of the extension include a principal of US$1,210,000, an interest rate of 12%, and monthly payments of US$40,189. The Company has an early purchase option to acquire the aircraft on September 28, 2026.

Equipment

Our SFD^® technology is comprised of three main components, as detailed in the first three items 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:

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. We are not affected by any significant environmental concerns, nor is there any planned significant capital additions contemplated. We have accrued approximately $23,311 for asset retirement obligations related to the minor non-operating interest in these oil and gas wells in which NXT has outstanding abandonment and reclamation obligations in accordance with government regulations. The estimated future abandonment liability is based on estimates of the future timing and costs to abandon, remediate and reclaim the well sites within the next five years.

ITEM 4A. UNRESOLVED STAFF COMMENTS

Not applicable.

 20-F for the year ended December 31, 2025

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 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

Summary financial highlights for the last three fiscal years are as follows:

Financial Highlights for 2025

2025 has been a transformational year for NXT. Strategic initiatives undertaken in 2023 are now taking shape. Revenue increased from 644,284 in 2024 to $16,351,286 in 2025, a 2,437% increase. Operating cash inflow improved $5,132,508 versus 2024. Net loss improved by $6,760,646 versus 2024. These favourable financial numbers were all the result of the Company executing on three SFD^® surveys in three different parts of the world. In December 2025 we acquired all the remaining and future rights and applications for the SFD^® technology giving us unencumbered ability to further develop the technology. In November 2025 we secured a US$2.0 million investment to advance the application of the Company’s proprietary SFD^® technology within select areas of Western Canada, opening up new opportunities for the Company. With this progress, convertible debenture holders showed their confidence by converting 100% of their convertible debentures into common shares giving NXT a strong balance sheet with strengthened working capital and overall financial position.

The 2025 result was heavily skewed by a non-cash accounting charge. The company recognized a loss of $5.4 million on the fair value remeasurement of its convertible debentures. This charge is a direct result of the increase in NXT’s common share price during the period and conversion dates, which increased the liability value of the conversion feature. This accounting requirement masks a much stronger underlying operational performance.

 20-F for the year ended December 31, 2025

Financial Highlights for 2024

 20-F for the year ended December 31, 2025

Financial Highlights for 2023

Revenue and expenses for the years ended December 31, 2025, 2024 and 2023

SFD^® related revenues – During 2025 NXT continued to diversify its sources of revenue through contracts in several regions allowing it to reduce concentration risk in a single geography and showing the broader acceptance of the SFD^® technology. In YE-25, SFD^®- related revenue was from three SFD^® surveys.

 20-F for the year ended December 31, 2025

In 2024 and 2023 the Company recorded revenues from Turkish SFD^® surveys.

SFD^® related costs – SFD^® related costs include lease expenses and aircraft operation and maintenance costs. In 2025, 2024 and 2023, the Company incurred aircraft operation costs for aircraft lease, handling, maintenance costs and SFD^® survey operations. In 2025, aircraft lease costs were $nil because as of March 22, 2024, the Company extended its aircraft lease for an additional three years and converted the lease into a finance lease. As a result, amortization and interest increased $21,794 in 2025 versus 2024. Aircraft operations were $1,306,600 (86%) higher as scheduled maintenance was performed on the aircraft after the African SFD^® and Southeast Asia surveys. Survey project costs were $2,521,010 (approximately 621%) higher versus 2024 as the Company incurred costs for the three SFD^® surveys in 2025 versus two smaller surveys in 2024.

During 2024, aircraft operations were $647,939 (approximately 74%) higher as pilot training and required maintenance were performed before the mobilization of upcoming SFD^® Surveys. Survey projects were $602,521 lower due to costs incurred to perform the Turkish SFD^® Survey in Q4-23. Aircraft lease costs were approximately 75% lower due to the conversion of the lease from an operation lease to a finance lease. $364,013 of lease costs in 2023 were partially offset by approximately $311,190 of lease, depreciation and interest costs in 2024.

In 2023 the Company incurred increased SFD^® related costs due to the Turkish SFD^® survey.

