NXT Energy Solutions Inc 6-K, filed Apr 5, 2022

NXT Energy Solutions Inc. (NSFDF)

6-K 2022-04-05 For: 2022-04-01

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Added on April 07, 2026

About this 6-K

NXT Energy Solutions Inc filed this 6-K on April 5, 2022.

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99.1	Consolidated Financial Statements for the year ended December 31, 2021

99.2	Management’s Discussion and Analysis (“MD&A”) for the year ended December 31, 2021

99.3	Annual Information Form for the year ended December 31, 2021

99.4	Certification Of Annual Filings CEO

99.5	Certification Of Annual Filings CFO

99.6	AB Form 13-501F1 (Class 1 and 3B Reporting Issuers - Participation Fee)

99.7	ON Form 13-502F1 (Class 1 and 3B Reporting Issuers - Participation Fee).

		NXT Energy Solutions Inc.
		(Registrant)

Date: April 4, 2022		/s/ Eugene Woychyshyn
		Eugene Woychyshyn
		Chief Financial Officer

	December 31,			December 31,
	2021			2020
Assets				Adjusted - Note 2
Current assets
Cash and cash equivalents	$	2,257,855		$	2,690,146
Short-term investments (Note 3)		550,000			341,261
Accounts receivable (Note 4)		841,567			965,548
Prepaid expenses and deposits (Note 5)		265,436			77,532
		3,914,858			4,074,487
Long term assets
Deposits (Note 6)		234,475			425,830
Property and equipment (Note 7)		624,763			707,326
Right of Use Assets (Note 8)		1,943,252			1,991,772
Intellectual property (Note 9)		14,867,023			16,285,333
	$	21,584,371		$	23,484,748
Liabilities and Shareholders’ Equity
Current liabilities
Accounts payable and accrued liabilities (Note 10, 25)	$	500,625		$	440,537
Contract obligations (Note 11)		-			127,507
Current portion of long-term debt (Note 12)		64,815			-
Current portion of lease obligation (Note 13)		532,936			687,991
		1,098,376			1,256,035
Long-term liabilities
Long-term debt (Note 12)		935,185			-
Long-term lease obligations (Note 13)		1,369,668			1,401,847
Asset retirement obligation (Note 14)		22,337			22,741
		2,327,190			1,424,588
		3,425,566			2,680,623

Shareholders’ equity
Common shares (Note 16): - authorized unlimited
Issued: 65,250,710 (2020 - 64,437,790) common shares		95,779,352			95,327,123
Contributed capital		9,381,966			9,355,716
Deficit (Note 2)		(87,002,513	)		(83,878,714	)
		18,158,805			20,804,125
	$	21,584,371		$	23,484,748

Signed “George Liszicasz”	Signed “Bruce G. Wilcox”
Director	Director

	For the Year ended December 31
	2021			2020			2019
				Adjusted - Note 2			Adjusted - Note 2
Revenue
SFD^®related revenue (Note 22)	$	3,134,250		$	136,566		$	11,976,149
Expenses
SFD^® related costs, net (Note 23)		1,224,168			1,111,070			2,653,055
General and administrative expenses (Note 18, 24 & 25)		3,189,857			3,341,010			3,541,594
Amortization (Note 7, 9)		1,776,484			1,780,806			1,781,181
		6,190,509			6,232,886			7,975,830
Other expenses (income)
Interest (income) expense, net		37,955			(14,062	)		(28,959	)
Foreign exchange loss (gain)		8,597			(64,432	)		177,736
Intellectual property and other		20,988			10,402			56,833
		67,540			(68,092	)		205,610

Income (loss) before income taxes		(3,123,799	)		(6,028,228	)		3,794,709

Income tax expense (Note 19)		-			-			-

Net income (loss) and comprehensive income (loss)		(3,123,799	)		(6,028,228	)		3,794,709
Net income (loss) per share (Note 17)
Basic		(0.05	)		(0.09	)		0.06
Diluted		(0.05	)		(0.09	)		0.06

	For the Year ending December 31
	2021			2020			2019
				Adjusted - Note 2			Adjusted - Note 2

