Document and Entity Information
Document and Entity Information - shares | 12 Months Ended | |
Dec. 31, 2017 | Apr. 27, 2018 | |
Document And Entity Information | ||
Entity Registrant Name | NXT Energy Solutions Inc. | |
Entity Central Index Key | 1,009,922 | |
Document Type | 20-F | |
Document Period End Date | Dec. 31, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 62,832,843 | |
Document Fiscal Period Focus | FY | |
Document Fiscal Year Focus | 2,017 |
Consolidated Balance Sheets
Consolidated Balance Sheets - CAD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Current assets | ||
Cash and cash equivalents | $ 166,618 | $ 490,496 |
Short term investments | 950,000 | 1,453,091 |
Accounts receivable | 60,027 | 205,952 |
Prepaid expenses | 107,363 | 166,802 |
Total current assets | 1,284,008 | 2,316,341 |
Long term assets | ||
Deposits (Note 3) | 518,765 | |
Property and equipment (Note 4) | 778,685 | 3,348,557 |
Intellectual property (Note 5) | 21,339,533 | 23,024,268 |
Total assets | 23,920,991 | 28,689,166 |
Current liabilities | ||
Accounts payable and accrued liabilities (Note 6) | 1,562,394 | 575,964 |
Income taxes payable | 201 | 98 |
Current portion of capital lease obligation (Note 7) | 39,579 | 36,769 |
Net current liabilities | 1,602,174 | 612,831 |
Long-term liabilities | ||
Capital lease obligation (Note 7) | 85,118 | 124,697 |
Other liabilities (Note 19) | 517,669 | |
Asset retirement obligation (Note 8) | 56,702 | 55,240 |
Deferred charges (Note 15) | 81,919 | 84,838 |
Total long term liabilities | 741,408 | 264,775 |
Total liabilities | 2,343,582 | 877,606 |
Commitments and contingencies (Note 15) | ||
Subsequent events (Note 20) | ||
Shareholders' equity: | ||
Common shares (Note 9): - authorized unlimited Issued: Issued: 58,161,133 (2016 - 53,856,509) common shares | 88,121,286 | 85,966,393 |
Contributed capital | 8,195,075 | 7,613,719 |
Deficit | (75,449,886) | (66,479,488) |
Accumulated other comprehensive income | 710,934 | 10,935 |
Net Shareholders' equity | 21,577,409 | 27,811,560 |
Total Liabilities and Shareholders' equity | $ 23,920,991 | $ 28,689,166 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - shares | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Shareholders' equity: | ||||
Commonn shares issued | 58,161,133 | 53,856,509 | 53,306,109 | 44,958,843 |
Consolidated Statements of Inco
Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) - CAD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenue | |||
Survey revenue (Note 16) | $ 1,447,269 | $ 17,422,151 | |
Expense | |||
Survey costs, net (Note 17) | 1,289,429 | 1,157,185 | 5,095,691 |
General and administrative expenses | 4,960,961 | 5,645,459 | 5,049,690 |
Stock based compensation expense (Note 11) | 581,356 | 790,500 | 1,081,000 |
Amortization expense (Note 4) | 1,897,576 | 2,104,864 | 704,943 |
Total expense | 8,729,322 | 9,698,008 | 11,931,324 |
Other expense (income) | |||
Interest income, net | 4,485 | (17,254) | (13,910) |
Foreign exchange (gain) loss | 69,676 | 272,713 | (712,480) |
Intellectual Property and other expenses | 91,370 | 218,853 | 529,081 |
Total other expense (income) | 165,531 | 474,312 | (197,309) |
Income (Loss) before income taxes | (8,894,853) | (8,725,051) | 5,688,136 |
Income tax (recovery) expense (Note 13) | |||
Current | 75,545 | 374,511 | 1,970,908 |
Deferred | (6,823,000) | ||
Total income tax expense | 75,545 | 374,511 | (4,852,092) |
Net Income (loss) and comprehensive income (loss) | $ (8,970,398) | $ (9,099,562) | $ 10,540,228 |
Net Income (Loss) per share (Note 10) - Basic | $ (0.16) | $ (0.17) | $ 0.22 |
Net Income (Loss) per share (Note 10) - Diluted | $ (0.16) | $ (0.17) | $ 0.21 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - CAD ($) | Common Stock | Preferred Stock | Contributed Capital | Deficit | Accumulated Other Comprehensive Income | Total |
Beginning Balance, Amount at Dec. 31, 2014 | $ 65,792,307 | $ 232,600 | $ 6,400,789 | $ (67,920,154) | $ 710,935 | $ 35,621,651 |
Conversion of preferred shares and acquisition of intellectual property | 18,680,600 | |||||
Rights Offering | ||||||
Issued upon exercise of stock options (Note 9) | 335,946 | |||||
Transfer from contributed capital upon exercise of stock options | 242,700 | |||||
Equity-based transaction with non-employee | ||||||
Conversion to common shares | (232,600) | |||||
Recognition of stock based compensation expense | 1,081,000 | |||||
Contributed capital transferred to common shares upon exercise of stock options | (242,700) | |||||
Net loss and comprehensive loss for the year | 10,540,228 | 10,540,228 | ||||
Ending Balance, Amount at Dec. 31, 2015 | 85,051,553 | 7,239,089 | (57,379,926) | 710,935 | 35,621,651 | |
Conversion of preferred shares and acquisition of intellectual property | ||||||
Rights Offering | ||||||
Issued upon exercise of stock options (Note 9) | 498,970 | |||||
Transfer from contributed capital upon exercise of stock options | 415,870 | |||||
Equity-based transaction with non-employee | ||||||
Conversion to common shares | ||||||
Recognition of stock based compensation expense | 790,500 | |||||
Contributed capital transferred to common shares upon exercise of stock options | (415,869) | |||||
Net loss and comprehensive loss for the year | (9,099,562) | (9,099,562) | ||||
Ending Balance, Amount at Dec. 31, 2016 | 85,966,393 | 7,613,719 | (66,479,488) | 710,934 | 27,811,560 | |
Conversion of preferred shares and acquisition of intellectual property | ||||||
Rights Offering | 2,029,867 | |||||
Issued upon exercise of stock options (Note 9) | 35,995 | |||||
Transfer from contributed capital upon exercise of stock options | ||||||
Equity-based transaction with non-employee | 89,031 | |||||
Conversion to common shares | ||||||
Recognition of stock based compensation expense | 581,356 | |||||
Contributed capital transferred to common shares upon exercise of stock options | ||||||
Net loss and comprehensive loss for the year | (8,970,398) | (8,970,398) | ||||
Ending Balance, Amount at Dec. 31, 2017 | $ 88,121,286 | $ 8,195,075 | $ (75,449,886) | $ 710,934 | $ 21,577,409 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - CAD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash provided by (used in): Operating activities | |||
Comprehensive income (loss) for the year | $ (8,970,398) | $ (9,099,562) | $ 10,540,228 |
Items not affecting cash: | |||
Deferred income tax recovery | (6,823,000) | ||
Stock-based compensation expense | 581,356 | 790,500 | 1,081,000 |
Amortization expense | 1,897,576 | 2,104,864 | 704,943 |
Settlement of payable with shares | 95,181 | ||
Non-cash changes to asset retirement obligation | 2,283 | 4,000 | 1,800 |
Asset retirement obligations paid | (821) | (560) | |
Valuation allowance of Bolivian Tax Credits | 207,682 | ||
Amortization of deferred gain on sale of aircraft (Note 19) | (103,534) | ||
Other | (3,018) | (2,917) | 87,756 |
Change in non-cash working capital balances (Note 14) | 829,014 | (1,384,499) | 1,392,755 |
Total non-cash items | 3,505,719 | 1,511,948 | (3,555,306) |
Net cash from (used in) operating activities | (5,464,679) | (7,587,614) | 6,984,922 |
Cash provided by (used in) Financing activities | |||
Proceeds from exercise of stock options | 35,994 | 498,970 | 335,946 |
Net Proceeds from Rights Offering | 2,029,867 | ||
Cost of equity-based transaction with non-employee | (6,149) | ||
Repayment of capital lease obligation | (36,769) | (34,159) | (8,122) |
Net cash from financing activities | 2,022,943 | 464,811 | 327,824 |
Cash provided by (used in) Investing activities | |||
Proceeds from sale/(purchase) of property & equipment, net | 3,133,532 | (89,702) | (3,380,717) |
Decrease in short-term investments | 503,091 | 602,385 | 3,117,952 |
(Increase) in Deposits | (518,765) | ||
Decrease (increase) in restricted cash | 75,000 | (75,000) | |
Change in non-cash working capital balances (Note 14) | (60,187) | 60,187 | |
Net cash from (used in) investing activities | 3,117,858 | 527,496 | (277,578) |
Net increase (decrease) in cash and cash equivalents | (323,878) | (6,595,307) | 7,035,168 |
Cash and cash equivalents, beginning of the year | 490,496 | 7,085,803 | 50,635 |
Cash and cash equivalents, end of the year | 166,618 | 490,496 | 7,085,803 |
Supplemental information: | |||
Cash interest (received) | 4,487 | 16,057 | (15,134) |
Cash taxes paid | $ 72,587 | $ 1,634,360 | $ 717,782 |
The Company and future operatio
The Company and future operations | 12 Months Ended |
Dec. 31, 2017 | |
Notes to Financial Statements | |
1. The Company and future operations | NXT Energy Solutions Inc. (the Company or NXT) is a publicly traded company based in Calgary, Canada. NXTs proprietary Stress Field Detection (SFD®) technology is an airborne survey system that is used in the oil and natural gas exploration industry to identify subsurface trapped fluid accumulations. NXTs financial statements at December 31, 2016 included disclosure related to the use of the going concern basis of presentation. Various steps were taken in 2017 and the first quarter of 2018 (see notes 9, 19 and 20), which resulted in a significant strengthening of the Companys liquidity and working capital position. In the preparation of these financial statements management determined that there are no conditions or events that raise substantial doubt about the Companys ability to continue as a going concern. However, NXTs future financial results and its longer term success remain dependent upon the closing of the private placement financing (note 20) and the ability to continue to attract and execute client projects to build its revenue base. Subsequent to year end the Company has continued to implement cash flow reduction measures initiated in 2017; the most significant include the deferral of a portion of the employees cash compensation, and deferral of substantially all of the Board and Advisory Board members cash compensation. The Companys longer term success remains dependent upon its ability to execute successful contracts providing a revenue base sufficient to fund operating costs and general and administrative costs, and generate positive cash flow from operations. The occurrence and timing of these events cannot be predicted with certainty. The Company will be closely monitoring its going concern assessment in future periods to determine whether its current conclusions remain appropriate. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Notes to Financial Statements | |