G&A- G&A is a major component of NXT’s total expenses. The categories included in G&A are as follows:

G&A expenses increased $283,547, or 7%, in 2025 compared to 2024 for the following reasons: 

 20-F for the year ended December 31, 2025

G&A increased $625,635 or 18%, in 2024 compared to 2023 for the following reasons: 

Stock-based compensation

SBCE varies in any given year as it is a function of several factors including the number of units of each type of stock-based compensation plan issued in the period and the amortization term (based on the term of the contract and/or number of years for full vesting of the units. 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 and for cash-settled stock-based compensation awards variability will occur based on changes to observable prices. Stock options granted generally expire, if unexercised, five years from the date granted and entitlement to exercise them generally vests at a rate determined by the Board. On January 6, 2023, the Company granted 2,050,000 incentive stock options at a strike price of $0.216 to employees, officers and directors (the “2023 Options”). The 2023 Options vest upon the occurrence of several milestones relating to the cash received for SFD^® services performed as follows: (i) one-third of the 2023 Options vest upon the collection of US$6.5 million for SFD^® services performed; (ii) one-third of the 2023 Options vest upon the collection of the next US$7.0 million for SFD^® services performed; and (iii) the final one-third of the 2023 Options vest upon collection of an additional US$7.5 million for SFD^® services performed. The Company has reached the first milestone of collecting US$6.5 million for the 2023 Options. The Company estimates that it should reach the remaining two milestones in 2026.

On February 24, 2025, the Company granted 1,400,000 incentive stock options at a strike price of $0.203 to directors of the Company (the “Incentive Options”). The Incentive Options will vest upon the Company achieving a trailing twelve-month free cash flow per share of $0.10. The Company currently estimates that it will achieve this target of $0.10 during Q1-27. Reaching the target has been delayed by one year due to the delayed start date for the second African SFD^® Survey and the increase in the outstanding shares due to the 2025 Private Placement (defined below).

On December 16, 2025, the Company granted 4,300,000 additional incentive stock options at a strike price of $0.309 to employees and directors of the Company (the “December 25 Incentive Options”). One half of the December 25 Incentive Options will vest when the Company achieves a trailing twelve-month free cash flow per share of $0.15. The other half will vest when the Company achieves a trailing 12-month revenue of $25,000,000. The Company currently estimates that it will achieve both targets during Q1-27.

The deferred share unit (“DSUs”) plan (the “DSU Plan”) is a long-term incentive plan that permits the grant of DSUs to qualified directors. DSUs granted under the DSU Plan are to be settled at the retirement, resignation or death of the Board member holding the DSUs. RSUs entitle the holder to receive, at the option of the Company, either the underlying number of shares of the Company’s common stock upon vesting of such units or a cash payment equal to the value of the underlying shares.

 20-F for the year ended December 31, 2025

Restricted Share Units (“RSUs”) entitle the holder to receive, at the option of the Company, either the underlying number of shares of the Company’s common shares upon vesting of such RSUs or a cash payment equal to the value of the underlying shares. The RSUs vest at a rate of one-third on the first, second and third anniversaries of the date of grant. The Company has historically settled the exercise of vested RSUs with common shares and cash. On February 21, 2024, the Company granted 1,035,000 RSUs to employees and officers which will vest over a three-year period. On February 24, 2025, the Company granted 1,875,000 RSUs to employees and officers which will vest over a three-year period.

The Employee Share Purchase Plan (the “ESP Plan”) allows employees and other individuals determined by the Board to be eligible to contribute a minimum of 1% and a maximum of 10% of their earnings to the plan for the purchase of common shares in the capital of the Company, of which the Company will make an equal contribution. Common shares contributed by the Company may be issued from treasury or acquired through the facilities of the Toronto Stock Exchange. During 2025, 2024 and 2023 the Company has elected to issue Common Shares from treasury.

SBCE in 2025 was higher compared to 2024 by $434,146 or 162%. The Company began to recognize the expense for both the 2023 Options, the Incentive Options and the December 25 Incentive Options, versus only the 2023 Options in 2024. In addition, five directors received their fees as DSUs during 2025, versus none in 2024. Also, the ESP Plan costs increased as employee contributions increased in 2025 versus 2024. The RSU expense in 2025 reflected the costs of two RSU grants versus one in 2024 and a higher share price.