Common Shares
Balance at beginning of the year	$	95,327,123		$	95,313,064		$	96,656,248
Shares purchased and retired during the year (Note 16)		-			-			(1,343,184	)
Issuance of common stock on Employee Share Purchase Plan (Note 16)		173,023			14,059			-
Issuance of common stock on Restricted Stock Unit Plan (Note 16)		114,604			-			-
Issuance of common stock on acquisition of SFD^® Geothermal Right, net of share issuance costs (Note 16)		164,602			-			-
Balance at end of the year		95,779,352			95,327,123			95,313,064
Contributed Capital
Balance at beginning of the year		9,355,716			9,306,493			9,262,684
Issuance of Equity for intellectual property (Note 16)		207,300			-			-
Transfer of equity to common shares (Note 16)		(207,300	)		-			-
Recognition of stock based compensation expense (Note 18)		26,250			49,223			43,809
Balance at end of the year		9,381,966			9,355,716			9,306,493
Deficit
Balance at beginning of the year		(83,878,714	)		(77,850,486	)		(81,645,195	)
Net (loss) income		(3,123,799	)		(6,028,228	)		3,794,709

Balance at end of the year		(87,002,513	)		(83,878,714	)		(77,850,486	)

Total Shareholders’ Equity at end of the year		18,158,805			20,804,125			26,769,071

Computer hardware (including survey equipment)	30% declining balance
Aircraft equipment	10% declining balance
Furniture and other equipment	20% declining balance
Leasehold improvements	10% declining balance

Balance Sheet	December 31, 2020
	As previously reported			Adjustments			Adjusted
Deposits	$	526,560		$	(100,730	)	$	425,830
Right of use assets		2,415,430			(423,658	)		1,991,772
Current portion of lease obligations		(773,465	)		85,474			(687,991	)
Long-term portion of lease obligations		(1,896,277	)		494,430			(1,401,847	)
Deficit		83,934,230			(55,516	)		83,878,714

Income Statement	For the year ended December 31, 2020
	As previously reported			Adjustments			Adjusted
SFD^® related costs	$	1,091,587		$	19,483		$	1,111,070
Interest (income) expense		(11,535	)		(2,527	)		(14,062	)
Foreign exchange loss (gain)		(76,029	)		11,597			(64,432	)
Net loss		(5,999,675	)		(28,553	)		(6,028,228	)

Income Statement	For the year ended December 31, 2019
	As previously reported			Adjustments			Adjusted
SFD^® related costs	$	2,611,086		$	41,969		$	2,653,055
Interest (income) expense		(20,684	)		(8,275	)		(28,959	)
Foreign exchange loss (gain)		233,231			(55,495	)		177,736
Net income		3,772,908			21,801			3,794,709
Deficit		77,934,555			(84,069	)		77,850,486

Consolidated Statements of cash flows	For the year ended December 31, 2020
	As previously reported			Adjustments			Adjusted
Net loss (see Note 2 “Leases”)	$	(5,999,675	)	$	(28,553	)	$	(6,028,228	)
Non-cash lease costs		(171,300	)		159,564			(11,736	)
Change in carrying amount of right of use assets & lease liabilities		-			21,470			21,470
Unrealized foreign exchange (gain) loss		141,799			(106,656	)		35,143
Operating activities		(3,452,925	)		45,824			(3,407,101	)
Repayment of financial liability		(42,515	)		(138,693	)		(181,208	)
Financing activities		(34,923	)		(138,693	)		(173,616	)
Effect of foreign exchange rate changes on cash and cash equivalents		(116,941	)		92,868			(24,073	)
Net increase (decrease) in cash and cash equivalents		(168,099	)		-			(168,099	)

Days to maturity	December 31, 2021		December 31, 2020
Less than 90 days	$	-	$	191,261
90 days to one year		550,000		150,000
		550,000		341,261

	December 31, 2021
	Cost		Accumulated		Net book
	Base		Amortization		value
Survey equipment	$	892,637	$	701,911	$	190,726
Computers and software		1,265,045		1,242,504		22,541
Furniture and other equipment		528,419		516,084		12,335
Leasehold improvements		1,084,573		685,412		399,161
		3,770,674		3,145,911		624,763

	1.	US$40,000 (CAD$50,310) signature payment, which became due immediately and was paid on April 22, 2021;

	2.	300,000 common shares, which were issued in December 2021;

	3.	CAD$15,000 signature milestone payment paid in August 2021;

	4.	US$200,000 milestone payment which will become due in the event that the Company’s cash balance exceeds CAD$5,000,000 due to receipt of specifically defined funds from operations; and

	5.	US$250,000 milestone payment which will become due in the event that the Company executes and completes and receives full payment for an SFD® contract valued at US$10,000,000 or greater, provided such contract is entered into and completed and payment of at least US$5,000,000 is received by April 18, 2023.