2. Significant Accounting Policies | Basis of presentation These consolidated financial statements for the year ended December 31, 2017 have been prepared by management in accordance with generally accepted accounting principles of the United States of America (US GAAP) and by applying the same accounting policies and methods as used in preparing the consolidated financial statements for the fiscal year ended December 31, 2016. Consolidation These consolidated financial statements reflect the accounts of the Company and its wholly owned subsidiaries (all of which are inactive). All significant inter-company balances and transactions among NXT and its subsidiaries have been eliminated and are therefore not reflected in these consolidated financial statements. Estimates and Assumptions Estimates made relate primarily to the use of the going concern assumption, estimated useful lives and valuation of intellectual property and property and equipment, the measurement of stock-based compensation expense, valuation of deferred income tax assets, and estimates for asset retirement obligations. The estimates and assumptions used are based upon managements best estimate. 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. Cash and Cash Equivalents Cash and cash equivalents consist of cash on hand and short term GICs with an original maturity less than 90 days from the date of acquisition. Short Term Investments Short term investments consist of short term GICs, with original maturity dates greater than 90 days but less than one year. Revenue Recognition Revenues from SFD® survey contracts performed by NXT (net of any related foreign sales tax) are recognized using the completed contract method of revenue recognition. Substantial completion of the contract culminates with NXTs delivery to its clients of a final interpretation and recommendations report for the survey project. This method is viewed as appropriate as prior to that point, the raw SFD® survey data obtained by NXT cannot be interpreted or utilized in an independent, meaningful way by the client. Amounts received or invoiced in advance of completion of the contract are reflected as deferred revenue and classified as a current liability. At the end of each applicable quarterly fiscal period, all related survey expenditures and obligations (including sales commissions incurred) related to uncompleted contracts are reflected as work-in-progress and classified as current assets. Upon completion of the contract deliverables, unearned revenue and the related work-in-progress are reflected in the statement of income (loss) as either revenue or survey cost. Survey costs do not include staff and related overhead costs (which are included in general and administrative expense) or any amortization of property and equipment. Fair Value of Derivative Instruments Derivative Instruments Derivative instruments are recognized on the balance sheet at fair value with any changes in fair value between periods recognized in the determination of net income (loss) for the period. NXT does not apply hedge accounting to any of its derivatives. As at December 31, 2017 and 2016, NXT had no outstanding derivative instruments. Fair Value Measures For any balance sheet items recorded at fair value on a recurring basis or non-recurring basis, the Company is required to classify the fair value measure into one of three categories based on the fair value hierarchy noted below. In Level I, the fair value of assets and liabilities is determined by reference to quoted prices in active markets for identical assets and liabilities that the Company has the ability to assess at the measurement date. In Level II, determination of the fair value of assets and liabilities is based on the extrapolation of inputs, other than quoted prices included within Level I, for which all significant inputs are observable directly or indirectly. Such inputs include published exchange rates, interest rates, yield curves, and stock quotes from external data service providers. Transfers between Level I and Level II would occur when there is a change in market circumstances. In Level III, the fair value of assets and liabilities measured on a recurring basis is determined using a market approach based on inputs that are unobservable and significant to the overall fair value measurement. Assets and liabilities measured at fair value can fluctuate between Level II and Level III depending on the proportion of the value of the contract that extends beyond the time frame for which inputs are considered to be observable. As contracts near maturity and observable market data becomes available, the contracts are transferred out of Level III and into Level II. Deposits Deposits consist of security payments made to lessors for the Companys office and aircraft lease. They are classified as long term if the lease end date is greater than one year. Property and Equipment Property and equipment is recorded at cost, less accumulated amortization, which is recorded over the estimated service lives of the assets using the following annual rates and methods: Computer hardware (including survey equipment) 30% declining balance Computer software 100% declining balance Aircraft 10% declining balance Furniture and other equipment 20% declining balance Leasehold improvements 10% declining balance Impairment of long-lived assets The Company reviews long-lived assets, which includes property and equipment and intellectual property for impairment whenever events or changes in circumstances indicate the carrying value may not be recoverable. When indictors of impairment exist, the Company first compares the total of the estimated undiscounted future cash flows or the estimated sale price to the carrying value of an asset. If the carrying value exceeds these amounts, an impairment loss is recognized for the excess of the carrying value over the estimated fair value of the asset. Intellectual Property Intellectual property acquired is recorded at cost, less accumulated amortization, which is recorded over the estimated minimum useful life of the assets. Intellectual property is also subject to ongoing tests of potential impairment of the recorded net book value. Research and Development Expenditure Research and development (R&D) expenditures incurred to develop, improve and test the SFD® survey system and related components are expensed as incurred. Any intellectual property that is acquired for the purpose of enhancing research and development projects, if there is no alternative use for the intellectual property, is expensed in the period acquired. No significant external R&D was incurred in the years ended 2015, 2016 and 2017. Foreign Currency Translation The Companys functional currency is the Canadian dollar. Revenues and expenses denominated in foreign currencies are translated into Canadian dollars at the average exchange rate for the applicable period. Shareholders equity accounts are translated into Canadian dollars using the exchange rates in effect at the time of the transaction. Monetary assets and liabilities are translated into Canadian dollars at the exchange rate in effect at the end of the applicable period. Non-monetary assets and liabilities (including work-in-progress and deferred revenue balances) are recorded at the relevant exchange rates for the period in which the balances arose. Any related foreign exchange gains and losses resulting from these translations are included in the determination of net income (loss) for the period. Prior to 2010, NXT had active US subsidiaries which had the US dollar as their functional currency. Historic foreign currency translation adjustments related to the consolidation of these now inactive subsidiaries is the only component of accumulated other comprehensive income, which is a component of shareholders equity. Income Taxes NXT follows the asset and liability method of accounting for income taxes. This method recognizes deferred income tax assets and liabilities based on temporary differences in reported amounts for financial statement and income tax purposes, at the income tax rates expected to apply in the future periods when the temporary differences are expected to be reversed or realized. The effect of a change in income tax rates on deferred income tax assets and deferred income tax liabilities is recognized in income in the period when the tax rate change is enacted. Valuation allowances are provided when necessary to reduce deferred tax assets to the amount that is more likely than not to be realized. Stock based compensation expense NXT follows the fair value method of accounting for stock options that are granted to acquire common shares under NXTs stock option plan. Under this method, an estimate of the fair value of the cost of stock options that are granted to employees, directors and consultants is calculated using the Black-Scholes option pricing model and charged to income over the future vesting period of the stock options, with a corresponding increase recorded in contributed capital. Upon exercise of the stock options, the consideration received by NXT, and the related amount which was previously recorded in contributed capital, is recognized as an increase in the recorded value of the common shares of the Company. Stock based compensation expense related to stock options granted to non-employees is periodically re-measured until the earlier of the completion of their service period or when the vesting period is completed. Changes to the re-measured compensation are recognized in the period of change and amortized over the remaining life of the vesting period in the same manner as the original stock option. Income (loss) per share Basic income (loss) per share amounts are calculated by dividing net income (loss) by the weighted average number of common shares that are outstanding for the fiscal period. Shares issued during the period are weighted for the portion of the period that the shares were outstanding. Diluted income (loss) per share are computed using the treasury stock method, whereby the weighted average number of shares outstanding is increased to include any additional shares that would be issued from the assumed exercise of stock options and common share purchase warrants. The incremental number of shares added under the treasury stock method assumes that outstanding stock options and warrants that are exercisable at exercise prices below the Companys average market price (i.e. they were in-the-money) for the applicable fiscal period are exercised and then that number of incremental shares is reduced by the number of shares that could have been repurchased by the Company from the issuance proceeds, using the average market price of the Companys shares for the applicable fiscal period. No addition to the basic number of shares is made when calculating the diluted number of shares if the diluted per share amounts become anti-dilutive (such as occurs in the case where there is a net loss for the period). Future Accounting Policy Changes Revenue recognition In May 2014, the US Financial Accounting Standards Board (FASB) issued new guidance on accounting for Revenue from Contracts with Customers, which supersedes the current revenue recognition requirements and most industry-specific guidance. This new guidance will require that an entity recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. This new guidance will be effective from January 1, 2018, and early application is not permitted. There will be two methods in which the amendment can be applied: (1) retrospectively to each prior reporting period (which will include NXTs fiscal years 2016 and 2017) presented, or (2) retrospectively with the cumulative effect recognized at the date of initial application. As the Company has generated limited revenue over the past two years, the new standard is not anticipated to have a significant impact on periods prior to the adoption of the new standard. As the Company enters into new contracts with customers in future periods, it will evaluate the impact of the new standard on these contracts and will disclose the related revenue recognition implications at that time. Leases: In February 2016, the FASB issued new guidance on leases. The new guidance requires lessees to recognize most leases, including operating leases, on the balance sheet as lease assets and lease liabilities. In addition, lessees may be required to reassess assumptions associated with existing leases as well as to provide expanded qualitative and quantitative disclosures. The new guidance is effective January 1, 2019. NXT is evaluating the impact of the adoption of this new guidance and has not yet determined the effect on its consolidated financial statements. |