SBCE in 2024 was higher compared to 2023 by $27,463 or approximately 11%. The Company began to recognize expense for the first two milestones of the 2023 Options in 2024. Stock option expense in 2023 was for director fees reimbursed via stock options. In addition, $15,000 of director fees were reimbursed by DSUs during Q4-24, but there were zero DSUs issued in Q4-23. The ESP Plan expense increased as employee participation in the plan increased in 2024 versus 2023. The RSU expense decreased year over year as the 2024 RSU grant versus the 2023 RSU grant accrued a lower cost due to the lower share price and less units in the 2024 grant versus the previous 2020 RSU grant which had its final vesting period in 2023.

On October 1, 2023 the Company entered into a service agreement with a marketing consultant to provide sales and market services to introduce potential customers to the SFD^® technology, attend trade shows, and update the Company’s market systems. The consultant agreed to be compensated in common shares only for approximately US$16,000 per month, based on the five-day volume average price at the end of each month until February 29, 2024. On December 31, 2024, a total of 634,439 common shares were due to the marketing consultant (360,139 common shares at December 31, 2023). On January 29, 2025, 634,439 common shares were issued to the marketing consultant.

Amortization Expense

Property and equipment and Intellectual property is recorded at cost, less accumulated amortization, which is recorded over the estimated service lives of the assets using annual rates and methods which are also subject to ongoing tests of potential impairment of the recorded net book value.

Property and equipment and related amortization expense. Property and equipment depreciation was higher in 2025 versus 2024 and versus 2023 as the Company converted its aircraft lease to a finance lease in Q2-24, and as a result, began to record the amortization of the aircraft as a depreciating expense over the estimated remaining useful life of approximately ten years for the aircraft. Amortization also decreases each year as the Company uses the declining balance method of amortization, thereby having the effect of lowering amortization each year on existing assets.

 20-F for the year ended December 31, 2025

IP 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 former 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 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 an ongoing assessment of potential indicators of impairment of the recorded net book value.

As discussed in Item 4.B., the Company acquired the SFD^® technology for the Geothermal Right from NXT’s Chairman, President and Chief Executive Officer on April 18, 2021. The Geothermal Right is being amortized on a straight-line basis over its estimated useful life of 20 years. The annual amortization expense expected to be recognized is approximately $13,781 per year for a five-year aggregate total of $68,902.

No impairments were recognized in 2025, 2024, or 2023.

Interest expense, net. This category of other expenses includes interest income earned on short-term investments net of interest expense from the convertible debentures, and long-term debt.

Interest expense decreased $233,836 (31%) in 2025 versus 2024, due to the conversion of convertible debentures in the period between Q2-25 to Q4-25.

Interest expense increased in 2024 versus 2023, due to the Company issuing the Debentures during 2023 and 2024.

Foreign exchange loss (gain). This category of other expenses includes losses and gains caused by changes in the relative currency exchange values of US$ and CDN$. The Company held net US$ asset at December 31, 2025 and a net US$ liability at December 31, 2023 and 2022, which included accounts receivable, cash and cash equivalents, short-term investments, US$ lease obligations, convertible debentures and the security deposit for the aircraft, all of which have an effect on the unrealized foreign exchange gain and loss.

In 2025, even though the CDN$ strengthened versus the US$ by 4.6% since December 31, 2024, the Company still recorded a foreign exchange gain in 2025 as the conversion of the debentures in May and June 2025 was at a higher CDN$/US$ exchange rate.

For 2024 the exchange loss was the result of (i) the 8.7% weaker CDN$ to US$ between December 31, 2024 and December 31, 2023 and (ii) the Company having a net liability of US$7,130,144.

For 2023, the exchange gain was the result of (i) the 2.4% stronger CDN$ to US$ rate between December 31, 2022 and December 31, 2023 and (ii) the Company having a net liability of US$1,179,649.

The Company does not currently enter into hedging contracts, but does however use alternative strategies to reduce the volatility of US dollar assets including converting excess US dollars to CDN dollars.