Maturity of long-term debt:
2022	104,167
2023	146,481
2024	142,037
2025	137,593
2026	133,148
2027 to 2031	534,907
Total principal and interest payments	1,198,333
Less interest	(198,333	)
Total principal remaining	1,000,000
Current portion of long-term debt	64,815
Non-current portion of long-term debt	935,185

Maturity of lease liabilities:				Weighted Average Remaining Lease Term
2022	$	702,215		3.4 years
2023		711,284		2.3 years
2024		481,885		1.5 years
2025		275,389		0.8 years
Total lease payments		2,170,773
Less imputed interest		(268,169	)
Total discounted lease payments		1,902,604
Current portion of lease obligations		532,936
Non-current portion of lease obligations		1,369,668

	Lease Term	Option to Extend	Incremental Borrowing Rate
Aircraft	April 2024	Executed		11.2	%
Office Building	September 2025	No		8.2	%
Printer	November 2022	No		8.9	%

For the fiscal year ending December 31,	Office Premises
2022	$	239,988
2023		239,988
2024		239,988
2025		179,991
		899,955

					For the years ended
	December 31, 2021				December 31, 2020
	# of shares		$ amount		# of shares		$ amount
As at the beginning of the year		64,437,790	$	95,327,123		64,406,891	$	95,313,064
Issuance for Employee Share Purchase Plan		304,550		173,023		30,899		14,059
Issuance for Restricted Stock Units		208,370		114,604		-		-
Issuance for SFD^® Geothermal Right (Note 9)		300,000		164,602		-		-
As at the end of the year		65,250,710		95,779,352		64,437,790		95,327,123

	For the Year Ended
	December 31, 2019
		# of shares			$ amount
As at the beginning of the year		68,573,558		$	96,656,248
Shares retired during the year		(4,166,667	)		(1,343,184	)
As at the end of the year		64,406,891			95,313,064

	For the years ended December 31,
	2021			2020			2019
				(Adjusted – Note 2)			(Adjusted – Note 2)
Net income (loss) for the year	$	(3,123,799	)	$	(6,028,228	)	$	3,794,709
Weighted average number of shares outstanding for the year:
Basic		64,658,380			64,409,170			68,156,059
Diluted		64,658,380			64,409,170			68,156,059
Net Income (loss) per share – Basic	$	(0.05	)	$	(0.09	)	$	0.06
Net Income (loss) per share – Diluted	$	(0.05	)	$	(0.09	)	$	0.06

Exercise price per share	# of options outstanding	# of options exercisable	Average remaining life (in years)
$0.44	21,360	21,360	4.5
$0.49	8,500	8,500	4.2
$0.51	16,000	16,000	3.7
$0.52	100,000	100,000	2.5
$0.55	30,000	30,000	3.1
$0.59	150,000	150,000	1.8
$0.62	18,050	18,050	5.0
$0.68	14,750	14,750	4.7
	358,660	358,660	2.7

	For the year ended
	December 31, 2019
				weighted
	# of stock			average
	options			exercise price
Options outstanding, start of the year		1,297,000		$	1.58
Granted		100,000		$	0.52
Expired		(47,500	)	$	(1.51	)
Forfeited		(180,000	)	$	(1.70	)
Options outstanding, end of the year		1,169,500		$	1.48
Options exercisable, end of the year		1,119,000		$	1.52

	For the years ended
Opening balance	2021		2020
DSUs outstanding, start of the year		37,354		-
Granted		-		37,354
Closing balance		37,354		37,354

							For the years ended,
	December 31, 2021						December 31, 2020
	# of RSUs			FV/Unit			# of RSUs		FV/Unit
RSUs outstanding, start of the year		1,200,000		$	0.79			-		-
Granted		-			-			1,200,000	$	0.45
Common shares issued		(208,370	)	$	(0.55	)		-		-
Payroll withholdings settled in cash		(139,964	)	$	(0.55	)		-		-
Forfeited		(155,000	)	$	(0.79	)		-		-
RSUs outstanding, end of the year		696,666		$	0.61			1,200,000	$	0.79

	·	payment of the Consideration (as defined below), and the satisfaction of the conditions thereto (including with respect to cash balances, receipt of funds, and the execution and completion of contracts);

	·	the development, commercialization and protection of the SFD^®technology for geothermal resource exploration;

	·	the extent to which expanding the Company’s scope of business to include exploring for both hydrocarbon and geothermal resources is anticipated to result in an expansion of its scope of revenue sources;

	·	the Company’s pursuit of opportunities to secure new revenue contracts;

	·	estimates related to our future financial position and liquidity including certain contractual obligations; and

	·	general business strategies and objectives.