Deposits
Deposits | 12 Months Ended |
Dec. 31, 2017 | |
Notes to Financial Statements | |
3. Deposits | Security deposits have been made to the lessors of the office building and the aircraft. They are due to be repaid at the end of the respective lease terms (Building- 2025, Aircraft-2022) 2017 2016 Building $ 43,310 $ - Aircraft 475,455 - 518,765 - |
Property and equipment
Property and equipment | 12 Months Ended |
Dec. 31, 2017 | |
Notes to Financial Statements | |
4. Property and equipment | Cost Accumulated Net book Year ended December 31, 2017 Base amortization value Survey equipment $ 684,890 $ 612,717 $ 72,174 Aircraft (Note 19) - - - Computers and software 1,246,095 1,177,653 68,442 Furniture and other equipment 528,420 498,304 30,115 Leasehold improvements 1,165,108 557,154 607,953 3,624,513 2,845,828 778,685 Cost Accumulated Net book Year ended December 31, 2016 Base amortization value Survey equipment $ 680,518 $ 593,228 $ 87,290 Aircraft 2,734,611 287,277 2,447,334 Computers and software 1,241,740 1,140,956 100,784 Furniture and other equipment 528,420 490,775 37,645 Leasehold improvements 1,165,108 489,604 675,504 6,350,397 3,001,840 3,348,557 |
Intellectual property
Intellectual property | 12 Months Ended |
Dec. 31, 2017 | |
Notes to Financial Statements | |
5. Intellectual property | During 2015, NXT acquired the permanent rights to the SFD® technology for use in the exploration of hydrocarbons from Mr. George Liszicasz and recorded the acquisition as an intellectual property asset on the balance sheet. The asset was recorded at the fair value of the consideration transferred, including the related tax affect, of approximately $25.3 million. The asset is being amortized on a straight line basis over its estimated useful life of 15 years. The annual amortization expense expected to be recognized in each of the next five years is approximately $1.7 million per year for a 5 year aggregate total of $8.5 million. 2017 2016 Intellectual property acquired $ 25,271,000 $ 25,271,000 Accumulated amortization (3,931,467 ) (2,246,732 ) 21,339,533 23,024,268 |
Accounts payable and accrued li
Accounts payable and accrued liabilities | 12 Months Ended |
Dec. 31, 2017 | |
Notes to Financial Statements | |
6. Accounts payable and accrued liabilities | 2017 2016 Accrued liabilities related to: Consultants and professional fees $ 353,333 $ 107,387 Board of Directors' fees 175,000 - Survey and other projects - - Payroll (vacation pay and wages payable) 551,110 156,498 1,079,443 263,885 Trade payables and other 482,951 312,079 1,562,394 575,964 |
Capital lease obligation
Capital lease obligation | 12 Months Ended |
Dec. 31, 2017 | |
Notes to Financial Statements | |
7. Capital lease obligation | 2017 2016 Capital lease obligation $ 124,697 $ 161,466 Less current portion (39,579 ) (36,769 ) 85,118 124,697 The capital lease obligation is secured by specific leasehold improvements included in property and equipment, bears interest at a rate of 7.4%, and is repayable as follows: Year ended December 31: 2018 $ 39,579 2019 42,603 2020 42,515 $ 124,697 |
Asset retirement obligation
Asset retirement obligation | 12 Months Ended |
Dec. 31, 2017 | |
Notes to Financial Statements | |
8. Asset retirement obligation | Asset retirement obligations (ARO) relate 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 Companys obligation relates to its interests in 6 gross (1.2 net) wells. The estimated future abandonment liability is approximately $59,000 which is based on estimates of the future timing and costs to abandon, remediate and reclaim the well sites within the next five years. The net present value of the ARO is as noted below, and has been calculated using an inflation rate of 2.0% and discounted using a credit-adjusted risk-free interest rate of 1.6%. 2017 2016 2015 ARO balance, beginning of the year $ 55,240 $ 51,240 $ 50,000 Accretion expense 2,283 4,000 1,800 Costs incurred (821 ) - (560 ) Change in ARO estimates - - - ARO balance, end of the year 56,702 55,240 51,240 |
Common shares
Common shares | 12 Months Ended |
Dec. 31, 2017 | |
Notes to Financial Statements | |
9. Common shares | The Company is authorized to issue an unlimited number of common shares, of which the following are issued and outstanding: As at the Year Ended December 31, 2017 December 31, 2016 # of shares $ amount # of shares $ amount As at the beginning of the year 53,856,509 $ 85,966,393 53,306,109 $ 85,051,553 Shares issued during the year: Exercise of stock options 7,334 5,710 565,722 498,970 Rights Offering, net of issue costs (see i) 4,187,290 2,029,867 Stock options proceeds receivable - 30,285 - (30,285 ) Shares for Debt 110,000 89,031 - - Transfer from contributed capital on the exercise of stock options (see ii) - - - 415,870 Return to Treasury of exercised stock options - - (15,322 ) - As at the end of the year 58,161,133 88,121,286 53,856,509 85,966,393 As at the Year Ended December 31, 2015 # of shares $ amount As at the beginning of the year 44,958,843 $ 65,792,307 Shares issued during the year: Exercise of stock options 347,266 335,946 Conversion of preferred shares (note 5) 8,000,000 232,600 Stock options proceeds receivable - - Value assigned to acquisition of Intellectual property - 18,448,000 Transfer from contributed capital on the exercise of stock options - 242,700 Return to Treasury of exercised stock options - - As at the end of the year 53,306,109 85,051,553 i) On November 3 rd th Approximately 53% of the Offering, being 2,237,607 shares were issued in the basic subscription, of which 680,856 shares were issued to insiders of the Company and 1,556,751 shares were issued to others. A total of 1,949,683 shares were applied for under the additional subscription provision, all of which were issued to non-insiders representing 47% of the Offering. ii) During 2017, the Company settled certain accounts payable to a consultant totaling $78,980 by way of issuing 110,000 common shares at a price per share of $.718. The cost of issuing these shares of $6,149 were recorded as a reduction to share capital. Also at December 31, 2016 a reduction of $16,200 in the common share capital balance was made in respect of shares that had been repurchased by the Company and held in trust. These shares were issued to the Consultant in lieu of fees that were incurred in 2017. |
Net Income (loss) per share
Net Income (loss) per share | 12 Months Ended |
Dec. 31, 2017 | |
Notes to Financial Statements | |
10. Net Income (loss) per share | 2017 2016 2015 Comprehensive Income/(loss) for the year $ (8,970,398 ) $ (9,099,562 ) $ 10,540,228 Weighted average number of shares outstanding for the year: Basic 54,523,113 53,526,155 47,782,647 Additional shares related to assumed Exercise of Stock options under the Treasury stock method (see (i)) - - 1,258,736 Diluted 54,523,113 53,526,155 49,041,383 Net Income (loss) per share Basic $ (0.16 ) $ (0.17 ) $ 0.22 Net Income (loss) per share Diluted $ (0.16 ) $ (0.17 ) $ 0.21 (i) In periods in which a loss results, all outstanding stock options are excluded from the fully diluted loss per share calculations as their effect is anti-dilutive. |
Stock options
Stock options | 12 Months Ended |
Dec. 31, 2017 | |
Notes to Financial Statements | |
11. Stock options | The following is a summary of stock options which are outstanding as at December 31, 2017: Average remaining Exercise price # of options # of options contractual per share outstanding exercisable life (in years) $ 0.76 36,667 36,667 0.2 $ 0.86 22,500 22,500 0.5 $ 1.35 546,900 388,767 2.0 $ 1.39 22,500 22,500 1.5 $ 1.45 37,500 37,500 4.0 $ 1.48 37,500 37,500 3.5 $ 1.50 100,000 66,667 3.7 $ 1.55 40,000 40,000 1.2 $ 1.57 30,000 20,000 2.1 $ 1.61 25,000 25,000 1.1 $ 1.67 150,000 150,000 1.9 $ 1.73 92,600 75,933 2.9 $ 1.82 185,000 123,333 2.8 $ 1.83 22,500 22,500 2.7 $ 2.10 300,000 200,000 2.7 $ 1.60 1,648,667 1,268,867 2.34 A continuity of the number of stock options which are outstanding at the end of the current period and as at the prior fiscal year ended December 31, 2017 is as follows: For the year ended For the year ended December 31, 2017 December 31, 2016 weighted weighted # of stock average # of stock average options exercise price options exercise price Options outstanding, start of the period 3,221,001 $ 1.33 3,462,835 $ 1.26 Granted - - 475,000 $ 1.50 Exercised (7,334 ) $ 0.76 (565,722 ) - Expired (1,190,000 ) $ 0.91 - - Forfeited (375,000 ) $ 1.48 (151,112 ) $ 1.50 Options outstanding, end of the period 1,648,667 $ 1.60 3,221,001 $ 1.33 Options exercisable, end of the period 1,268,867 $ 1.59 2,036,401 $ 1.17 Stock options granted generally expire, if unexercised, five years from the date granted and entitlement to exercise them generally vests at a rate of one-third at the end of each of the first three years following the date of grant. Stock based compensation expense (SBCE) is calculated based on the fair value attributed to grants of stock options using the Black-Scholes valuation model and utilizing the following weighted average assumptions: Year ended December 31 2017 2016 2015 Expected dividends paid per common share Nil Nil Nil Expected life in years 5.0 5.0 4.9 Expected volatility in the price of common shares 85 % 85 % 105 % Risk free interest rate 0.75 % 0.75 % 1.0 % Weighted average fair market value per share at grant date $ 0.99 $ 0.99 $ 1.28 Intrinsic (or "in-the-money") value per share of options exercised $ 0.45 $ 0.45 $ 1.40 The unamortized portion of SBCE related to the non-vested portion of stock options, all of which will be recognized in 2018 is approximately $176,000. |
Financial instruments
Financial instruments | 12 Months Ended |
Dec. 31, 2017 | |
Notes to Financial Statements | |
12. Financial instruments | 1) Non-derivative financial instruments: The Companys non-derivative financial instruments consist of cash and cash equivalents, short-term investments, accounts receivable, and accounts payables and accrued liabilities. The carrying value of these financial instruments approximates their fair values due to their short terms to maturity. NXT is not exposed to significant interest or credit risks arising from these financial instruments. NXT is exposed to foreign exchange risk as a result of periodically holding foreign denominated financial instruments. Any unrealized foreign exchange gains and losses arising on such holdings are reflected in earnings at the end of each period. 2) Derivative financial instruments As at December 31, 2017, 2016 and 2015 the Company held no derivative financial instruments |
Income tax expense
Income tax expense | 12 Months Ended |
Dec. 31, 2017 | |
Notes to Financial Statements | |