Loss on fair value remeasurement. The Company recognized a loss of $5,418,502 in 2025 on the fair value remeasurement of the November Debentures (defined below) as of December 31, 2025, and also on the debentures converted to common shares (as at June 26, 2025 and September 23, 2025) which have been revalued at their fair value, using level 3 inputs which include the market price, volatility and conversion price of the Company’s common stock as at the conversion dates through 2025, and December 31, 2025. As the share price increased, the fair value of the convertible debentures also increased and vice versa.

  20-F for the year ended December 31, 2025

The Company recognized a loss of $296,534 in the 2024 financial year on the fair value remeasurement of the November Debentures and 2024 Debentures (each as defined herein) due to changes in the US$/CDN$ exchange rates and the Company’s share price.

Intellectual property. In 2025, 2024 and 2023, the Company’s IP and other expenses were associated with periodic patent maintenance and renewal fees required during these time periods.

ARO and related expenses. This category of other expenses primarily includes Asset retirement obligations (“ARO”) 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. The estimated future abandonment liability is based on estimates of the future timing and costs to abandon, remediate and reclaim the well sites within the next five years.

Loss on disposal of assets & lease modifications. During Q2-24 the Company reduced its office space by approximately 31% and extended its office lease until September 2030. In Q1-24, the Company extended its Aircraft lease for three years, until March 28, 2027. As a result, the Company recognized a loss on lease modifications in YE-24. In YE-25 the Company disposed of obsolete equipment.

Purchase of remaining SFD^® technology & rights. On December 23, 2025, NXT acquired remaining SFD^® rights for all present and future applications, sensor uses, and geophysical targets using SFD^®, and as a result has full ownership of the SFD^® technology. The consideration paid for these remaining SFD^® rights have been expensed.

Income tax expense – The Company anticipates that operations in foreign countries during 2025 will give rise to a tax liability in those countries. Below is the estimated tax expense. There was no tax expense in 2024 or 2023.

At the end of 2025, 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 2031 to 2044) and other resource deductions totaling approximately $12.5 million.

 20-F for the year ended December 31, 2025

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

Significant or Unusual Items Impacting Net Loss:

During Q4-25, SFD^®-related revenue versus the previous two quarters increased due to the Al-Haj SFD^® survey in Q4-25 and as a result also decreased the net loss. During Q3-25, the loss was driven by SFD^®-related costs, net increasing due to costs to support the SFD^® flown surveys and aircraft maintenance costs for upcoming SFD^® surveys. During Q2-25, the Company recorded a net loss due to the fair value remeasurement on the convertible debentures. During Q1-25, the Company’s earned net income due to the African SFD^® Survey. During Q4-24, the Company’s net loss increased due to unrealized foreign exchange losses due to the weakening CDN$ and interest increases due to the issuance of the debentures. In Q3-24, the Company incurred additional G&A costs in anticipation of increased commercial activity, recognized a gain for the fair value remeasurement of the convertible debentures, and unrealized foreign exchange loss (gain) improved due to a strengthening CDN$. In Q2-24, the Company wrote off leasehold improvements due to the 31% office space reduction, recognized a loss for the fair value remeasurement of the convertible debentures, related increased interest expense, and unrealized foreign exchange loss increased due to the net US$ liabilities held by the Company. In Q1-24, SFD^® related-revenues were from the Turkish SFD^® Survey. Net loss reflected higher SFD^®-related costs, net due to the Turkish SFD^® Survey an additional headcount, sales commissions and higher business development travel costs as well as interest expense due to the Debentures issued during 2023 and 2024 financial years. In each quarter between Q1-24 and Q4-24, the Company incurred net losses due to incurred SFD^®-related costs related to aircraft lease and aircraft maintenance costs, G&A expenses, and non-cash items such as SBCE, which can be a significant expense in any given quarter. More details are provided below:

 20-F for the year ended December 31, 2025

Advance Application of SFD^® Technology in Canada

On November 24, 2025, the Company received a US$2,000,000 strategic investment by way of a private placement of common shares to its largest shareholder Mork Capital to advance the application of the Company’s proprietary SFD^® technology within select areas of Western Canada. Mork Capital was issued 7,050,500 common shares of the Company at a price of CAD$0.40 per share for total gross proceeds of approximately US$2,000,000 (the “2025 Private Placement”). The 2025 Private Placement proceeds are providing NXT with enhanced balance sheet flexibility to accelerate widespread usage of SFD^® data in Canada while preserving its core business model as a technology and service provider.