	·	our ability to source personnel and equipment in a timely manner and at an acceptable cost;

	·	our ability to obtain all permits and approvals required;

	·	our ability to obtain financing on acceptable terms;

	·	our ability to obtain insurance to mitigate the risk of default on client billings;

	·	foreign currency exchange and interest rates; and

	·	general business, economic and market conditions (including global commodity prices).

	·	the ability of management to execute its business plan, including their ability to secure new revenue contracts;

	·	health, safety and the environment (including risks related to the COVID-19 pandemic);

	·	the emergence of alternative competitive technologies;

	·	our ability to develop and commercialize the geothermal technology;

	·	our ability to service existing debt;

	·	our ability to protect and maintain our intellectual property (“IP”) and rights to our SFD® technology;

	·	our reliance on a limited number of key personnel;

	·	our reliance on a limited number of aircraft;

	·	our reliance on a limited number of clients;

	·	counterparty credit risk;

	·	foreign currency and interest rate fluctuations;

	·	the likelihood that the Company’s ICFR (as defined below) will prevent or detect material misstatements in our consolidated financial statements;

	·	changes in, or in the interpretation of, laws, regulations or policies; and

	·	general business, economic and market conditions (including global commodity prices).

	·	the Company completed the 2021 advisory services and funding of $50,000 from the National Research Council of Canada Industrial Research Assistance Program (“NRC IRAP”) to support the research and development of the SFD^® technology for geothermal applications;

	·	NXT announced that its patent application in India has been officially granted by the Office of the Controller General of Patents, Designs and Trade Marks.

	·	cash and short-term investments at December 31, 2021 were $2.81 million;

	·	Net working capital was $2.82 million at December 31, 2021;

	·	the Company recorded SFD^® related revenue of $3.13 million for YE-21 and (0.01) for Q4-21;

	·	a net loss of $1.57 million was recorded for Q4-21, including stock based compensation expense (“SBCE”) and amortization expense of $0.53 million;

	·	a net loss of $3.12 million was recorded for YE-21, including SBCE and amortization expense of $2.06 million;

	·	net loss per common share for Q4-21 was $0.02 basic and $0.02 diluted;

	·	net loss per common share for YE-21 was $0.05 basic and $0.05 diluted;

	·	cash flow provided by (used in) operating activities was $0.08 million during Q4-21 and ($1.03) million YE-21;

	·	general and administrative (“G&A”) expenses increased by $0.05 million (6%) as compared to Q4-20, due primarily to the ending of the Canada Emergency Wage Subsidy (“CEWS”), the Canada Emergency Rent Subsidy (“CERS”) programs; and

	·	G&A for YE-21 as compared to YE-20 decreased by $0.15 million (5%) due to lower professional fees, recognition of the CERS and business development offset by the ending of the CEWS and higher SBCE.

	·	the Company received US$0.20 million (CDN$0.25) of payments on outstanding accounts receivable during February 2022.

	·	the Company extended its aircraft lease until April 2024; and

	·	the Company received notice that its Brazilian Patent Application has been allowed, bringing the total number of countries in which NXT holds patents to 46.

($M except per share)	YE-21			YE-20			YE-19
				(Adjusted)			(Adjusted)
Total Assets	$	21,584,371		$	23,484,748		$	30,221,470
Lease liabilities		1,902,604			2,089,838			2,850,604
Long-term debt		1,000,000			-			-
Revenue		3,134,250			136,566			11,976,149
Net earnings (loss)		(3,123,799	)		(6,028,228	)		3,794,709
Net earnings (loss) per share
Basic	$	(0.05	)	$	(0.09	)	$	0.06
Diluted	$	(0.05	)	$	(0.09	)	$	0.06

	1.	US$40,000 (CAD$50,310) signature payment, which was paid in April 2021;

	2.	300,000 common shares in the capital of NXT (“Common Shares”), which were approved by the TSX and issued in December 2021;

	3.	CAD$15,000 signature milestone payment paid in August 2021;

	4.	US$200,000 milestone payment which will become due in the event that the Company’s cash balance exceeds CAD$5,000,000 due to receipt of funds from operations; and

	5.	US$250,000 milestone payment which will become due in the event that the Company executes and completes, and receives full payment for, an SFD^® contract valued at US$10,000,000 or greater, provided such contract is entered into and completed, and payment of at least US$5,000,000 is received, by April 18, 2023,

	·	fair market value of the Geothermal Right and fair market value of the Consideration, is approximately $837,947, if all of the milestones are met;

	·	market capitalization of the Company is approximately $44,579,810; and

	·	fair market value as a % of market capitalization is 1.88%.