13. Income tax expense | NXT periodically earns revenues while operating outside of Canada in foreign jurisdictions. Payments made to NXT for services rendered to clients and branch offices in certain countries may be subject to foreign income and withholding taxes. Such taxes incurred are only recoverable in certain limited circumstances, including potential utilization in Canada as a foreign tax credit, or against future taxable earnings from the foreign jurisdictions. For the year ended December 31, 2017 NXT recorded foreign income and withholding taxes of $75,545 (2016 - $159,990) on a portion of its revenues generated on the Bolivian project, including withholding taxes incurred on certain charges to the Bolivian branch office. Income tax expense is different from the expected amount that would be computed by applying the statutory Canadian federal and provincial income tax rates to NXTs income (loss) before income taxes as follows: 2017 2016 2015 Net income (loss) before income taxes $ (8,894,853 ) $ (8,725,051 ) $ 5,688,136 Canadian statutory income tax rate 27.0 % 27.0 % 26.0 % Income tax (recovery) at statutory income tax rate (2,401,610 ) (2,355,764 ) 1,478,915 Effect of non- deductible expenses and other items: Stock-based compensation and other expenses 156,966 223,463 407,593 Change in statutory tax rates 962,486 - (511,508 ) Foreign exchange adjustments 110,121 112,581 (489,665 ) Foreign tax credit benefit - (256,500 ) (1,755,678 ) Non-taxable portion of capital gain (50,525 ) - - Other 91,668 (271,676 ) (318,664 ) (1,130,894 ) (2,547,896 ) (1,189,007 ) Change in valuation allowance 1,130,894 2,547,896 (5,633,993 ) - - (6,823,000 ) Income taxes in foreign jurisdictions 75,545 374,511 1,970,908 Income tax expense (recovery) 75,545 374,511 (4,852,092 ) On December 22, 2017 The Tax Cuts and Jobs Act (the Act) was enacted in the United States. This has resulted in a decrease in the US Federal tax rate from 35% to 21%. A valuation allowance has been provided for the potential financial statement value of the Companys deferred income tax assets, due to uncertainty regarding the amount and timing of their potential future utilization, as follows: 2017 2016 2015 Net operating losses carried forward: Canada (expiration dates 2027 to 2038) $ 8,180,209 $ 6,747,506 $ 5,100,905 USA (expiration dates 2020 to 2026) 1,443,729 2,575,389 2,654,605 Timing differences on property & equipment and financing costs 2,012,709 1,789,311 1,850,228 SRED Expenditures 215,303 215,303 - Foreign Tax Credit 371,133 371,133 - 12,223,083 11,059,946 9,605,738 Intellectual property (5,761,674 ) (6,216,552 ) (6,671,544 ) 6,461,409 5,482,090 2,934,194 Less valuation allowance (6,461,409 ) (5,482,090 ) (2,934,194 ) - - - |
Change in non-cash working capi
Change in non-cash working capital | 12 Months Ended |
Dec. 31, 2017 | |
Notes to Financial Statements | |
14. Change in non-cash working capital | The changes in non-cash working capital balances are comprised of: For the year ended December 31 2017 2016 2015 Accounts receivable $ (61,657 ) $ 604,448 $ (561,470 ) Work-in-progress - 404,840 (404,840 ) Prepaid expenses and deposits 59,439 93,595 78,247 Accounts payable and accrued liabilities 986,430 (587,819 ) 381,157 Income taxes payable 103 (1,253,028 ) 1,253,126 Deferred gain (155,301 ) - - Deferred revenue - (706,722 ) 706,722 829,014 (1,444,686 ) 1,452,942 Portion attributable to: Operating activities 829,014 (1,384,499 ) 1,392,755 Financing activities - - - Investing activities - (60,187 ) 60,187 829,014 (1,444,686 ) 1,452,942 |
Commitments and contingencies
Commitments and contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Notes to Financial Statements | |
15. Commitments and contingencies | Aircraft and Office premises lease NXT has an operating lease commitment on its Calgary office space for a 10 year term ending in 2025 at an initial estimated minimum monthly lease payment of $44,624 (including operating costs). The leaseback of NXTs aircraft is an operating lease with a minimum term of 60 months and monthly lease payments of approximately US$40,000. The estimated future minimum annual commitments for these leases are as follows as at December 31, 2017: Fiscal year ending December 31 Office Premises Aircraft 2018 $ 551,553 $ 594,633 2019 551,553 594,633 2020 554,526 594,633 2021 563,450 594,633 2022 563,450 148,658 2,784,532 2,527,190 Thereafter, 2023 through 2025 1,549,487 - 4,334,019 2,527,190 Deferred charges of $81,919 as at December 31, 2017 relates to the valuation of an initial free-rent period received on this lease in 2015. This balance will be amortized as a reduction of general and administrative expense over the remaining 8 year term of the lease commitment. |
Geographic information
Geographic information | 12 Months Ended |
Dec. 31, 2017 | |
Notes to Financial Statements | |
16. Geographic information | 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. NXT has no long term assets outside of Canada. Revenues in 2015 and 2016 were derived almost entirely from a single client in each of the periods. Revenues were derived by geographic area as follows: 2017 2016 2015 South and Central America (Bolivia, Belize) $ - $ 1,447,269 $ 17,422,151 North America - - - - 17,422,151 3,913,367 |
Survey Expenses
Survey Expenses | 12 Months Ended |
Dec. 31, 2017 | |
Notes to Financial Statements | |
17. Survey Expenses | Survey Expenses include the following: 2017 2016 2015 Aircraft Operations Charter Hire Revenue Earned (470,982 ) (564,505 ) - Lease payments 304,410 - - Operating Expenses 1,084,432 1,185,359 - 917,860 620,854 - Survey Projects 371,569 536,331 5,095,691 1,289,429 1,157,185 5,095,691 |
Other related party transaction
Other related party transactions | 12 Months Ended |
Dec. 31, 2017 | |
Notes to Financial Statements | |
18. Other related party transactions | One of the members of NXTs Board of Directors is a partner in a law firm which provides legal advice to NXT. Legal fees (including costs related to share issuance) incurred with this firm were as follows: 2017 2016 2015 $ 172,199 $ 62,645 $ 100,598 Accounts payable and accrued liabilities includes a total of $120,479 ($10,443 as at December 31, 2016) payable to this law firm. In addition, accounts payable and accrued liabilities includes $14,210 ($46 as at December 31, 2016) related to re-imbursement of expenses owing a person who is an Officer of NXT. |
Aircraft Financing
Aircraft Financing | 12 Months Ended |
Dec. 31, 2017 | |
Notes to Financial Statements | |
19. Aircraft Financing | In April, 2017, NXT completed a sale and leaseback agreement of its aircraft with a Calgary based international aircraft services organization (the Lessor). The terms of the agreement resulted in NXT selling its Cessna Citation aircraft that was purchased in 2015 for US$2,000,000 for the sum of US$2,300,000. NXT has leased the aircraft over an initial term of 60 months and retains all existing operating rights and obligations. Net proceeds to NXT from the sale were approximately CAD $2,700,000, after payment of all commissions and fees. The net book value of the asset of $2.4 million was derecognized and the resulting gain on disposition of $776,504 was deferred ($621,203 included in long term liabilities and $155,301 included in accounts payable and accrued liabilities). The gain will be recognized as a reduction to the Companys lease expense over the 60 month term of the lease. The resulting leaseback transaction is an operating lease. NXT is required to make monthly payments to the Lessor of approximately US $39,500. NXT has the option to extend the term of the lease by an additional two years. Should NXT want to repurchase the aircraft at the end of the initial lease term, the purchase price is US $1.45 million. |
Subsequent Event _ Private Plac
Subsequent Event – Private Placement | 12 Months Ended |
Dec. 31, 2017 | |
Notes to Financial Statements | |
20. Subsequent Event – Private Placement | On February 16, 2018 the Company entered into an agreement to complete a three-tranche Private Placement under which the Subscriber has committed to purchase 10,905,212 Units at a price of $0.924 per Unit for total gross proceeds of approximately $10,076,416. Each Unit consists of one Common Share and one-third of one Warrant. Each Warrant entitles the holder to acquire one Warrant Share at an exercise price of $1.20 for twelve (12) months from closing of the first tranche of the Private Placement. Closing of First Tranche of Private Placement The first tranche of the Private Placement was completed on February 16, 2018 and the Company received $4,310,500 in connection with the issuance of 4,665,043 Units. Additional Tranches of Private Placement Closing of the second tranche of 5,538,203 Units for gross proceeds of approximately $5,117,300, is expected to occur early in the second quarter of 2018. The Company received the necessary TSX clearance of Personal Information Forms submitted by certain principals of the Subscriber in late March 2018 and has commenced the process of closing this tranche. No shareholder approval is required to close the second tranche of the financing. Following the completion of the second tranche of the Private Placement, closing of the third tranche of the Private Placement, consisting of issuance of 701,965 Units for gross proceeds of approximately $648,616, will cause the Subscriber to be deemed a Control Person of the Company under applicable securities laws and is subject to approval by the shareholders of the Company (other than the Subscriber and its associates or affiliates) on or before May 17, 2018. Other Material Agreements In conjunction with closing the second tranche, the Company and the Subscriber have agreed to enter into an Investor Rights Agreement pursuant to which: (a) the Subscriber will have the right to nominate one director for election to the board of directors of the Company (subject to maintaining any equity ownership of at least 10% in the Company); (b) the Subscriber will be entitled to participate in future equity or convertible security offerings of the Company in order to maintain its pro rata equity interest in the Company (subject to maintaining any equity ownership of at least 10% in the Company); (c) the Subscriber will be entitled to a similar equity offering participation right in connection with certain new entities that may be created by the Company to expand the application of its proprietary technologies; and (d) the Subscriber has agreed to a 18 month standstill from the closing date of the second tranche of the Private Placement and a 12 month restriction on dispositions of 75% of the securities acquired in the Private Placement. |
Significant Accounting Polici27
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Significant Accounting Policies Policies | |
Basis of presentation | These consolidated financial statements for the year ended December 31, 2017 have been prepared by management in accordance with generally accepted accounting principles of the United States of America (US GAAP) and by applying the same accounting policies and methods as used in preparing the consolidated financial statements for the fiscal year ended December 31, 2016. |
Consolidation | These consolidated financial statements reflect the accounts of the Company and its wholly owned subsidiaries (all of which are inactive). All significant inter-company balances and transactions among NXT and its subsidiaries have been eliminated and are therefore not reflected in these consolidated financial statements. |
Estimates and Assumptions | Estimates made relate primarily to the use of the going concern assumption, estimated useful lives and valuation of intellectual property and property and equipment, the measurement of stock-based compensation expense, valuation of deferred income tax assets, and estimates for asset retirement obligations. The estimates and assumptions used are based upon managements best estimate. 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. |