As part of this process, the Company engaged Baycrest Energy Ltd. to assist in evaluating strategic pathways related to this initiative. The Company believes this initiative represents a meaningful opportunity to unlock shareholder value from NXT’s extensive proprietary SFD^® data library, which includes more than 50,000 line-kilometers of airborne geophysical data in the Western Canadian sedimentary basin.

Strategic Investment Africa

On May 24, 2023, the Company entered into a ten-year strategic alliance and associated financing with Synergy which grants Synergy an exclusive license to use, distribute, sub-license, market and sell NXT’s SFD^® solutions in Africa. In addition, on September 30, 2023, NXT extended the exclusive license to include Ataraxia, an affiliate of Synergy.

PE Energy Limited, an affiliate of Synergy and Ataraxia, has performed several commercial projects with NXT in Africa in the past, in addition to the African SFD^® Survey.

Synergy and Ataraxia, with this arrangement, will be advancing the SFD^® technology to address energy security and transition in the African continent for both oil and gas and geothermal sources. Synergy, Ataraxia and NXT have and will continue to work closely together to train local technical teams and regulatory authorities on the patented SFD^® technology. The local content is a commercial advantage for NXT and has shown early signs of increasing our operational efficiency.

Building upon a record of successful collaborations underpinned by the continued market demand in Africa, in 2023 Ataraxia executed the subscription agreement (the Ataraxia Subscription Agreement) pursuant to which Ataraxia agreed to subscribe for an aggregate of US$2.3 million convertible debentures (collectively, the “Ataraxia Debentures”), with a subscription price to be advanced in instalments, of which it completed US$1.4 million during Q3-23. In November 2024 Ataraxia funded the remaining balance of US$900,000. On May 30, 2025, Ataraxia converted US$2,300,000 of convertible debentures into 13,540,208 common shares

 20-F for the year ended December 31, 2025

B. Liquidity and capital resources.

Going Concern

The Consolidated Financial Statements 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.

The events described in the following paragraphs highlight that there continues to be material uncertainties that cast substantial doubt about NXT’s ability to continue as a going concern within one year after the date that the Consolidated Financial Statements have been issued. The Company’s current cash position is not expected to be sufficient to meet the Company’s obligations and planned operations for a year beyond the date that the Consolidated Financial Statements have been issued.

During 2024 the Company completed an SFD^® survey and had received deposits on three other SFD^®surveys planned to be executed in 2025 (the “2025 SFD^® Surveys”). As of the date of these financial statements, the Company has finished one of those SFD^® surveys and the interpretation phase of two of the 2025 SFD^® Surveys. In addition, during 2023 and 2024 the Company completed convertible debenture financings which resulted in raising additional net proceeds of approximately US$6,172,000 of which US$6,127,000 of the original proceeds have been converted to common shares as of December 31, 2025.

The Company continues to develop its pipeline of opportunities to secure additional revenue contracts. The Company’s longer-term success remains dependent upon its ability to convert these revenue opportunities into successful contracts, to continue to attract new client projects, expand its revenue base to a level sufficient to exceed fixed operating costs, and generate consistent positive cash flow from operations. The occurrence and timing of these events cannot be predicted with certainty.

Further financing options that may or may not be available to the Company include the issuance of new equity, debentures or bank credit facilities. The need for any of these options will be dependent on the timing of securing additional SFD^® related revenues and obtaining financing on terms that are acceptable to both the Company and the financier.

The Consolidated Financial Statements do not reflect adjustments that would be necessary if the going concern basis was not appropriate. If the going concern basis was not appropriate for these Consolidated Financial Statements, then adjustments would be necessary in the carrying value of the assets and liabilities, the reported revenues and expenses, and the balance sheet classifications used. These adjustments could be material.

NXT’s cash and cash equivalents and short-term deposits as at December 31, 2025, totaled $3,920,213. Net working capital totaled $5,257,017.