Cash and Cash Equivalents | Cash and cash equivalents consist of cash on hand and short term GICs with an original maturity less than 90 days from the date of acquisition. |
Short Term Investments | Short term investments consist of short term GICs, with original maturity dates greater than 90 days but less than one year. |
Revenue Recognition | Revenues from SFD® survey contracts performed by NXT (net of any related foreign sales tax) are recognized using the completed contract method of revenue recognition. Substantial completion of the contract culminates with NXTs delivery to its clients of a final interpretation and recommendations report for the survey project. This method is viewed as appropriate as prior to that point, the raw SFD® survey data obtained by NXT cannot be interpreted or utilized in an independent, meaningful way by the client. Amounts received or invoiced in advance of completion of the contract are reflected as deferred revenue and classified as a current liability. At the end of each applicable quarterly fiscal period, all related survey expenditures and obligations (including sales commissions incurred) related to uncompleted contracts are reflected as work-in-progress and classified as current assets. Upon completion of the contract deliverables, unearned revenue and the related work-in-progress are reflected in the statement of income (loss) as either revenue or survey cost. Survey costs do not include staff and related overhead costs (which are included in general and administrative expense) or any amortization of property and equipment. |
Fair Value of Derivative Instruments | Derivative Instruments Derivative instruments are recognized on the balance sheet at fair value with any changes in fair value between periods recognized in the determination of net income (loss) for the period. NXT does not apply hedge accounting to any of its derivatives. As at December 31, 2017 and 2016, NXT had no outstanding derivative instruments. Fair Value Measures For any balance sheet items recorded at fair value on a recurring basis or non-recurring basis, the Company is required to classify the fair value measure into one of three categories based on the fair value hierarchy noted below. In Level I, the fair value of assets and liabilities is determined by reference to quoted prices in active markets for identical assets and liabilities that the Company has the ability to assess at the measurement date. In Level II, determination of the fair value of assets and liabilities is based on the extrapolation of inputs, other than quoted prices included within Level I, for which all significant inputs are observable directly or indirectly. Such inputs include published exchange rates, interest rates, yield curves, and stock quotes from external data service providers. Transfers between Level I and Level II would occur when there is a change in market circumstances. In Level III, the fair value of assets and liabilities measured on a recurring basis is determined using a market approach based on inputs that are unobservable and significant to the overall fair value measurement. Assets and liabilities measured at fair value can fluctuate between Level II and Level III depending on the proportion of the value of the contract that extends beyond the time frame for which inputs are considered to be observable. As contracts near maturity and observable market data becomes available, the contracts are transferred out of Level III and into Level II. |
Deposits | Deposits consist of security payments made to lessors for the Companys office and aircraft lease. They are classified as long term if the lease end date is greater than one year. |
Property and Equipment | Property and equipment is recorded at cost, less accumulated amortization, which is recorded over the estimated service lives of the assets using the following annual rates and methods: Computer hardware (including survey equipment) 30% declining balance Computer software 100% declining balance Aircraft 10% declining balance Furniture and other equipment 20% declining balance Leasehold improvements 10% declining balance |
Impairment of long-lived assets | The Company reviews long-lived assets, which includes property and equipment and intellectual property for impairment whenever events or changes in circumstances indicate the carrying value may not be recoverable. When indictors of impairment exist, the Company first compares the total of the estimated undiscounted future cash flows or the estimated sale price to the carrying value of an asset. If the carrying value exceeds these amounts, an impairment loss is recognized for the excess of the carrying value over the estimated fair value of the asset. |
Intellectual Property | Intellectual property acquired is recorded at cost, less accumulated amortization, which is recorded over the estimated minimum useful life of the assets. Intellectual property is also subject to ongoing tests of potential impairment of the recorded net book value. |
Research and Development Expenditure | Research and development (R&D) expenditures incurred to develop, improve and test the SFD® survey system and related components are expensed as incurred. Any intellectual property that is acquired for the purpose of enhancing research and development projects, if there is no alternative use for the intellectual property, is expensed in the period acquired. No significant external R&D was incurred in the years ended 2015, 2016 and 2017. |
Foreign Currency Translation | The Companys functional currency is the Canadian dollar. Revenues and expenses denominated in foreign currencies are translated into Canadian dollars at the average exchange rate for the applicable period. Shareholders equity accounts are translated into Canadian dollars using the exchange rates in effect at the time of the transaction. Monetary assets and liabilities are translated into Canadian dollars at the exchange rate in effect at the end of the applicable period. Non-monetary assets and liabilities (including work-in-progress and deferred revenue balances) are recorded at the relevant exchange rates for the period in which the balances arose. Any related foreign exchange gains and losses resulting from these translations are included in the determination of net income (loss) for the period. Prior to 2010, NXT had active US subsidiaries which had the US dollar as their functional currency. Historic foreign currency translation adjustments related to the consolidation of these now inactive subsidiaries is the only component of accumulated other comprehensive income, which is a component of shareholders equity. |
Income Taxes | NXT follows the asset and liability method of accounting for income taxes. This method recognizes deferred income tax assets and liabilities based on temporary differences in reported amounts for financial statement and income tax purposes, at the income tax rates expected to apply in the future periods when the temporary differences are expected to be reversed or realized. The effect of a change in income tax rates on deferred income tax assets and deferred income tax liabilities is recognized in income in the period when the tax rate change is enacted. Valuation allowances are provided when necessary to reduce deferred tax assets to the amount that is more likely than not to be realized. |
Stock based compensation expense | NXT follows the fair value method of accounting for stock options that are granted to acquire common shares under NXTs stock option plan. Under this method, an estimate of the fair value of the cost of stock options that are granted to employees, directors and consultants is calculated using the Black-Scholes option pricing model and charged to income over the future vesting period of the stock options, with a corresponding increase recorded in contributed capital. Upon exercise of the stock options, the consideration received by NXT, and the related amount which was previously recorded in contributed capital, is recognized as an increase in the recorded value of the common shares of the Company. Stock based compensation expense related to stock options granted to non-employees is periodically re-measured until the earlier of the completion of their service period or when the vesting period is completed. Changes to the re-measured compensation are recognized in the period of change and amortized over the remaining life of the vesting period in the same manner as the original stock option. |
Income (loss) per share | Basic income (loss) per share amounts are calculated by dividing net income (loss) by the weighted average number of common shares that are outstanding for the fiscal period. Shares issued during the period are weighted for the portion of the period that the shares were outstanding. Diluted income (loss) per share are computed using the treasury stock method, whereby the weighted average number of shares outstanding is increased to include any additional shares that would be issued from the assumed exercise of stock options and common share purchase warrants. The incremental number of shares added under the treasury stock method assumes that outstanding stock options and warrants that are exercisable at exercise prices below the Companys average market price (i.e. they were in-the-money) for the applicable fiscal period are exercised and then that number of incremental shares is reduced by the number of shares that could have been repurchased by the Company from the issuance proceeds, using the average market price of the Companys shares for the applicable fiscal period. No addition to the basic number of shares is made when calculating the diluted number of shares if the diluted per share amounts become anti-dilutive (such as occurs in the case where there is a net loss for the period). |
Future Accounting Policy Changes | Revenue recognition In May 2014, the US Financial Accounting Standards Board (FASB) issued new guidance on accounting for Revenue from Contracts with Customers, which supersedes the current revenue recognition requirements and most industry-specific guidance. This new guidance will require that an entity recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. This new guidance will be effective from January 1, 2018, and early application is not permitted. There will be two methods in which the amendment can be applied: (1) retrospectively to each prior reporting period (which will include NXTs fiscal years 2016 and 2017) presented, or (2) retrospectively with the cumulative effect recognized at the date of initial application. As the Company has generated limited revenue over the past two years, the new standard is not anticipated to have a significant impact on periods prior to the adoption of the new standard. As the Company enters into new contracts with customers in future periods, it will evaluate the impact of the new standard on these contracts and will disclose the related revenue recognition implications at that time. Leases: In February 2016, the FASB issued new guidance on leases. The new guidance requires lessees to recognize most leases, including operating leases, on the balance sheet as lease assets and lease liabilities. In addition, lessees may be required to reassess assumptions associated with existing leases as well as to provide expanded qualitative and quantitative disclosures. The new guidance is effective January 1, 2019. NXT is evaluating the impact of the adoption of this new guidance and has not yet determined the effect on its consolidated financial statements. |