Risks related to having sufficient ongoing net working capital to execute survey project contracts are mitigated through NXT’s normal practice of obtaining advance payments and progress payments from customers throughout the course of projects, which often span three to four months. In addition, where possible, risk of default on client billings are mitigated using export insurance programs offered by Export Development Canada.

The Company does not have provisions in its leases, contracts, or other arrangements that would trigger additional funding requirements or early payments except if the Company were to default on its office lease, where the current month’s rent plus the next three months would 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.

  20-F for the year ended December 31, 2025

2025 Private Placement

On November 24, 2025, the Company received a US$2,000,000 strategic investment by way of the 2025 Private Placement to advance the application of the Company’s proprietary SFD^® technology within select areas of Western Canada. Mork Capital was issued 7,050,500 common shares of the Company at a price of CAD$0.40 per share for total gross proceeds of approximately US$2,000,000. The 2025 Private Placement proceeds are providing NXT with enhanced balance sheet flexibility to accelerate widespread usage of SFD^® data in Canada while preserving its core business model as a technology and service provider. Please see the section above “Advance Application of SFD^® Technology in Canada”

Debentures

2024 Debentures

On May 31, 2024, the Company issued convertible debentures (the “2024 Debentures”) to MCAPM LP for the principal amount of US$2,000,000 (approximately CDN$2,773,660). The 2024 Debentures bore interest at 10.0% per annum, paid quarterly in arrears, and were due on May 31, 2026. The 2024 Debentures were convertible into common shares at a conversion price of US$0.25 (approximately CDN$0.3428) per common share, which provided MCAPM LP with the right to obtain up to 8,000,000 common shares of the Company.

The proceeds from the 2024 Debenture were used to support the working capital needs of SFD^® surveys and other G&A costs, which include business development and marketing activities required to transform the existing pipeline of SFD^® opportunities into firm contracts.

November Debentures

On November 8, 2023, the Company issued the first tranche of a multi-tranche unsecured convertible debenture (the “November Debentures”). The November Debentures bore interest at 10.0% per annum, paid quarterly in arrears, and were due and payable two years after issuance. The November Debentures were convertible into common shares in the capital of NXT at a fixed conversion price of US$0.1808 (CDN$0.25). During 2023, the Company issued the first two tranches of the November Debentures for US$1,150,000 (approximately CDN$1,577,600).

On January 12, 2024, the Company closed the final tranche of the November Debentures for an additional US$722,000 (approximately CDN$966,036). Including the final tranche, the Company issued a total of US$1,872,000 (approximately CAD$2,543,636) of the November Debentures, which will allow the subscribers to obtain an aggregate of up to 10,353,982 common shares. Insiders, which include Mork Capital and all the directors of NXT, were issued November Debentures valued, in the aggregate principal amount, at US$1,522,000 (approximately CDN$2,076,776).

Ataraxia Debentures

In May 2023, the Company signed the Ataraxia Subscription Agreement in which Ataraxia would purchase US$2,300,000 of convertible debentures. The terms of the convertible debentures issued to Ataraxia included an annual interest rate of 10% paid quarterly in arrears. The convertible debentures can also be converted into voting preferred shares with an annual dividend rate of 10% paid per quarter. The preferred shares were not transferable, but could be converted on a one-to-one basis into common shares. The convertible debentures were payable on demand two years after the issue date and were secured by a general security agreement, subordinate to the long-term debt.

On May 31, 2023, the Company issued a two-year term convertible debenture for US$1,200,000 (approximately CDN$1,631,954) to Ataraxia and an additional US$200,000 (approximately CDN$265,560) on July 10, 2023 (the “2023 Ataraxia Debentures”). The 2023 Ataraxia Debentures had a fixed conversion price of US$0.143 per common share.

  20-F for the year ended December 31, 2025

On November 4, 2024, the Company issued a two-year term convertible debenture for US$500,000 (approximately CDN$676,995) to Ataraxia and an additional US$400,000 (approximately CDN$550,296) on November 12, 2024 (the “2024 Ataraxia Debentures”). The 2024 Ataraxia Debentures had a fixed conversion price of US$0.24 per common share. The proceeds from the 2024 Ataraxia Debentures have been used to support the working capital needs of the SFD^® surveys in Africa.