Significant Accounting Polici28
Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Significant Accounting Policies Tables | |
Property and equipment is recorded at cost | Property and equipment is recorded at cost, less accumulated amortization, which is recorded over the estimated service lives of the assets using the following annual rates and methods: Computer hardware (including survey equipment) 30% declining balance Computer software 100% declining balance Aircraft 10% declining balance Furniture and other equipment 20% declining balance Leasehold improvements 10% declining balance |
Deposits (Tables)
Deposits (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Deposits Tables | |
Schedule of lease terms | 2017 2016 Building $ 43,310 $ - Aircraft 475,455 - 518,765 - |
Property and equipment (Tables)
Property and equipment (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property And Equipment Tables | |
Property and equipment | Cost Accumulated Net book Year ended December 31, 2017 Base amortization value Survey equipment $ 684,890 $ 612,717 $ 72,174 Aircraft (Note 19) - - - Computers and software 1,246,095 1,177,653 68,442 Furniture and other equipment 528,420 498,304 30,115 Leasehold improvements 1,165,108 557,154 607,953 3,624,513 2,845,828 778,685 Cost Accumulated Net book Year ended December 31, 2016 Base amortization value Survey equipment $ 680,518 $ 593,228 $ 87,290 Aircraft 2,734,611 287,277 2,447,334 Computers and software 1,241,740 1,140,956 100,784 Furniture and other equipment 528,420 490,775 37,645 Leasehold improvements 1,165,108 489,604 675,504 6,350,397 3,001,840 3,348,557 |
Intellectual property (Tables)
Intellectual property (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Intellectual Property Tables | |
Intellectual property | 2017 2016 Intellectual property acquired $ 25,271,000 $ 25,271,000 Accumulated amortization (3,931,467 ) (2,246,732 ) 21,339,533 23,024,268 |
Accounts payable and accrued 32
Accounts payable and accrued liabilities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accounts Payable And Accrued Liabilities Tables | |
Accounts payable and accrued liabilities | 2017 2016 Accrued liabilities related to: Consultants and professional fees $ 353,333 $ 107,387 Board of Directors' fees 175,000 - Survey and other projects - - Payroll (vacation pay and wages payable) 551,110 156,498 1,079,443 263,885 Trade payables and other 482,951 312,079 1,562,394 575,964 |
Capital lease obligation (Table
Capital lease obligation (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Capital Lease Obligation Tables | |
Capital lease obligation | 2017 2016 Capital lease obligation $ 124,697 $ 161,466 Less current portion (39,579 ) (36,769 ) 85,118 124,697 Year ended December 31: 2018 $ 39,579 2019 42,603 2020 42,515 $ 124,697 |
Asset retirement obligation (Ta
Asset retirement obligation (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Asset Retirement Obligation Tables | |
Net present value of the ARO | 2017 2016 2015 ARO balance, beginning of the year $ 55,240 $ 51,240 $ 50,000 Accretion expense 2,283 4,000 1,800 Costs incurred (821 ) - (560 ) Change in ARO estimates - - - ARO balance, end of the year 56,702 55,240 51,240 |
Common shares (Tables)
Common shares (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Common Shares Tables | |
Common shares | The Company is authorized to issue an unlimited number of common shares, of which the following are issued and outstanding: As at the Year Ended December 31, 2017 December 31, 2016 # of shares $ amount # of shares $ amount As at the beginning of the year 53,856,509 $ 85,966,393 53,306,109 $ 85,051,553 Shares issued during the year: Exercise of stock options 7,334 5,710 565,722 498,970 Rights Offering, net of issue costs (see i) 4,187,290 2,029,867 Stock options proceeds receivable - 30,285 - (30,285 ) Shares for Debt 110,000 89,031 - - Transfer from contributed capital on the exercise of stock options (see ii) - - - 415,870 Return to Treasury of exercised stock options - - (15,322 ) - As at the end of the year 58,161,133 88,121,286 53,856,509 85,966,393 As at the Year Ended December 31, 2015 # of shares $ amount As at the beginning of the year 44,958,843 $ 65,792,307 Shares issued during the year: Exercise of stock options 347,266 335,946 Conversion of preferred shares (note 5) 8,000,000 232,600 Stock options proceeds receivable - - Value assigned to acquisition of Intellectual property - 18,448,000 Transfer from contributed capital on the exercise of stock options - 242,700 Return to Treasury of exercised stock options - - As at the end of the year 53,306,109 85,051,553 |
Net Income (loss) per share (Ta
Net Income (loss) per share (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Net Income Loss Per Share Tables | |
Net Income (loss) per share | 2017 2016 2015 Comprehensive Income/(loss) for the year $ (8,970,398 ) $ (9,099,562 ) $ 10,540,228 Weighted average number of shares outstanding for the year: Basic 54,523,113 53,526,155 47,782,647 Additional shares related to assumed Exercise of Stock options under the Treasury stock method (see (i)) - - 1,258,736 Diluted 54,523,113 53,526,155 49,041,383 Net Income (loss) per share Basic $ (0.16 ) $ (0.17 ) $ 0.22 Net Income (loss) per share Diluted $ (0.16 ) $ (0.17 ) $ 0.21 |
Stock options (Tables)
Stock options (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Stock Options Tables | |
Summary of stock options | Average remaining Exercise price # of options # of options contractual per share outstanding exercisable life (in years) $ 0.76 36,667 36,667 0.2 $ 0.86 22,500 22,500 0.5 $ 1.35 546,900 388,767 2.0 $ 1.39 22,500 22,500 1.5 $ 1.45 37,500 37,500 4.0 $ 1.48 37,500 37,500 3.5 $ 1.50 100,000 66,667 3.7 $ 1.55 40,000 40,000 1.2 $ 1.57 30,000 20,000 2.1 $ 1.61 25,000 25,000 1.1 $ 1.67 150,000 150,000 1.9 $ 1.73 92,600 75,933 2.9 $ 1.82 185,000 123,333 2.8 $ 1.83 22,500 22,500 2.7 $ 2.10 300,000 200,000 2.7 $ 1.60 1,648,667 1,268,867 2.34 |
Number of stock options outstanding | For the year ended For the year ended December 31, 2017 December 31, 2016 weighted weighted # of stock average # of stock average options exercise price options exercise price Options outstanding, start of the period 3,221,001 $ 1.33 3,462,835 $ 1.26 Granted - - 475,000 $ 1.50 Exercised (7,334 ) $ 0.76 (565,722 ) - Expired (1,190,000 ) $ 0.91 - - Forfeited (375,000 ) $ 1.48 (151,112 ) $ 1.50 Options outstanding, end of the period 1,648,667 $ 1.60 3,221,001 $ 1.33 Options exercisable, end of the period 1,268,867 $ 1.59 2,036,401 $ 1.17 |
Stock based compensation expense | Year ended December 31 2017 2016 2015 Expected dividends paid per common share Nil Nil Nil Expected life in years 5.0 5.0 4.9 Expected volatility in the price of common shares 85 % 85 % 105 % Risk free interest rate 0.75 % 0.75 % 1.0 % Weighted average fair market value per share at grant date $ 0.99 $ 0.99 $ 1.28 Intrinsic (or "in-the-money") value per share of options exercised $ 0.45 $ 0.45 $ 1.40 |
Income tax expense (Tables)
Income tax expense (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Expense Tables | |
Income tax expense | 2017 2016 2015 Net income (loss) before income taxes $ (8,894,853 ) $ (8,725,051 ) $ 5,688,136 Canadian statutory income tax rate 27.0 % 27.0 % 26.0 % Income tax (recovery) at statutory income tax rate (2,401,610 ) (2,355,764 ) 1,478,915 Effect of non- deductible expenses and other items: Stock-based compensation and other expenses 156,966 223,463 407,593 Change in statutory tax rates 962,486 - (511,508 ) Foreign exchange adjustments 110,121 112,581 (489,665 ) Foreign tax credit benefit - (256,500 ) (1,755,678 ) Non-taxable portion of capital gain (50,525 ) - - Other 91,668 (271,676 ) (318,664 ) (1,130,894 ) (2,547,896 ) (1,189,007 ) Change in valuation allowance 1,130,894 2,547,896 (5,633,993 ) - - (6,823,000 ) Income taxes in foreign jurisdictions 75,545 374,511 1,970,908 Income tax expense (recovery) 75,545 374,511 (4,852,092 ) |
Valuation allowance | 2017 2016 2015 Net operating losses carried forward: Canada (expiration dates 2027 to 2038) $ 8,180,209 $ 6,747,506 $ 5,100,905 USA (expiration dates 2020 to 2026) 1,443,729 2,575,389 2,654,605 Timing differences on property & equipment and financing costs 2,012,709 1,789,311 1,850,228 SRED Expenditures 215,303 215,303 - Foreign Tax Credit 371,133 371,133 - 12,223,083 11,059,946 9,605,738 Intellectual property (5,761,674 ) (6,216,552 ) (6,671,544 ) 6,461,409 5,482,090 2,934,194 Less valuation allowance (6,461,409 ) (5,482,090 ) (2,934,194 ) - - - |
Change in non-cash working ca39
Change in non-cash working capital (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Changes In Non-Cash Working Capital Tables | |
Change in non-cash working capital | The changes in non-cash working capital balances are comprised of: For the year ended December 31 2017 2016 2015 Accounts receivable $ (61,657 ) $ 604,448 $ (561,470 ) Work-in-progress - 404,840 (404,840 ) Prepaid expenses and deposits 59,439 93,595 78,247 Accounts payable and accrued liabilities 986,430 (587,819 ) 381,157 Income taxes payable 103 (1,253,028 ) 1,253,126 Deferred gain (155,301 ) - - Deferred revenue - (706,722 ) 706,722 829,014 (1,444,686 ) 1,452,942 Portion attributable to: Operating activities 829,014 (1,384,499 ) 1,392,755 Financing activities - - - Investing activities - (60,187 ) 60,187 829,014 (1,444,686 ) 1,452,942 |
Commitments and contingencies (
Commitments and contingencies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments And Contingencies Tables | |
Estimated remaining minimum annual lease commitment | Fiscal year ending December 31 Office Premises Aircraft 2018 $ 551,553 $ 594,633 2019 551,553 594,633 2020 554,526 594,633 2021 563,450 594,633 2022 563,450 148,658 2,784,532 2,527,190 Thereafter, 2023 through 2025 1,549,487 - 4,334,019 2,527,190 |
Geographic information (Tables)
Geographic information (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Geographic Information Tables | |
Revenues derived by geographic area | 2017 2016 2015 South and Central America (Bolivia, Belize) $ - $ 1,447,269 $ 17,422,151 North America - - - - 17,422,151 3,913,367 |
Survey Expenses (Tables)
Survey Expenses (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Survey Expenses Tables | |
Survey Expenses | 2017 2016 2015 Aircraft Operations Charter Hire Revenue Earned (470,982 ) (564,505 ) - Lease payments 304,410 - - Operating Expenses 1,084,432 1,185,359 - 917,860 620,854 - Survey Projects 371,569 536,331 5,095,691 1,289,429 1,157,185 5,095,691 |
Other related party transacti43
Other related party transactions (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Other Related Party Transactions Tables | |
Other related party transactions | 2017 2016 2015 $ 172,199 $ 62,645 $ 100,598 |
Significant Accounting Polici44
Significant Accounting Policies (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Computer hardware | |
Annual rates and methods of depriciation | 30% declining balance |
Computer software | |
Annual rates and methods of depriciation | 100% declining balance |
Aircraft [Member] | |
Annual rates and methods of depriciation | 10% declining balance |
Furniture and other equipment [Member] | |
Annual rates and methods of depriciation | 20% declining balance |
Leasehold improvements [Member] | |
Annual rates and methods of depriciation | 10% declining balance |
Deposits (Details)
Deposits (Details) - CAD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Operating lease, security depsits | $ 518,765 | |
Building [Member] | ||
Operating lease, security depsits | 43,310 | |
Aircraft [Member] | ||
Operating lease, security depsits | $ 475,455 |
Deposits (Details Narrative)
Deposits (Details Narrative) | 12 Months Ended |
Dec. 31, 2017 | |
Building [Member] | |
Operating lease, term of contract | 2,025 |
Aircraft [Member] | |
Operating lease, term of contract | 2,022 |
Property and equipment (Details
Property and equipment (Details) - CAD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Gross property and equipment | $ 3,624,513 | $ 6,350,397 |
Less accumulated depreciation, amortization and impairment | 2,845,828 | 3,001,840 |
Net property and equipment | 778,685 | 3,348,557 |
Survey equipment [Member] | ||
Gross property and equipment | 684,890 | 680,518 |
Less accumulated depreciation, amortization and impairment | 612,717 | 593,228 |
Net property and equipment | 72,174 | 87,290 |
Aircraft [Member] | ||
Gross property and equipment | 2,734,611 | |
Less accumulated depreciation, amortization and impairment | 287,277 | |
Net property and equipment | 2,447,334 | |
Computers and software [Member] | ||
Gross property and equipment | 1,246,095 | 1,241,740 |
Less accumulated depreciation, amortization and impairment | 1,177,653 | 1,140,956 |
Net property and equipment | 68,442 | 100,784 |
Furniture and other equipment [Member] | ||
Gross property and equipment | 528,420 | 528,420 |
Less accumulated depreciation, amortization and impairment | 498,304 | 490,775 |
Net property and equipment | 30,115 | 37,645 |
Leasehold improvements [Member] | ||
Gross property and equipment | 1,165,108 | 1,165,108 |
Less accumulated depreciation, amortization and impairment | 557,154 | 489,604 |
Net property and equipment | $ 607,953 | $ 675,504 |
Intellectual property (Details)
Intellectual property (Details) - CAD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Intellectual Property Details | ||
Intellectual property acquired | $ 25,271,000 | $ 25,271,000 |
Accumulated amortization and impairment | (3,931,467) | (2,246,732) |
Intellectual property, net | $ 21,339,533 | $ 23,024,268 |
Intellectual property (Details
Intellectual property (Details Narrative) | 12 Months Ended |
Dec. 31, 2017CAD ($) | |
Intellectual Property Details Narrative | |
Fair value of consideration | $ 25,300,000 |
Estimated useful life of asset | 15 years |
Annual amortization expense 2018 | $ 1,700,000 |
Annual amortization expense 2019 | 1,700,000 |
Annual amortization expense 2020 | 1,700,000 |
Annual amortization expense 2021 | 1,700,000 |
Annual amortization expense 2022 | 1,700,000 |
Amortization expense total | $ 8,500,000 |
Accounts payable and accrued 50
Accounts payable and accrued liabilities (Details) - CAD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Gross Accrued liabilities | $ 1,079,443 | $ 263,885 |
Accrued liabilities Current | 482,951 | 312,079 |
Trade payables and other | 1,562,394 | 575,964 |
Consultants and professional fees | ||
Gross Accrued liabilities | 353,333 | 107,387 |
Board of Directors' fees | ||
Gross Accrued liabilities | 175,000 | |
Survey and other projects | ||
Gross Accrued liabilities | ||
Payroll (vacation pay and wages payable) | ||
Gross Accrued liabilities | $ 551,110 | $ 156,498 |
Capital lease obligation (Detai
Capital lease obligation (Details) - CAD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Capital Lease Obligation Details | ||
Capital lease obligation, Gross | $ 124,697 | $ 161,466 |
Less current portion | (39,579) | (36,769) |
Capital lease obligation, Net | $ 85,118 | $ 124,697 |
Capital lease obligation (Det52
Capital lease obligation (Details 1) - CAD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Total capital lease obligation | $ 85,118 | $ 124,697 |
Capital Lease Obligations [Member] | ||
2,018 | 39,579 | |
2,019 | 42,603 | |
2,020 | 42,515 | |
Total capital lease obligation | $ 124,697 |
Capital lease obligation (Det53
Capital lease obligation (Details Narrative) | 12 Months Ended |
Dec. 31, 2017 | |
Capital Lease Obligation Details Narrative | |
Property and equipment interest rate | 7.40% |
Asset retirement obligation (De
Asset retirement obligation (Details) - CAD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Asset Retirement Obligation Details | |||
ARO balance, beginning of the year | $ 55,240 | $ 51,240 | $ 50,000 |
Accretion expense | 2,283 | 4,000 | 1,800 |
Costs incurred | (821) | (560) | |
Change in ARO estimates | |||
ARO balance, end of the year | $ 56,702 | $ 55,240 | $ 51,240 |
Asset retirement obligation (55
Asset retirement obligation (Details Narrative) | 12 Months Ended |
Dec. 31, 2017CAD ($) | |
Asset Retirement Obligation Details Narrative | |
Estimated future liability | $ 59,000 |
Inflation rate | 2.00% |
Risk-free interest rate | 1.60% |
Common shares (Details)
Common shares (Details) - CAD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Common Shares Details | |||
Beginning Balance, Shares | 53,856,509 | 53,306,109 | 44,958,843 |
Beginning Balance, Amount | $ 85,966,393 | $ 85,051,553 | $ 65,792,307 |
Issued on exercise of stock options, Shares | 7,334 | 565,722 | 347,266 |
Issued on exercise of stock options, Amount | $ 5,710 | $ 498,970 | $ 335,946 |
Rights Offering, net of issue costs (see i), Shares | 4,187,290 | ||
Rights Offering, net of issue costs (see i), Amount | $ 2,029,867 | ||
Shares for Debt, Shares | 110,000 | ||
Shares for Debt, Amount | $ 89,031 | ||
Transfer from contributed capital upon exercise of stock options, Amount | $ 415,870 | $ 242,700 | |
Conversion of Preferred Shares (note 5, Shares | 8,000,000 | ||
Conversion of Preferred Shares (note 5), Amount | $ 232,600 | ||
Stock options proceeds receivable, shares | |||
Stock options proceeds receivable, amount | $ 30,285 | $ (30,285) | |
Value assigned to acquisition of intellectual property, Amount | $ 18,448,000 | ||
Return to Treasury of exercised stock options shares | (15,322) | ||
Return to Treasury of exercised stock options amount | |||
Ending Balance, Shares | 58,161,133 | 53,856,509 | 53,306,109 |
Ending Balance, Amount | $ 88,121,286 | $ 85,966,393 | $ 85,051,553 |
Common shares (Details Narrativ
Common shares (Details Narrative) | 12 Months Ended | ||
Dec. 31, 2017USD ($)shares | Dec. 31, 2017CAD ($)$ / shares | Dec. 31, 2016CAD ($) | |
Accounts payable | $ | $ 78,980 | ||
Subscription [Member] | |||
Common stocks share issued | 2,237,607 | ||
Common stock issued to others | 1,556,751 | ||
Ownership percentage | 53.00% | ||
Additional shares subscription | 1,949,683 | ||
November 3rd 2017 [Member] | |||
Reduction in common share capital | $ | $ 63,778 | ||
Common stocks share issued | 4,187,290 | ||
Common stock per shares | $ / shares | $ 0.50 | ||
Proceeds from issuance of common shares | $ | $ 2,093,645 | ||
Insiders [Member] | |||
Common stocks share issued | 680,856 | ||
Consultant [Member] | |||
Reduction in common share capital | $ | $ 6,149 | $ 16,200 | |
Common stocks share issued | 110,000 | ||
Common stock per shares | $ / shares | $ .718 |
Net Income (loss) per share (De
Net Income (loss) per share (Details) - CAD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Net Income Loss Per Share Details | |||
Comprehensive income (loss) for the year | $ (8,970,398) | $ (9,099,562) | $ 10,540,228 |
Weighted average number of common shares outstanding Basic | 54,523,113 | 53,526,155 | 47,782,647 |
Weighted average number of common shares outstanding Additional shares related to assumed exercise of Stock options under treasury stock method | 1,258,736 | ||
Weighted average number of common shares outstanding Fully diluted | 54,523,113 | 53,526,155 | 49,041,383 |
Net Income (loss) per share - Basic | $ (0.16) | $ (0.17) | $ 0.22 |
Net Income (loss) per share - Diluted | $ (0.16) | $ (0.17) | $ (0.04) |
Stock options (Details )
Stock options (Details ) | 12 Months Ended |
Dec. 31, 2017$ / sharesshares | |
Exercise price | $ / shares | $ 1.6 |
Number of stock options outstanding | 1,648,667 |
Number of stock options exercisable | 1,268,867 |
Average remaining contractual life (years) | 2 years 4 months 24 days |
Range One | |
Exercise price | $ / shares | $ 0.76 |
Number of stock options outstanding | 36,667 |
Number of stock options exercisable | 36,667 |
Average remaining contractual life (years) | 2 months |
Range Two | |
Exercise price | $ / shares | $ 0.86 |
Number of stock options outstanding | 22,500 |
Number of stock options exercisable | 22,500 |
Average remaining contractual life (years) | 6 months |
Range Three | |
Exercise price | $ / shares | $ 1.35 |
Number of stock options outstanding | 546,900 |
Number of stock options exercisable | 388,767 |
Average remaining contractual life (years) | 2 years |
Range Four | |
Exercise price | $ / shares | $ 1.39 |
Number of stock options outstanding | 22,500 |
Number of stock options exercisable | 22,500 |
Average remaining contractual life (years) | 1 year 6 months |
Range Five | |
Exercise price | $ / shares | $ 1.45 |
Number of stock options outstanding | 37,500 |
Number of stock options exercisable | 37,500 |
Average remaining contractual life (years) | 4 years |
Range Six | |
Exercise price | $ / shares | $ 1.48 |
Number of stock options outstanding | 37,500 |
Number of stock options exercisable | 37,500 |
Average remaining contractual life (years) | 3 years 6 months |
Range Seven | |
Exercise price | $ / shares | $ 1.5 |
Number of stock options outstanding | 100,000 |
Number of stock options exercisable | 66,667 |
Average remaining contractual life (years) | 3 years 8 months 24 days |
Range Eight | |
Exercise price | $ / shares | $ 1.55 |
Number of stock options outstanding | 40,000 |
Number of stock options exercisable | 40,000 |
Average remaining contractual life (years) | 1 year 2 months 12 days |
Range Nine | |
Exercise price | $ / shares | $ 1.57 |
Number of stock options outstanding | 30,000 |
Number of stock options exercisable | 20,000 |
Average remaining contractual life (years) | 2 years 1 month 6 days |
Range Ten | |
Exercise price | $ / shares | $ 1.61 |
Number of stock options outstanding | 25,000 |
Number of stock options exercisable | 25,000 |
Average remaining contractual life (years) | 1 year 1 month 6 days |
Range Eleven | |
Exercise price | $ / shares | $ 1.67 |
Number of stock options outstanding | 150,000 |
Number of stock options exercisable | 150,000 |
Average remaining contractual life (years) | 1 year 10 months 24 days |
Range Twelve | |
Exercise price | $ / shares | $ 1.73 |
Number of stock options outstanding | 92,600 |
Number of stock options exercisable | 75,933 |
Average remaining contractual life (years) | 2 years 10 months 24 days |
Range Thirteen | |
Exercise price | $ / shares | $ 1.82 |
Number of stock options outstanding | 185,000 |
Number of stock options exercisable | 123,333 |
Average remaining contractual life (years) | 2 years 9 months 18 days |
Range Fourteen | |
Exercise price | $ / shares | $ 1.83 |
Number of stock options outstanding | 22,500 |
Number of stock options exercisable | 22,500 |
Average remaining contractual life (years) | 2 years 8 months 12 days |
Range Fifteen | |
Exercise price | $ / shares | $ 2.1 |
Number of stock options outstanding | 300,000 |
Number of stock options exercisable | 200,000 |
Average remaining contractual life (years) | 2 years 8 months 12 days |
Range Sixteen | |
Average remaining contractual life (years) | 2 years 8 months 12 days |
Stock options (Details 1)
Stock options (Details 1) - $ / shares | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Number of stock options | ||
Outstanding | 1,648,667 | |
Options exercisable as at end of the year | 1,268,867 | |
Weighted average exercise price | ||
Options outstanding as at end of the year | $ 1.6 | |
Stock Option [Member] | ||
Number of stock options | ||
Outstanding | 3,221,001 | 3,462,835 |
Granted | 475,000 | |
Exercised | (7,334) | (565,722) |
Expired | (1,190,000) | |
Forfeited | (375,000) | (151,112) |
Outstanding | 1,648,667 | 3,221,001 |
Options exercisable as at end of the year | 1,268,867 | 2,036,401 |
Weighted average exercise price | ||
Outstanding at beginning of the year | $ 1.33 | $ 1.26 |
Granted | 1.50 | |
Exercised | 0.76 | |
Expired | 0.91 | |
Forfeited | 1.48 | 1.50 |
Options outstanding as at end of the year | 1.60 | 1.33 |
Options exercisable as at end of the year | $ 1.59 | $ 1.17 |
Stock options (Details 2)
Stock options (Details 2) - Stock Option [Member] - $ / shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Expected dividends paid per common share | |||
Expected life in years | 5 years | 5 years | 4 years 10 months 24 days |
Expected volatility in the price of common shares | 58.00% | 85.00% | 105.00% |
Risk free interest rate | 0.75% | 0.75% | 1.00% |
Weighted average fair market value per share at grant date | $ 0.99 | $ 0.99 | $ 1.28 |
Intrinsic (or "in-the-money") value per share of options exercised | $ 0.45 | $ 0.45 | $ 1.40 |
Stock options (Details Narrativ
Stock options (Details Narrative) | Dec. 31, 2017CAD ($) |
Stock Options Details Narrative | |
Unamortized non-vested portion of stock options | $ 176,000 |
Income tax expense (Details)
Income tax expense (Details) | 12 Months Ended | |||||
Dec. 31, 2017CAD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016CAD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015CAD ($) | Dec. 31, 2015USD ($) | |
Income Tax Expense Details | ||||||
Net income (loss) before income taxes | $ (8,894,853) | $ (8,725,051) | $ 5,688,136 | |||
Canadian statutory income tax rate | 27.00% | 27.00% | 27.00% | 27.00% | 26.00% | 26.00% |
Income tax (recovery) at statutory income tax rate | $ (2,401,610) | $ (2,355,764) | $ 1,478,915 | |||
Effect of non- deductible expenses and other items: | ||||||
Stock-based compensation and other expenses | 156,966 | 223,463 | 407,593 | |||
Change in statutory tax rates | 962,486 | (511,508) | ||||
Foreign exchange adjustment | 110,121 | 112,581 | (489,665) | |||
Foreign tax credit benefit | (256,500) | (1,755,678) | ||||
Non-taxable portion of capital gain | (50,525) | |||||
Other | 91,668 | (271,676) | (318,664) | |||
Effective Income Tax Rate Reconciliation, Nondeductible Expense | (1,130,894) | (2,547,896) | (1,189,007) | |||
Change in valuation allowance | $ 1,130,894 | $ 2,547,896 | $ (5,633,993) | |||
Income tax expense (recovery) Deferred | $ (6,823,000) | |||||
Income taxes in foreign jurisdictions | 75,545 | 374,511 | 1,970,908 | |||
Income tax expense (recovery) | $ 75,545 | $ 374,511 | $ (4,852,092) |
Income tax expense (Details 1)
Income tax expense (Details 1) | Dec. 31, 2017CAD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016CAD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015CAD ($) | Dec. 31, 2015USD ($) |
Net operating losses carried forward: | ||||||
Timing differences on property and equipment and financing costs | $ 2,012,709 | $ 1,789,311 | $ 1,850,228 | |||
SRED Expenditures | 215,303 | 215,303 | ||||
Foreign Tax Credit | 371,133 | 371,133 | ||||
Total operating loss carryforwards | $ 12,223,083 | $ 11,059,946 | $ 9,605,738 | |||
Intellectual property | (5,761,674) | (6,216,552) | (6,671,544) | |||
Deferred tax assets, operating loss carryforwards | 6,461,409 | 5,482,090 | 2,934,194 | |||
Less valuation allowance | (6,461,409) | (5,482,090) | (2,934,194) | |||
Net operating loss carry forward | ||||||
Canada | ||||||
Net operating losses carried forward: | ||||||
Operating loss carryforwards | 8,180,209 | 6,747,506 | 5,100,905 | |||
USA | ||||||
Net operating losses carried forward: | ||||||
Operating loss carryforwards | $ 1,443,729 | $ 2,575,389 | $ 2,654,605 |
Income tax expense (Details Nar
Income tax expense (Details Narrative) - CAD ($) | Dec. 22, 2017 | Dec. 31, 2017 | Dec. 31, 2016 |
Foreign withholding taxes | $ 75,545 | $ 159,990 | |
Maximum [Member] | |||
Federal tax rate | 35.00% | ||
Minimum [Member] | |||
Federal tax rate | 21.00% |
Change in non-cash working ca66
Change in non-cash working capital (Details) - CAD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Change In Non-cash Working Capital Details | |||
Accounts receivable | $ (61,657) | $ 604,448 | $ (561,470) |
Work-in-progress | 404,840 | (404,840) | |
Prepaid expenses and deposits | 59,439 | 93,595 | 78,247 |
Accounts payable and accrued liabilities | 986,430 | (587,819) | 381,157 |
Income taxes payable | 103 | (1,253,028) | 1,253,126 |
Deferred gain | (155,301) | ||
Deferred revenue | (706,722) | 706,722 | |
Change in non-cash working capital | 829,014 | (1,444,686) | 1,452,942 |
Portion attributable to: | |||
Operating activities | 829,014 | (1,384,499) | 1,392,755 |
Financing activities | |||
Investing activities | (60,187) | 60,187 | |
Change in non-cash working capital | $ 829,014 | $ (1,444,686) | $ 1,452,942 |
Commitments and contingencies67
Commitments and contingencies (Details) | Dec. 31, 2017CAD ($) |
Aircraft [Member] | |
2,018 | $ 594,633 |
2,019 | 594,633 |
2,020 | 594,633 |
2,021 | 594,633 |
2,022 | 148,658 |
Estimated future minimum annual commitment | 2,527,190 |
Thereafter, 2023 through 2025 | |
Total leases payments due | 2,527,190 |
Office Premises [Member] | |
2,018 | 551,553 |
2,019 | 551,553 |
2,020 | 554,526 |
2,021 | 563,450 |
2,022 | 563,450 |
Estimated future minimum annual commitment | 2,784,532 |
Thereafter, 2023 through 2025 | 1,549,487 |
Total leases payments due | $ 4,334,019 |
Commitments and contingencies68
Commitments and contingencies (Details Narrative) | 1 Months Ended | 12 Months Ended | ||
Apr. 30, 2017 | Dec. 31, 2017USD ($) | Dec. 31, 2017CAD ($) | Dec. 31, 2016CAD ($) | |
Deferred charges | $ 81,919 | $ 84,838 | ||
Lease term | 60 months | |||
Aircraft [Member] | ||||
Lease term | 60 months | |||
Initial estimated minimum monthly lease payment | $ 40,000 | |||
Office Premises [Member] | ||||
Lease term | 10 years | |||
Initial estimated minimum monthly lease payment | $ 44,624 |
Geographic information (Details
Geographic information (Details) | 12 Months Ended | |||||
Dec. 31, 2017CAD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016CAD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015CAD ($) | Dec. 31, 2015USD ($) | |
Survey revenue | $ 1,447,269 | $ 17,422,151 | ||||
South and Central America (Bolivia, Belize) [Member] | ||||||
Survey revenue | $ 1,447,269 | $ 17,422,151 | ||||
North America [Member] | ||||||
Survey revenue |
Survey Expenses (Details)
Survey Expenses (Details) - CAD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Aircraft Operations | |||
Charter Hire Revenue Earned | $ (470,982) | $ (564,505) | |
Lease payments | 304,410 | ||
Operating Expenses | 1,084,432 | 1,185,359 | |
Expense | 917,860 | 620,854 | |
Survey Projects | 371,569 | 536,331 | 5,095,691 |
Total Survey Expenses | $ 1,289,429 | $ 1,157,185 | $ 5,095,691 |
Other related party transacti71
Other related party transactions (Details) - CAD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Other Related Party Transactions Details | |||
Legal fees | $ 172,199 | $ 62,645 | $ 100,598 |
Other related party transacti72
Other related party transactions (Details Narrative) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Other Related Party Transactions Details Narrative | ||
Accounts payable and accrued liabilities | $ 120,479 | $ 10,443 |
Re-imbursement of expenses | $ 14,210 | $ 46 |
Aircraft Financing (Details Nar
Aircraft Financing (Details Narrative) - 1 months ended Apr. 30, 2017 | USD ($) | CAD ($) | USD ($) |
Aircraft Financing Details Narrative | |||
Purchased price of aircraft | $ 2,000,000 | ||
Selling price of aircraft | 2,300,000 | ||
Lease term | 60 months | ||
Proceeds from sale of aircraft | $ 2,700,000 | ||
Book value of aircraft | $ 2,400,000 | ||
Gain on disposition of aircraft | $ 776,504 | ||
Gain on disposition of assets description | Gain on disposition of $776,504 was deferred ($621,203 included in long term liabilities and $155,301 included in accounts payable and accrued liabilities). | ||
Monthly repayment | $ 39,500 | ||
Gain reduction description | The gain will be recognized as a reduction to the Company’s lease expense over the 60 month term of the lease. | ||
Sale leaseback, transaction description | NXT has the option to extend the term of the lease by an additional two years. Should NXT want to repurchase the aircraft at the end of the initial lease term, the purchase price is US $1.45 million. |
Subsequent Event Private Placem
Subsequent Event Private Placement (Details Narrative) - Subsequent Event [Member] - CAD ($) | 1 Months Ended | 12 Months Ended |
Feb. 16, 2018 | Dec. 31, 2017 | |
Material agreement, description | (a) the Subscriber will have the right to nominate one director for election to the board of directors of the Company (subject to maintaining any equity ownership of at least 10% in the Company); (b) the Subscriber will be entitled to participate in future equity or convertible security offerings of the Company in order to maintain its pro rata equity interest in the Company (subject to maintaining any equity ownership of at least 10% in the Company); (c) the Subscriber will be entitled to a similar equity offering participation right in connection with certain new entities that may be created by the Company to expand the application of its proprietary technologies; and (d) the Subscriber has agreed to a 18 month standstill from the closing date of the second tranche of the Private Placement and a 12 month restriction on dispositions of 75% of the securities acquired in the Private Placement. | |
Private Placement [Member] | Second Tranche [Member] | ||
Common units, issued | 5,538,203 | |
Proceeds from issuance of units | $ 5,117,300 | |
Private Placement [Member] | Three-Tranche [Member] | ||
Common units, issued | 10,905,212 | |
Common units, price per unit | $ 0.924 | |
Description of sale of stock | Each Unit consists of one Common Share and one-third of one Warrant. Each Warrant entitles the holder to acquire one Warrant Share at an exercise price of $1.20 for twelve (12) months from closing of the first tranche of the Private Placement. | |
Proceeds from issuance of units | $ 10,076,416 | |
Private Placement [Member] | First Tranche [Member] | ||
Common units, issued | 4,665,043 | |
Proceeds from issuance of units | $ 4,310,500 | |
Private Placement [Member] | Third Tranche [Member] | ||
Common units, issued | 701,965 | |
Proceeds from issuance of units | $ 648,616 |