Debenture Conversions

On June 26, 2025, Mork Capital converted all of their convertible debentures into 15,605,088 common shares of NXT. On September 23, 2025, US$49,000 of the November Debentures were converted into 271,017 common shares of NXT. During December 2025, US$677,000 of November Debentures were converted into 2,228,979 common shares of NXT.

The remaining US$45,000 of the November Debentures at December 31, 2025, were converted into 248,893 common shares of NXT on January 5, 2026.

On May 30, 2025, Ataraxia converted US$2,300,000 of the Ataraxia Debentures into 13,540,208 common shares.

Mork Capital currently owns 37,576,821 common shares. This represents approximately 31.5% of the issued and outstanding common shares as of the date of this 20-F.

Investor’s Rights Agreement

On May 31, 2023, the Company and Ataraxia entered into an Investor Rights Agreement (the “Investor Rights Agreement”) pursuant to which Ataraxia has been granted the right: (i) to nominate one person for election or appointment as a director of the Company; (ii) to have one representative of Ataraxia attend the Company’s Board meetings as an observer (except any portion of a Board meeting where the Company’s relationship with Ataraxia is to be a subject of discussion); (iii) to purchase up to its pro rata portion (calculated on a fully diluted basis) of any securities offered by the Company, subject to certain limitations set forth in the Investor Rights Agreement; and (iv) receive certain information regarding the Company, including annual and quarterly financial statements, annual budgets, the capitalization tables, and access to its premises upon reasonable notification. In each case, Ataraxia will retain the rights set forth in the Investor Rights Agreement for so long as Ataraxia holds common shares representing at least 5% of the outstanding common shares of the Company. Ataraxia currently owns 13,540,208 common shares. This represents approximately 11.3% of the issued and outstanding common shares as of the date of this 20-F.

The Investor Rights Agreement is publicly available under the Company’s profile on SEDAR+ at www.sedarplus.ca.

2022 Private Placement

On December 22, 2022, the Company announced a multi-tranche private placement (the “2022 Private Placement”) at $0.195 per share. On December 22, 2022, the Company issued 1,148,282 common shares for gross proceeds of $223,915 in the first tranche, less issuance costs of $7,732. On January 25, 2023, the Company closed the 2022 Private Placement by issuing an additional 8,510,000 common shares, at $0.195 per common share, for additional aggregate gross proceeds of approximately $1,659,450, less issuance costs of $37,393. The proceeds from the 2022 Private Placement were used to support G&A, which include business development and marketing activities required to transform the pipeline of SFD® survey opportunities into firm contracts. Mork Capital purchased 8,750,000 common shares or $1,706,250 of the 2022 Private Placement along with two members of the Board for a total of $83,515.

Non-GAAP Measure: This discussion includes references to the term “net working capital”, which does 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.

 20-F for the year ended December 31, 2025

NXT had net working capital of $5,257,017 as at December 31, 2025, broken down as follows:

Net working capital as at December 31, 2025, compared to December 31, 2024, increased by $11,940,673, or 179%. Funds were received from the African SFD^® Survey and the 2025 Private Placement as well as accounts receivable increasing from the Al-Haj SFD^® and African SFD^® Surveys. Funds were used to settle scheduled lease and long-term liability obligations. Accounts payable and accrued liabilities increased due to costs accrued for the Al-Haj SFD^® Surveys and aircraft scheduled maintenance. Deferred revenue decreased 100% as both the African SFD^® Survey and the Southeast Asia SFD^® Survey were flown in 2025. The Company incurred foreign income taxes payable due to work in international locations in 2025. Convertible debentures decreased 98% as debentures were converted to common shares in 2025.

Long-term Debt (HASCAP Loan)

On May 26, 2021, the Company received $1,000,000 from the BDC’s HASCAP Loan. The HASCAP Loan is a $1,000,000 non-revolving ten-year term credit facility with an interest rate of 4%. Repayment terms were interest only until May 26, 2022, and monthly principal plus interest payments for the remaining nine years. The HASCAP Loan is secured by a general security agreement and is guaranteed by BDC.

 20-F for the year ended December 31, 2025

Sources and uses of cash

The overall net changes in cash balances in each of the years noted below 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, for the last three fiscal years is as follows: