Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2019shares | |
Document And Entity Information | |
Entity Registrant Name | NXT Energy Solutions Inc. |
Entity Central Index Key | 0001009922 |
Document Type | 20-F |
Document Period End Date | Dec. 31, 2019 |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Document Annual Report | true |
Document Transition Report | false |
Document Shell Company Report | false |
Is Entity a Well-known Seasoned Issuer? | No |
Is Entity a Voluntary Filer? | No |
Is Entity's Reporting Status Current? | Yes |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
Entity Filer Category | Non-accelerated Filer |
Entity Interactive Data Current | Yes |
Entity Incorporation State Country Code | A0 |
Entity Common Stock, Shares Outstanding | 64,406,891 |
Document Fiscal Period Focus | FY |
Document Fiscal Year Focus | 2019 |
Consolidated Balance Sheets
Consolidated Balance Sheets - CAD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Current assets | ||
Cash and cash equivalents | $ 2,858,245 | $ 339,532 |
Short-term investments (Note 3) | 3,781,512 | 3,900,000 |
Accounts receivable (Note 4) | 1,384,315 | 61,279 |
Note receivable (Note 5) | 324,700 | 0 |
Prepaid expenses | 97,132 | 65,159 |
Total current assets | 8,445,904 | 4,365,970 |
Long term assets | ||
Deposits (Note 6) | 535,554 | 560,341 |
Property and equipment (Note 7) | 677,647 | 683,157 |
Right of use assets (Note 8) | 3,063,769 | 0 |
Intellectual property (Note 8) | 17,970,067 | 19,654,800 |
Total assets | 30,692,941 | 25,264,268 |
Current liabilities | ||
Accounts payable and accrued liabilities (Note 10) | 448,928 | 499,535 |
Contract obligations (Note 11) | 131,386 | 0 |
Current portion of capital lease obligation (Note 13) | 736,408 | 42,603 |
Total current liabilities | 1,316,722 | 542,138 |
Long-term liabilities | ||
Long-term lease obligation (Note 13) | 2,669,736 | 42,515 |
Asset retirement obligation (Note 12) | 21,481 | 26,778 |
Other liabilities and deferred charges | 0 | 441,368 |
Total long term liabilities | 2,691,217 | 510,661 |
Total liabilities | 4,007,939 | 1,052,799 |
Commitments and contingencies (Note 14) | ||
Shareholders' equity: | ||
Common shares (Note 15): - authorized unlimited, issued: 64,406,891 (2018 - 68,573,558) common shares | 95,313,064 | 96,656,248 |
Contributed capital | 9,306,493 | 9,262,684 |
Deficit | (78,645,489) | (82,418,397) |
Accumulated other comprehensive income | 710,934 | 710,934 |
Total shareholders' equity | 26,685,002 | 24,211,469 |
Total liabilities and shareholders' equity | $ 30,692,941 | $ 25,264,268 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Shareholders' equity: | ||
Common shares, authorized | Unlimited | Unlimited |
Common shares, issued | 64,406,891 | 68,573,558 |
Consolidated Statements of Inco
Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) - CAD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenue | |||
Survey revenue (Note 21) | $ 11,976,149 | $ 0 | $ 0 |
Expense | |||
Survey costs, net (Note 22) | 2,611,086 | 1,103,946 | 1,289,429 |
General and administrative expenses | 3,497,785 | 3,999,089 | 4,960,961 |
Stock based compensation expense (Note 17) | 43,809 | 386,154 | 581,356 |
Amortization expense (Note 7, 8 & 9) | 1,781,181 | 1,790,267 | 1,897,576 |
Total expense | 7,933,861 | 7,279,456 | 8,729,322 |
Other expenses (income) | |||
Interest expense (income), net | (20,684) | (62,004) | 4,485 |
Foreign exchange (gain) loss | 233,231 | (19,852) | 69,676 |
Intellectual property and other | 56,833 | (43,428) | 91,370 |
Gain on extinguishment of liability (Note 24) | 0 | (185,661) | 0 |
Total other expense (income) | 269,380 | (310,945) | 165,531 |
Income (loss) before income taxes | 3,772,908 | (6,968,511) | (8,894,853) |
Income tax expense (Note 18) | |||
Current | 0 | 0 | 75,545 |
Net income (loss) and comprehensive income (loss) | $ 3,772,908 | $ (6,968,511) | $ (8,970,938) |
Net income (loss) per share (Note 16) | |||
Basic | $ 0.06 | $ (0.11) | $ (0.16) |
Diluted | $ 0.06 | $ (0.11) | $ (0.16) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - CAD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Operating activities | |||
Comprehensive income (loss) for the year | $ 3,772,908 | $ (6,968,511) | $ (8,970,938) |
Items not affecting cash: | |||
Stock based compensation expense (Note 17) | 43,809 | 386,154 | 581,356 |
Amortization expense (Notes 7, 8 & 9) | 1,781,181 | 1,790,267 | 1,897,576 |
Settlement of payable with shares | 0 | 0 | 95,181 |
Non-cash changes to asset retirement obligation | 2,068 | (29,925) | 1,462 |
Non-cash lease and interest expense | (171,056) | 0 | 0 |
Valuation allowance of Bolivian Tax Credits | 0 | 0 | 207,682 |
Unrealized foreign exchange | 121,578 | (19,853) | 0 |
Amortization of deferred gain on sale of aircraft | 0 | (155,301) | (103,534) |
Gain on settlement of liabilities and deferred rent | 0 | (188,580) | (3,018) |
Change in non-cash working capital balances (Note 20) | (1,464,695) | (858,170) | 829,014 |
ARO liabilities settled | (7,366) | 0 | 0 |
Total non-cash items | 305,519 | 924,592 | 3,505,719 |
Net cash (used in) operating activities | 4,078,427 | (6,043,919) | (5,464,679) |
Financing activities | |||
Net funds used in targeted issuer bid (Note 15) | (1,343,184) | 0 | 0 |
Proceeds from exercise of stock options | 0 | 5,067 | 35,995 |
Net Proceeds from rights offering | 0 | 0 | 2,029,867 |
Cost of equity-based transaction with non-employee | 0 | 0 | (6,149) |
Net proceeds from private placement | 0 | 9,211,351 | 0 |
Repayment of capital lease obligation | (42,603) | (39,579) | (36,769) |
Net cash from (used in) financing activities | (1,385,787) | 9,176,839 | 2,022,944 |
Investing activities | |||
Purchase of property and equipment, net | (216,691) | (10,006) | 3,133,531 |
Decrease (increase) in short-term investments and deposits | 42,764 | (2,950,000) | (15,674) |
Net cash from (used in) investing activities | (173,927) | (2,960,006) | 3,117,857 |
Net increase (decrease) in cash and cash equivalents | 2,518,713 | 172,914 | (323,878) |
Cash and cash equivalents, beginning of the year | 339,532 | 166,618 | 490,496 |
Cash and cash equivalents, end of the year | 2,858,245 | 339,532 | 166,618 |
Supplemental information: | |||
Cash interest (received) | (16,724) | (58,889) | 4,487 |
Cash taxes paid | $ 0 | $ 0 | $ 72,587 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - CAD ($) | Common Shares | Contributed Capital | Deficit | Accumulated Other Comprehensive Income | Total |
Beginning balance at Dec. 31, 2016 | $ 85,966,393 | $ 7,613,719 | $ (66,479,488) | $ 710,934 | $ 27,811,559 |
Rights offering & finders fee (Note 15) | 2,029,867 | 2,029,867 | |||
Issued upon exercise of stock options | 35,995 | 35,995 | |||
Recognition of stock based compensation expense | 581,356 | 581,356 | |||
Equity-based transaction with non-employee | 89,031 | 89,031 | |||
Net income (loss) and comprehensive income (loss) for the year | (8,970,938) | (8,970,938) | |||
Ending balance at Dec. 31, 2017 | 88,121,286 | 8,195,075 | (75,449,886) | 710,934 | 21,577,409 |
Issuance of common stock on private placement (Note 115) | 8,387,451 | 8,387,451 | |||
Issuance of warrants on private placement (Note 15) | 687,896 | 687,896 | |||
Rights offering & finders fee (Note 15) | 136,003 | 136,003 | |||
Issued upon exercise of stock options | 5,067 | 5,067 | |||
Recognition of stock based compensation expense | 386,154 | 386,154 | |||
Transfer from contributed capital upon exercise of stock options (Note 10) | 6,441 | (6,441) | 0 | ||
Net income (loss) and comprehensive income (loss) for the year | (6,968,511) | (6,968,511) | |||
Ending balance at Dec. 31, 2018 | 96,656,248 | 9,262,684 | (82,418,397) | 710,934 | 24,211,469 |
Shares purchased and retired during the year (Note 15) | (1,343,184) | (1,343,184) | |||
Recognition of stock based compensation expense | 43,809 | 43,809 | |||
Net income (loss) and comprehensive income (loss) for the year | 3,772,908 | 3,772,908 | |||
Ending balance at Dec. 31, 2019 | $ 95,313,064 | $ 9,306,493 | $ (78,645,489) | $ 710,934 | $ 26,685,002 |
The Company and future operatio
The Company and future operations | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
The Company and future operations | NXT Energy Solutions Inc. (the "Company" or "NXT") is a publicly traded company based in Calgary, Alberta Canada. NXT's 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. These consolidated financial statements have been prepared on a going concern basis. The going concern basis of presentation assumes that NXT will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business. However, NXT's future financial results and its longer term success remains dependent upon the ability to continue to attract and execute client projects to build its revenue base. NXT continues to develop its pipeline of opportunities to secure new revenue contracts. The Company’s longer-term success remains dependent upon its ability to convert these opportunities into successful contracts and to continue to attract new client projects and expand the revenue base to a level sufficient to exceed fixed operating costs and continue to generate positive cash flow from operations. The occurrence and timing of these events cannot be predicted with certainty. |
Significant accounting policies
Significant accounting policies | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Significant accounting policies | Basis of Presentation These consolidated financial statements for the year ended December 31, 2019 have been prepared by management in accordance with generally accepted accounting principles of the United States of America ("US GAAP”). 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 Judgements Estimates made relate primarily to the use of the going concern assumption, estimated useful lives, and the 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 management's 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 and up to one year. 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, 2019 and 2018, 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 Company’s 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 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, 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 2019, 2018 and 2017. Foreign Currency Translation The Company's 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 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. 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 NXT's 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. 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 per share, in periods when NXT has net income, is 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 Company's 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 Company’s 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). Revenue The performance obligation for NXT is the acquisition, processing, interpretation and integration of Stress Field Detection (SFD®) data. Revenue from the sale of SFD® survey contracts (net of any related foreign value added taxes) is recognized over time by measuring the progress toward satisfaction of its performance obligation to the customer. All funds received or invoiced in advance of recognition of revenue are reflected as contract obligations and classified as a current liability on our balance sheet. The Company uses direct survey costs as the input measure to recognize revenue in any fiscal period. The percentage of direct survey costs incurred to date over the total expected survey costs to be incurred, provides an appropriate measure of the stage of the performance obligation being satisfied over time. Leases On January 1, 2019, NXT adopted ASC Topic 842, Leases (“Topic 842”) and related amendments, using the modified retrospective approach recognizing a cumulative effect adjustment at the beginning of the reporting period in which Topic 842 was applied. Results for reporting periods beginning after January 1, 2019, are presented in accordance with Topic 842, while prior periods have not been restated and are reported in accordance with ASC Topic 840, Leases (“Topic 840”). On transition, NXT elected certain practical expedients permitted under Topic 842 which include: a) No reassessment of the classification of leases previously assessed under Topic 840. b) The use of hindsight in determining the lease term where the contract contains terms to extend or terminate the lease. The policy and disclosures required under Topic 842 are included in Note 13, Leases. In accordance with Topic 842, NXT recognized a ROU asset and corresponding lease liability for all operating leases on the Consolidated Balance Sheet. Prior to the adoption of Topic 842, operating leases were not recognized on the Consolidated Balance Sheet. There was no impact to finance leases on transition to Topic 842. The impact from recognizing operating leases on NXT’s Consolidated Balance Sheet is as follows: Account Notes As reported December 31, 2018 Adjustments Balance on Adoption as at January 1, 2019 Property and equipment i $ 683,157 $ (139,725 ) $ 543,432 Right of Use ii - 3,535,919 3,535,919 Total Assets $ 25,264,268 $ 3,396,194 $ 28,660,462 Accounts payable and accrued liabilities iii $ 499,535 $ (155,301 ) $ 344,234 Current portion of capital lease obligations i 42,603 (42,603 ) - Current portion of lease obligations iv - 672,087 672,087 Capital lease obligations i 42,515 (42,515 ) - Long-term lease obligations iii - 3,405,894 3,405,894 Other liabilities iv 362,368 (362,368 ) - Deferred charges v 79,000 (79,000 ) - Total Liabilities and Shareholders’ Equity $ 25,264,268 $ 3,396,194 $ 28,660,462 Notes: i. Reclassify previously recognized finance leases: Leases accounted for as finance leases were reclassified to Right of Use Assets and lease liabilities from property, plant and equipment and capital leases, respectively. ii. Right of use: Right of use assets have been recognized for the building lease, aircraft lease and office equipment. Upon transition the building and aircraft right of use assets were calculated on the net present value of future lease payments less deferred charges for the building. The office equipment lease was previously recorded as a finance lease. The unamortized portion of the leased asset was reclassified to right of use assets. iii. Lease liabilities: The Company recognized lease liabilities in relation to leases which had previously been classified as operating. Under the principles of the new standard these leases have been measured at the present value of the remaining lease payments, discounted using the Company’s estimated incremental borrowing rates or implied interest rate in the lease contract. Rates varied between 7.4% and 15.7%. Total lease liabilities of $4,077,981 were recorded as at January 1, 2019, of which $672,087 was the current portion. iv. Account payable and other accrued liabilities, Other liabilities: The deferred gain on sale of the aircraft was reclassified from Accounts payable and other accrued liabilities and Other liabilities to Current portion of lease obligations and Long-term Lease Obligations. v. Deferred charges: The Deferred charges for the office lease have been reclassified to Right of use assets and are being amortized on a straight line basis over the remaining period of the lease. Although Topic 842 does not have a material impact on the Consolidated Statements of Income (loss) and Comprehensive Income (Loss) or Cash Flows, the change in the accounting of the aircraft lease now has interest expense of $69,776 for the year ended December 31, 2019 being recorded, whereas under Topic 840 that amount was recorded under survey costs. In the Consolidated Statements of Cash Flows under Operating Activities, amortization of deferred gain on sale of aircraft and deferred charges are now presented as Non-cash lease and interest expense, under Topic 842. |
Short-term investments
Short-term investments | 12 Months Ended |
Dec. 31, 2019 | |
Short-term Investments [Abstract] | |
Short-term investments | Short-term investments consist of Guaranteed Investment Certificates (“GIC’s”) with originally maturity dates of 90 days to one year from the date of purchase. As at December 31, 2019 all GIC’s had less than one year left before maturity. For December 31, 2019, interest rates ranged from 1.70% to 2.15%. For December 31, 2018, interest rates ranged from 2.10% to 2.15%. For the year ended December 31, December 31, Days to maturity 2019 2018 Less than 90 days $ 1,754,302 $ - 91 to 183 days 1,218,724 - 183 days to one year 808,486 3,900,000 3,781,512 3,900,000 |
Accounts receivable
Accounts receivable | 12 Months Ended |
Dec. 31, 2019 | |
Accounts Receivable, after Allowance for Credit Loss [Abstract] | |
Accounts receivable | Accounts receivable are all current as at December 31, 2019. For the year ended December 31, December 31, 2019 2018 Trade receivables $ 1,297,792 $ - Other receivables 86,523 61,279 1,384,315 61,279 Allowance for doubtful accounts - - Net accounts receivable 1,384,315 61,279 The entire Trade receivable is with one client. In March 2020, US$466,000 (CAD$619,128) was received on the outstanding trade receivable as at December 31, 2019. |
Notes receivable
Notes receivable | 12 Months Ended |
Dec. 31, 2019 | |
Accounts and Financing Receivable, after Allowance for Credit Loss [Abstract] | |
Notes receivable | NXT advanced $250,000 USD (the “Note Receivable”) to Alberta Green Ventures Limited Partnership (“AGV”) on a secured basis in September 2019. Income Tax Act As per the terms of the Note Receivable, NXT, in its sole and absolute discretion, was entitled to elect to receive any payment made by AGV by way of cash payment, or delivery for cancellation to NXT of the equivalent number of Common Shares having a fair market value equal to the aggregate of such amounts, calculated using the volume weighted average price of the Common Shares as reported and traded on the Toronto Stock Exchange for the five trading days immediately preceding the repayment date. On December 13, 2019 NXT issued a Direction to Pay to AGV, in which the principle of the Note Receivable would be settled in shares of NXT, however, this did not occur. On April 13, 2020, NXT has cancelled the previous Direction to Pay and has issued a new Direction to Pay to AGV. The April 13, 2020 Direction to Pay has now directed AGV to deliver US$250,000 in cash proceeds as repayment on the principle amount of US$250,000. Interest will begin to accrue until the date on which payment in full of all amounts owing pursuant to the Notes Receivable are received by NXT. NXT may change its Direction to Pay, if NXT so decides, at its sole and absolute discretion to receive the principal repayment by way of Common Shares by application to the Alberta Securities Commission. Based on the fair market value of the common shares held as collateral the Note Receivable is fully collateralized. |
Deposits
Deposits | 12 Months Ended |
Dec. 31, 2019 | |
Deposits [Abstract] | |
Deposits | Security deposits have been made to the lessors of the office building and the aircraft. The aircraft deposit is held in United States Dollars. For the year ended December 31, December 31, 2019 2018 Building $ 43,309 $ 43,310 Aircraft 492,245 517,031 535,554 560,341 |
Property and equipment
Property and equipment | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property and equipment | Cost Accumulated Net book For the period ended December 31, 2019 Base amortization value Survey equipment $ 892,637 $ 646,953 $ 245,684 Computers and software 1,265,045 1,219,045 46,000 Furniture and other equipment 528,419 509,146 19,273 Leasehold improvements 965,108 598,418 366,690 3,651,209 2,973,562 677,647 Cost Accumulated Net book For the period ended December 31, 2018 Base amortization value Survey equipment $ 684,890 $ 628,037 $ 56,853 Computers and software 1,256,101 1,201,047 55,054 Furniture and other equipment 528,420 504,328 24,092 Leasehold improvements 1,165,108 617,950 547,158 3,634,519 2,951,362 683,157 |
Right of use assets
Right of use assets | 12 Months Ended |
Dec. 31, 2019 | |
Right Of Use Assets | |
Right of use assets | Cost Accumulated Right of For the period ended December 31, 2019 Base Amortization Use Aircraft $ 1,578,774 $ 256,778 $ 1,321,996 Office Building 1,799,626 197,426 1,602,200 Printer 17,794 3,973 13,821 Office equipment 139,725 13,973 125,752 3,535,919 472,150 3,063,769 |
Intellectual property
Intellectual property | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
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 effect 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. For the year ended December 31, December 31, 2019 2018 Intellectual property acquired $ 25,271,000 $ 25,271,000 Accumulated amortization (7,300,933 ) (5,616,200 ) 17,970,067 19,654,800 |
Accounts payable and accrued li
Accounts payable and accrued liabilities | 12 Months Ended |
Dec. 31, 2019 | |
Payables and Accruals [Abstract] | |
Accounts payable and accrued liabilities | For the year ended December 31, December 31, 2019 2018 Accrued liabilities related to: Consultants and professional fees $ 311,635 $ 151,427 Board of Directors' fees - 22,500 Deferred gain on sale of aircraft (current) - 155,301 Payroll (wages payable and vacation pay) 106,529 47,271 418,164 376,499 Trade payables and other 30,764 123,036 448,928 499,535 |
Contract obligations
Contract obligations | 12 Months Ended |
Dec. 31, 2019 | |
Contract with Customer, Liability [Abstract] | |
Contract obligations | The Company has received a deposit of $100,000USD from Alberta Green Ventures Limited Partnership (“AGV’) to be applied to an SFD® survey which is scheduled to be completed by June 30, 2020. For the year ended December 31, December 31, 2019 2018 Contract obligations $ 131,386 $ - |
Asset retirement obligation
Asset retirement obligation | 12 Months Ended |
Dec. 31, 2019 | |
Asset Retirement Obligation [Abstract] | |
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 estimated future abandonment liability is approximately $22,000 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 2.5%. 2019 2018 ARO balance, beginning of the year $ 26,778 $ 56,702 Accretion expense 2,068 2,069 Costs incurred (7,365 ) - Change in ARO estimates - (31,993 ) ARO balance, end of the year 21,481 26,778 |
Lease obligation
Lease obligation | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Lease obligation | December 31, December 31, 2019 2018 Aircraft $ 1,680,103 $ - Office Building 1,669,953 - Printer 13,573 - Office equipment 42,515 85,118 3,406,144 85,118 Current Portion of lease obligations (736,408 ) (42,603 ) Long-term lease obligations 2,669,736 42,515 Maturity of lease liabilities: 2020 $ 1,057,776 2021 1,018,789 2022 587,536 2023 367,185 2024 367,185 After 2024 799,333 Total lease payments 4,197,804 Less imputed lease payments (791,660 ) Total discounted lease payments 3,406,144 Current portion of lease obligations (736,408 ) Non-current portion of lease obligations 2,669,736 Leases entered into for the use of an asset are classified as either operating or finance, which is determined at contract inception. Upon commencement of the lease, a ROU asset and corresponding lease liability are recognized on the Consolidated Balance Sheet for all operating and finance leases. NXT has elected the short-term lease exemption, which does not require a ROU asset or lease liability to be recognized on the Consolidated Balance Sheet when the lease term is 12 months or less and does not include an option to purchase the underlying asset that the lessee is reasonably certain to exercise. Upon commencement of the lease, ROU assets are measured at the initial measurement of the lease liability adjusted for any lease payments made before commencement date of the lease, less any lease incentives received and include any initial direct costs incurred. Lease liabilities are initially measured at the present value of future minimum lease payments over the lease term. The discount rate used to determine the present value is the rate implicit in the lease unless that rate cannot be determined, in which case NXT’s incremental borrowing rate is used. Operating lease ROU assets and liabilities are subsequently measured at the present value of the lease payments not yet paid and discounted at the initial discount rate at commencement of the lease, less any impairments to the ROU asset. Operating lease expense and revenue from any subleases are recognized in the Consolidated Statement of Income (Loss) and Comprehensive Income (Loss) on a straight line basis over the lease term. Finance lease ROU assets are amortized over the estimated useful life of the asset if the lessee is reasonably certain to exercise a purchase option or ownership of the leased asset transfers at the end of the lease term, otherwise the leased assets are amortized over the lease term. Operating leases include office building, aircraft and printer. Finance leases include office equipment. Currently there are no subleases. NXT’s lease contracts include rights to extend leases after the initial term. Rights to extend or terminate a lease are included in the lease term when there is reasonable certainty the right will be exercised. Factors used to assess reasonable certainty of rights to extend or terminate a lease include current and forecasted survey plans, anticipated changes in strategies, historical practice in extending similar contracts and current market conditions. |
Commitments
Commitments | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments | Associated with the adoption of Topic 842, all operating leases were recognized on the Consolidated Balance Sheet. Accordingly, operating leases are not included in the commitments table below. The table below is the non-lease operating cost components associated with the costs of the building lease. See Notes 2 and 13 for additional disclosures on leases. For the fiscal period ending December 31, Office Premises 2020 $ 222,069 2021 222,501 2022 222,501 2023 222,501 2024 222,501 1,112,073 2025 166,876 1,278,949 |
Common shares
Common shares | 12 Months Ended |
Dec. 31, 2019 | |
Shareholders' equity: | |
Common shares | The Company is authorized to issue an unlimited number of common shares, of which the following are issued and outstanding: For the Year Ended 31-Dec-19 31-Dec-18 # of shares $ amount # of shares $ amount As at the beginning of the year 68,573,558 $ 96,656,248 58,161,133 $ 88,121,286 Shares retired during the year (4,166,667 ) (1,343,184 ) - - Shares issued during the year: Issuance of Common Stock on the Private Placement - - 10,264,946 8,387,451 Exercise of stock options - - 6,667 5,067 Transfer from contributed capital on the exercise of stock options - - - 6,441 Finder’s fee - - 140,812 136,003 As at the end of the period 64,406,891 95,313,064 68,573,558 96,656,248 For the Year Ended 31-Dec-17 # of shares $ amount As at the beginning of the year 53,856,509 $ 85,966,393 Shares issued during the year: Exercise of stock options 7,334 5,710 Rights Offering, net of issue costs 4,187,290 2,029,867 Stock options proceeds receivable - 30,285 Shares for Debt 110,000 89,031 As at the end of the period 58,161,133 88,121,286 During the fourth quarter of 2019 the Company purchased 4,166,667 common shares in the capital of the Company at a price of $0.30 per common share for total gross costs of $1.25 million plus related costs of $93,184 from AGV. The 4,166,667 shares were cancelled immediately after they were purchased. This transaction was approved by the Toronto Stock Exchange and the Alberta Securities Commission. AGV’s 3,421,648 warrants expired as of October 31, 2019. In July 2018, the company completed a private placement. In total, AGV purchased 10,264,946 Units at a price of $0.924 per Unit for total gross proceeds of approximately $9,484,810. A finder’s fee of 3% of the total amount of the Private Placement, which was paid one half in shares and one half in cash during the third quarter of 2018. On November 3, 2017, NXT closed the Rights Offering that had been announced to existing shareholders on September 26, 2017. The Company issued 4,187,290 common shares a price of $0.50 per common share, for aggregate gross proceeds of $2,093,645. Share issue costs of $63,778 were recorded as a reduction to share capital. 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 $0.718. The cost of issuing these shares of $6,149 were recorded as a reduction to share capital. |
Earnings (loss) per share
Earnings (loss) per share | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Earnings (loss) per share | 2019 2018 2017 Comprehensive income (loss) for the year $ 3,772,908 $ (6,968,511 ) $ (8,970,398 ) Weighted average number of shares outstanding for the year: Basic 68,156,059 65,455,325 54,523,113 Diluted 68,156,059 65,455,325 54,523,113 Net Income (loss) per share – Basic $ 0.06 $ (0.11 ) $ (0.16 ) Net Income (loss) per share – Diluted $ 0.06 $ (0.11 ) $ (0.16 ) In periods in which a loss results, all outstanding stock options are excluded from the diluted loss per share calculations as their effect is anti-dilutive. During 2019 all stock options were out of the money and are not included in the Diluted weighted average number of shares. |
Share based compensation
Share based compensation | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Share based compensation | Stock Options: The following is a summary of stock options which are outstanding as at December 31, 2019. Average remaining Exercise price # of options #of options contractual per share outstanding exercisable life (in years) $ 0.52 100,000 100,000 4.5 $ 0.59 150,000 100,000 3.8 $ 1.35 236,900 236,900 0.0 $ 1.45 37,500 37,500 2.0 $ 1.48 37,500 37,500 1.5 $ 1.50 50,000 50,000 1.6 $ 1.57 30,000 30,000 0.1 $ 1.73 92,600 92,600 0.9 $ 1.82 135,000 135,000 0.8 $ 2.10 300,000 300,000 0.7 1,169,500 1,119,500 1.4 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, 2019 is as follows: For the year ended For the year ended December 31, 2019 December 31, 2018 weighted weighted # of stock average # of stock average options exercise price options exercise price Options outstanding, start of the period 1,297,000 $1.58 1,648,667 $1.60 Granted 100,000 $0.52 1,150,000 $1.06 Exercised - - (6,667 ) $0.76 Expired (47,500 ) $(1.51) (65,000 ) $1.17 Forfeited (180,000 ) $(1.70) (1,430,000 ) $1.21 Options outstanding, end of the period 1,169,500 $1.48 1,297,000 $1.58 Options exercisable, end of the period 1,119,500 $1.52 1,197,000 $1.67 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: For the period ended 2019 2018 2017 Expected dividends paid per common share Nil Nil Nil Expected life in years 5.0 5.0 - Expected volatility in the price of common shares 65% 65% - Risk free interest rate 1.68% 1.75% - Weighted average fair market value per share at grant date $0.52 $1.06 $- Intrinsic (or “in-the-money”) value per share of options exercised $- $0.59 $- The unamortized portion of SBCE related to the non-vested portion of stock options, which will be recognized in 2020, is approximately $12,582. |
Income tax expense
Income tax expense | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
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. 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 NXT's income (loss) before income taxes as follows: 2019 2018 2017 Net loss before income taxes $ 3,772,908 $ (6,968,551 ) $ (8,894,853 ) Canadian statutory income tax rate 26.5% 27.0% 27.0% Income tax (recovery) at statutory income tax rate 999,821 (1,881,509 ) (2,401,610 ) Effect of non- deductible expenses and other items: Stock-based compensation and other expenses 11,609 99,919 156,966 Change in statutory tax rates 918,821 - 962,486 Foreign exchange adjustments 82,433 (131,555 ) 110,121 Foreign tax credit benefit - - - Non-taxable portion of capital gain - - (50,525 ) Other 43,592 (221,978 ) 91,668 2,056,276 (2,135,123 ) (1,130,894 ) Change in valuation allowance (2,056,276 ) 2,135,123 1,130,894 - - - Income taxes in foreign jurisdictions - - 75,545 Income tax expense (recovery) - - 75,545 Effective July 1, 2019 the Province of Alberta decreased its corporate tax rate to 11%, with a further reductions to 10% on January 1, 2020, 9% on January 1, 2021 and 8% on January 1, 2022. 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 Company’s deferred income tax assets, due to uncertainty regarding the amount and timing of their potential future utilization, as follows: 2019 2018 2017 Net operating losses carried forward: Canada (expiration dates 2027 to 2039) $ 6,840,817 $ 9,563,701 $ 8,180,209 USA (expiration dates 2020 to 2026) 1,494,711 1,569,976 1,443,729 Timing differences on property & equipment and financing costs 1,810,789 2,109,557 2,012,709 SRED Expenditures 348,341 396,020 215,303 Foreign Tax Credit 285,772 371,133 371,133 10,780,430 14,010,387 12,223,083 Intellectual property (4,133,115 ) (5,306,796 ) (5,761,674 ) 6,647,315 8,703,591 6,461,409 Less valuation allowance (6,647,315 ) (8,703,591 ) (6,461,409 ) |
Financial instruments
Financial instruments | 12 Months Ended |
Dec. 31, 2019 | |
Financial Instruments, Owned, at Fair Value [Abstract] | |
Financial instruments | 1) Non-derivative financial instruments: The Company's non-derivative financial instruments consist of cash and cash equivalents, short-term investments, accounts receivable, note receivable, accounts payables and accrued liabilities and leases. The carrying value of these financial instruments, excluding leases, approximates their fair values due to their short terms to maturity. NXT is exposed to significant interest or credit risks arising from accounts receivable and notes receivable. For accounts receivable NXT has received advance payments and does not release results of surveys until a substantial portion of the accounts receivable has been paid. For the notes receivable, NXT has secured the note receivable. 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, 2019 and 2018, the Company held no derivative financial instruments. |
Change in non-cash working capi
Change in non-cash working capital | 12 Months Ended |
Dec. 31, 2019 | |
Change In Non-cash Working Capital | |
Change in non-cash working capital | The changes in non-cash working capital balances are comprised of: For the year ended December 31 2019 2018 2017 Accounts receivable $ (1,339,408 ) $ (1,252 ) $ (61,657 ) Note receivable (332,175 ) - - Prepaid expenses and deposits (31,973 ) 42,204 59,439 Accounts payable and accrued liabilities 104,745 (899,122 ) 986,533 Deferred gain - - (155,301 ) Contractual obligations 134,116 - - (1,464,695 ) (858,170 ) 829,014 Portion attributable to: Operating activities (1,464,695 ) (858,170 ) 829,014 Financing activities - - - Investing activities - - - (1,464,695 ) (858,170 ) 829,014 |
Geographic information
Geographic information | 12 Months Ended |
Dec. 31, 2019 | |
Segments, Geographical Areas [Abstract] | |
Geographic information | The Company generates revenue from its SFD® survey system that enables the clients to focus their hydrocarbon exploration decisions concerning land commitments, data acquisition expenditures and prospect prioritization on areas with the greatest potential. NXT conducts all of its survey operations from its head office in Canada, and occasionally maintains administrative offices in foreign locations if and when needed. Revenue fluctuations are a normal part of SFD® survey system sales and can vary significantly year-over-year. Revenues by geographic area were generated solely in Nigeria in 2019, entirely from a single client. There were no revenues in 2018 and 2017. 2019 2018 2017 Nigeria $ 11,976,149 $ - $ - 11,976,149 - - |
Survey expenses
Survey expenses | 12 Months Ended |
Dec. 31, 2019 | |
Survey Expenses Tables | |
Survey expenses | Survey Expenses include the following: 2019 2018 2017 Aircraft Operations Charter Hire Revenue Earned $ (613,038 ) $ (698,211 ) $ (470,982 ) Lease payments 400,847 454,729 304,410 Operating Expenses 1,459,536 1,347,428 1,084,432 1,247,345 1,103,946 917,860 Survey Projects 1,363,741 - 371,569 2,611,086 1,103,946 1,289,429 |
Other related party transaction
Other related party transactions | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
Other related party transactions | One of the members of NXT’s 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: 2019 2018 2017 Legal Fees $ 276,261 $ 249,218 $ 172,199 Accounts payable and accrued liabilities includes a total of $146,197 ($5,999 as at December 31, 2018) payable to this law firm. Interest of $1,809 was received from AGV during the year. In addition, accounts payable and accrued liabilities includes $NIL ($7,461 as at December 31, 2018) related to re-imbursement of expenses owing to an Officer of NXT. |
Gain on extinguishment of liabi
Gain on extinguishment of liability | 12 Months Ended |
Dec. 31, 2019 | |
Gain On Extinguishment Of Liability | |
Gain on extinguishment of liability | In 2018 NXT determined that liabilities it had recorded before 2005 were no longer payable. As a result a gain of $185,661 has been recognized on the extinguishment of the liability. No cash was paid. |
Subsequent events
Subsequent events | 12 Months Ended |
Dec. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent events | Covid-19 As of the report date of these consolidated financial statements the Covid-19 pandemic has not had a material effect on the operations of the Company. The Company has made provisions so employees can work from home, suspended all travel, international travelers are to self-isolate for 14 days after return to Canada, and hygiene and social distancing policies are in effect if present in the office. NXT continues to communicate with employees and customers via available communication methods such as tele-conferences and on-line video conferencing. Demand for our services and prospective revenues may become adversely impacted the longer the Covid-19 Pandemic continues. The impact of the continuation of the Covid-19 Pandemic may hamper our ability to deliver SFD® surveys contracts in the following ways. If restrictions on international travel continue, our aircraft and personal will not be able to perform surveys. An outbreak of the virus among our staff or our customers’ personnel would delay any survey in progress. Business development may be delayed when in-person meetings and technical presentations may be a superior delivery method. |
Significant accounting polici_2
Significant accounting policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | These consolidated financial statements for the year ended December 31, 2019 have been prepared by management in accordance with generally accepted accounting principles of the United States of America ("US GAAP”). |
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 Judgements | Estimates made relate primarily to the use of the going concern assumption, estimated useful lives, and the 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 management's 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 and up to one year. |
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, 2019 and 2018, 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 Company’s 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 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, 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 2019, 2018 and 2017. |
Foreign Currency Translation | The Company's 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 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. |
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 NXT's 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. |
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 per share, in periods when NXT has net income, is 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 Company's 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 Company’s 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). |
Revenue | The performance obligation for NXT is the acquisition, processing, interpretation and integration of Stress Field Detection (SFD®) data. Revenue from the sale of SFD® survey contracts (net of any related foreign value added taxes) is recognized over time by measuring the progress toward satisfaction of its performance obligation to the customer. All funds received or invoiced in advance of recognition of revenue are reflected as contract obligations and classified as a current liability on our balance sheet. The Company uses direct survey costs as the input measure to recognize revenue in any fiscal period. The percentage of direct survey costs incurred to date over the total expected survey costs to be incurred, provides an appropriate measure of the stage of the performance obligation being satisfied over time. |
Leases | On January 1, 2019, NXT adopted ASC Topic 842, Leases (“Topic 842”) and related amendments, using the modified retrospective approach recognizing a cumulative effect adjustment at the beginning of the reporting period in which Topic 842 was applied. Results for reporting periods beginning after January 1, 2019, are presented in accordance with Topic 842, while prior periods have not been restated and are reported in accordance with ASC Topic 840, Leases (“Topic 840”). On transition, NXT elected certain practical expedients permitted under Topic 842 which include: a) No reassessment of the classification of leases previously assessed under Topic 840. b) The use of hindsight in determining the lease term where the contract contains terms to extend or terminate the lease. The policy and disclosures required under Topic 842 are included in Note 13, Leases. In accordance with Topic 842, NXT recognized a ROU asset and corresponding lease liability for all operating leases on the Consolidated Balance Sheet. Prior to the adoption of Topic 842, operating leases were not recognized on the Consolidated Balance Sheet. There was no impact to finance leases on transition to Topic 842. The impact from recognizing operating leases on NXT’s Consolidated Balance Sheet is as follows: Account Notes As reported December 31, 2018 Adjustments Balance on Adoption as at January 1, 2019 Property and equipment i $ 683,157 $ (139,725 ) $ 543,432 Right of Use ii - 3,535,919 3,535,919 Total Assets $ 25,264,268 $ 3,396,194 $ 28,660,462 Accounts payable and accrued liabilities iii $ 499,535 $ (155,301 ) $ 344,234 Current portion of capital lease obligations i 42,603 (42,603 ) - Current portion of lease obligations iv - 672,087 672,087 Capital lease obligations i 42,515 (42,515 ) - Long-term lease obligations iii - 3,405,894 3,405,894 Other liabilities iv 362,368 (362,368 ) - Deferred charges v 79,000 (79,000 ) - Total Liabilities and Shareholders’ Equity $ 25,264,268 $ 3,396,194 $ 28,660,462 Notes: i. Reclassify previously recognized finance leases: Leases accounted for as finance leases were reclassified to Right of Use Assets and lease liabilities from property, plant and equipment and capital leases, respectively. ii. Right of use: Right of use assets have been recognized for the building lease, aircraft lease and office equipment. Upon transition the building and aircraft right of use assets were calculated on the net present value of future lease payments less deferred charges for the building. The office equipment lease was previously recorded as a finance lease. The unamortized portion of the leased asset was reclassified to right of use assets. iii. Lease liabilities: The Company recognized lease liabilities in relation to leases which had previously been classified as operating. Under the principles of the new standard these leases have been measured at the present value of the remaining lease payments, discounted using the Company’s estimated incremental borrowing rates or implied interest rate in the lease contract. Rates varied between 7.4% and 15.7%. Total lease liabilities of $4,077,981 were recorded as at January 1, 2019, of which $672,087 was the current portion. iv. Account payable and other accrued liabilities, Other liabilities: The deferred gain on sale of the aircraft was reclassified from Accounts payable and other accrued liabilities and Other liabilities to Current portion of lease obligations and Long-term Lease Obligations. v. Deferred charges: The Deferred charges for the office lease have been reclassified to Right of use assets and are being amortized on a straight line basis over the remaining period of the lease. Although Topic 842 does not have a material impact on the Consolidated Statements of Income (loss) and Comprehensive Income (Loss) or Cash Flows, the change in the accounting of the aircraft lease now has interest expense of $69,776 for the year ended December 31, 2019 being recorded, whereas under Topic 840 that amount was recorded under survey costs. In the Consolidated Statements of Cash Flows under Operating Activities, amortization of deferred gain on sale of aircraft and deferred charges are now presented as Non-cash lease and interest expense, under Topic 842. |
Significant accounting polici_3
Significant accounting policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Property and equipment is recorded at cost | Computer hardware (including survey equipment) 30% declining balance Aircraft 10% declining balance Furniture and other equipment 20% declining balance Leasehold improvements 10% declining balance |
Impact of new accounting pronouncement | Account Notes As reported December 31, 2018 Adjustments Balance on Adoption as at January 1, 2019 Property and equipment i $ 683,157 $ (139,725 ) $ 543,432 Right of Use ii - 3,535,919 3,535,919 Total Assets $ 25,264,268 $ 3,396,194 $ 28,660,462 Accounts payable and accrued liabilities iii $ 499,535 $ (155,301 ) $ 344,234 Current portion of capital lease obligations i 42,603 (42,603 ) - Current portion of lease obligations iv - 672,087 672,087 Capital lease obligations i 42,515 (42,515 ) - Long-term lease obligations iii - 3,405,894 3,405,894 Other liabilities iv 362,368 (362,368 ) - Deferred charges v 79,000 (79,000 ) - Total Liabilities and Shareholders’ Equity $ 25,264,268 $ 3,396,194 $ 28,660,462 |
Short-term investments (Tables)
Short-term investments (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Short-term Investments [Abstract] | |
Short-term investments | For the year ended December 31, December 31, Days to maturity 2019 2018 Less than 90 days $ 1,754,302 $ - 91 to 183 days 1,218,724 - 183 days to one year 808,486 3,900,000 3,781,512 3,900,000 |
Accounts receivable (Tables)
Accounts receivable (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accounts Receivable, after Allowance for Credit Loss [Abstract] | |
Accounts receivable | For the year ended December 31, December 31, 2019 2018 Trade receivables $ 1,297,792 $ - Other receivables 86,523 61,279 1,384,315 61,279 Allowance for doubtful accounts - - Net accounts receivable 1,384,315 61,279 |
Deposits (Tables)
Deposits (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Deposits [Abstract] | |
Deposits | For the year ended December 31, December 31, 2019 2018 Building $ 43,309 $ 43,310 Aircraft 492,245 517,031 535,554 560,341 |
Property and equipment (Tables)
Property and equipment (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property and equipment | Cost Accumulated Net book For the period ended December 31, 2019 Base amortization value Survey equipment $ 892,637 $ 646,953 $ 245,684 Computers and software 1,265,045 1,219,045 46,000 Furniture and other equipment 528,419 509,146 19,273 Leasehold improvements 965,108 598,418 366,690 3,651,209 2,973,562 677,647 Cost Accumulated Net book For the period ended December 31, 2018 Base amortization value Survey equipment $ 684,890 $ 628,037 $ 56,853 Computers and software 1,256,101 1,201,047 55,054 Furniture and other equipment 528,420 504,328 24,092 Leasehold improvements 1,165,108 617,950 547,158 3,634,519 2,951,362 683,157 |
Right of use assets (Tables)
Right of use assets (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Right Of Use Assets | |
Right of use assets | Cost Accumulated Right of For the period ended December 31, 2019 Base Amortization Use Aircraft $ 1,578,774 $ 256,778 $ 1,321,996 Office Building 1,799,626 197,426 1,602,200 Printer 17,794 3,973 13,821 Office equipment 139,725 13,973 125,752 3,535,919 472,150 3,063,769 |
Intellectual property (Tables)
Intellectual property (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intellectual property | For the year ended December 31, December 31, 2019 2018 Intellectual property acquired $ 25,271,000 $ 25,271,000 Accumulated amortization (7,300,933 ) (5,616,200 ) 17,970,067 19,654,800 |
Accounts payable and accrued _2
Accounts payable and accrued liabilities (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Payables and Accruals [Abstract] | |
Accounts payable and accrued liabilities | For the year ended December 31, December 31, 2019 2018 Accrued liabilities related to: Consultants and professional fees $ 311,635 $ 151,427 Board of Directors' fees - 22,500 Deferred gain on sale of aircraft (current) - 155,301 Payroll (wages payable and vacation pay) 106,529 47,271 418,164 376,499 Trade payables and other 30,764 123,036 448,928 499,535 |
Contract obligations (Tables)
Contract obligations (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Contract with Customer, Liability [Abstract] | |
Contract obligations | For the year ended December 31, December 31, 2019 2018 Contract obligations $ 131,386 $ - |
Asset retirement obligation (Ta
Asset retirement obligation (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Asset Retirement Obligation [Abstract] | |
Asset retirement obligation | 2019 2018 ARO balance, beginning of the year $ 26,778 $ 56,702 Accretion expense 2,068 2,069 Costs incurred (7,365 ) - Change in ARO estimates - (31,993 ) ARO balance, end of the year 21,481 26,778 |
Lease obligation (Tables)
Lease obligation (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Lease obligations | December 31, December 31, 2019 2018 Aircraft $ 1,680,103 $ - Office Building 1,669,953 - Printer 13,573 - Office equipment 42,515 85,118 3,406,144 85,118 Current Portion of lease obligations (736,408 ) (42,603 ) Long-term lease obligations 2,669,736 42,515 |
Maturity of lease liabilities | Maturity of lease liabilities: 2020 $ 1,057,776 2021 1,018,789 2022 587,536 2023 367,185 2024 367,185 After 2024 799,333 Total lease payments 4,197,804 Less imputed lease payments (791,660 ) Total discounted lease payments 3,406,144 Current portion of lease obligations (736,408 ) Non-current portion of lease obligations 2,669,736 |
Commitments (Tables)
Commitments (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future minimum lease payments | For the fiscal period ending December 31, Office Premises 2020 $ 222,069 2021 222,501 2022 222,501 2023 222,501 2024 222,501 1,112,073 2025 166,876 1,278,949 |
Common shares (Tables)
Common shares (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Shareholders' equity: | |
Common shares | For the Year Ended 31-Dec-19 31-Dec-18 # of shares $ amount # of shares $ amount As at the beginning of the year 68,573,558 $ 96,656,248 58,161,133 $ 88,121,286 Shares retired during the year (4,166,667 ) (1,343,184 ) - - Shares issued during the year: Issuance of Common Stock on the Private Placement - - 10,264,946 8,387,451 Exercise of stock options - - 6,667 5,067 Transfer from contributed capital on the exercise of stock options - - - 6,441 Finder’s fee - - 140,812 136,003 As at the end of the period 64,406,891 95,313,064 68,573,558 96,656,248 For the Year Ended 31-Dec-17 # of shares $ amount As at the beginning of the year 53,856,509 $ 85,966,393 Shares issued during the year: Exercise of stock options 7,334 5,710 Rights Offering, net of issue costs 4,187,290 2,029,867 Stock options proceeds receivable - 30,285 Shares for Debt 110,000 89,031 As at the end of the period 58,161,133 88,121,286 |
Earnings (loss) per share (Tabl
Earnings (loss) per share (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Earnings (loss) per share | 2019 2018 2017 Comprehensive income (loss) for the year $ 3,772,908 $ (6,968,511 ) $ (8,970,398 ) Weighted average number of shares outstanding for the year: Basic 68,156,059 65,455,325 54,523,113 Diluted 68,156,059 65,455,325 54,523,113 Net Income (loss) per share – Basic $ 0.06 $ (0.11 ) $ (0.16 ) Net Income (loss) per share – Diluted $ 0.06 $ (0.11 ) $ (0.16 ) |
Share based compensation (Table
Share based compensation (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Stock options outstanding | Average remaining Exercise price # of options #of options contractual per share outstanding exercisable life (in years) $ 0.52 100,000 100,000 4.5 $ 0.59 150,000 100,000 3.8 $ 1.35 236,900 236,900 0.0 $ 1.45 37,500 37,500 2.0 $ 1.48 37,500 37,500 1.5 $ 1.50 50,000 50,000 1.6 $ 1.57 30,000 30,000 0.1 $ 1.73 92,600 92,600 0.9 $ 1.82 135,000 135,000 0.8 $ 2.10 300,000 300,000 0.7 1,169,500 1,119,500 1.4 |
Stock option activity | For the year ended For the year ended December 31, 2019 December 31, 2018 weighted weighted # of stock average # of stock average options exercise price options exercise price Options outstanding, start of the period 1,297,000 $1.58 1,648,667 $1.60 Granted 100,000 $0.52 1,150,000 $1.06 Exercised - - (6,667 ) $0.76 Expired (47,500 ) $(1.51) (65,000 ) $1.17 Forfeited (180,000 ) $(1.70) (1,430,000 ) $1.21 Options outstanding, end of the period 1,169,500 $1.48 1,297,000 $1.58 Options exercisable, end of the period 1,119,500 $1.52 1,197,000 $1.67 |
Weighted average assumptions | For the period ended 2019 2018 2017 Expected dividends paid per common share Nil Nil Nil Expected life in years 5.0 5.0 - Expected volatility in the price of common shares 65% 65% - Risk free interest rate 1.68% 1.75% - Weighted average fair market value per share at grant date $0.52 $1.06 $- Intrinsic (or “in-the-money”) value per share of options exercised $- $0.59 $- |
Income tax expense (Tables)
Income tax expense (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income tax expense | 2019 2018 2017 Net loss before income taxes $ 3,772,908 $ (6,968,551 ) $ (8,894,853 ) Canadian statutory income tax rate 26.5% 27.0% 27.0% Income tax (recovery) at statutory income tax rate 999,821 (1,881,509 ) (2,401,610 ) Effect of non- deductible expenses and other items: Stock-based compensation and other expenses 11,609 99,919 156,966 Change in statutory tax rates 918,821 - 962,486 Foreign exchange adjustments 82,433 (131,555 ) 110,121 Foreign tax credit benefit - - - Non-taxable portion of capital gain - - (50,525 ) Other 43,592 (221,978 ) 91,668 2,056,276 (2,135,123 ) (1,130,894 ) Change in valuation allowance (2,056,276 ) 2,135,123 1,130,894 - - - Income taxes in foreign jurisdictions - - 75,545 Income tax expense (recovery) - - 75,545 |
Valuation allowance | 2019 2018 2017 Net operating losses carried forward: Canada (expiration dates 2027 to 2039) $ 6,840,817 $ 9,563,701 $ 8,180,209 USA (expiration dates 2020 to 2026) 1,494,711 1,569,976 1,443,729 Timing differences on property & equipment and financing costs 1,810,789 2,109,557 2,012,709 SRED Expenditures 348,341 396,020 215,303 Foreign Tax Credit 285,772 371,133 371,133 10,780,430 14,010,387 12,223,083 Intellectual property (4,133,115 ) (5,306,796 ) (5,761,674 ) 6,647,315 8,703,591 6,461,409 Less valuation allowance (6,647,315 ) (8,703,591 ) (6,461,409 ) |
Change in non-cash working ca_2
Change in non-cash working capital (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Change In Non-cash Working Capital | |
Change in non-cash working capital | For the year ended December 31 2019 2018 2017 Accounts receivable $ (1,339,408 ) $ (1,252 ) $ (61,657 ) Note receivable (332,175 ) - - Prepaid expenses and deposits (31,973 ) 42,204 59,439 Accounts payable and accrued liabilities 104,745 (899,122 ) 986,533 Deferred gain - - (155,301 ) Contractual obligations 134,116 - - (1,464,695 ) (858,170 ) 829,014 Portion attributable to: Operating activities (1,464,695 ) (858,170 ) 829,014 Financing activities - - - Investing activities - - - (1,464,695 ) (858,170 ) 829,014 |
Geographic information (Tables)
Geographic information (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Segments, Geographical Areas [Abstract] | |
Revenues derived by geographic area | 2019 2018 2017 Nigeria $ 11,976,149 $ - $ - 11,976,149 - - |
Survey expenses (Tables)
Survey expenses (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Survey Expenses Tables | |
Survey expenses | 2019 2018 2017 Aircraft Operations Charter Hire Revenue Earned $ (613,038 ) $ (698,211 ) $ (470,982 ) Lease payments 400,847 454,729 304,410 Operating Expenses 1,459,536 1,347,428 1,084,432 1,247,345 1,103,946 917,860 Survey Projects 1,363,741 - 371,569 2,611,086 1,103,946 1,289,429 |
Other related party transacti_2
Other related party transactions (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
Other related party transactions | 2019 2018 2017 Legal Fees $ 276,261 $ 249,218 $ 172,199 |
Significant accounting polici_4
Significant accounting policies (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Computer Hardware | |
Annual rates and methods of depriciation | 30% declining balance |
Aircraft | |
Annual rates and methods of depriciation | 10% declining balance |
Furniture and Other Equipment | |
Annual rates and methods of depriciation | 20% declining balance |
Leasehold Improvements | |
Annual rates and methods of depriciation | 10% declining balance |
Significant accounting polici_5
Significant accounting policies (Details 1) - CAD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Property and equipment | $ 677,647 | $ 683,157 |
Right of use | 3,063,769 | 0 |
Total Assets | 30,692,941 | 25,264,268 |
Accounts payable and accrued liabilities | 448,928 | 499,535 |
Current portion of lease obligations | 736,408 | 42,603 |
Long-term lease obligations | 2,669,736 | 42,515 |
Other liabilities | 0 | 441,368 |
Total liabilities and shareholders' equity | $ 30,692,941 | 25,264,268 |
As Reported | ||
Property and equipment | 683,157 | |
Right of use | 0 | |
Total Assets | 25,264,268 | |
Accounts payable and accrued liabilities | 499,535 | |
Current portion of capital lease obligations | 42,603 | |
Current portion of lease obligations | 0 | |
Capital lease obligations | 42,515 | |
Long-term lease obligations | 0 | |
Other liabilities | 362,368 | |
Deferred charges | 79,000 | |
Total liabilities and shareholders' equity | 25,264,268 | |
Adjustments | ||
Property and equipment | (139,725) | |
Right of use | 3,535,919 | |
Total Assets | 3,396,194 | |
Accounts payable and accrued liabilities | (155,301) | |
Current portion of capital lease obligations | (42,603) | |
Current portion of lease obligations | 672,087 | |
Capital lease obligations | (42,515) | |
Long-term lease obligations | 3,405,894 | |
Other liabilities | (362,368) | |
Deferred charges | (79,000) | |
Total liabilities and shareholders' equity | 3,396,194 | |
Balance on Adoption | ||
Property and equipment | 543,432 | |
Right of use | 3,535,919 | |
Total Assets | 28,660,462 | |
Accounts payable and accrued liabilities | 344,234 | |
Current portion of capital lease obligations | 0 | |
Current portion of lease obligations | 672,087 | |
Capital lease obligations | 0 | |
Long-term lease obligations | 3,405,894 | |
Other liabilities | 0 | |
Deferred charges | 0 | |
Total liabilities and shareholders' equity | $ 28,660,462 |
Short-term investments (Details
Short-term investments (Details) - CAD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Short-term investments | $ 3,781,512 | $ 3,900,000 |
Less than 90 Days | ||
Short-term investments | 1,754,302 | 0 |
91 to 183 Days | ||
Short-term investments | 1,218,724 | 0 |
183 days to One Year | ||
Short-term investments | $ 808,486 | $ 3,900,000 |
Accounts receivable (Details)
Accounts receivable (Details) - CAD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Accounts Receivable, after Allowance for Credit Loss [Abstract] | ||
Trade receivables | $ 1,297,792 | $ 0 |
Other receivables | 86,523 | 61,279 |
Accounts receivable, gross | 1,384,315 | 61,279 |
Allowance for doubtful accounts | 0 | 0 |
Accounts receivable, net | $ 1,384,315 | $ 61,279 |
Deposits (Details)
Deposits (Details) - CAD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Security deposits | $ 535,554 | $ 560,341 |
Building | ||
Security deposits | 43,309 | 43,310 |
Aircraft | ||
Security deposits | $ 492,245 | $ 517,031 |
Property and equipment (Details
Property and equipment (Details) - CAD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Property and equipment, gross | $ 3,651,209 | $ 3,634,519 |
Accumulated amortization | 2,973,562 | 2,951,362 |
Property and equipment, net | 677,647 | 683,157 |
Survey Equipment | ||
Property and equipment, gross | 892,637 | 684,890 |
Accumulated amortization | 646,953 | 628,037 |
Property and equipment, net | 245,684 | 56,853 |
Computers and Software | ||
Property and equipment, gross | 1,265,045 | 1,256,101 |
Accumulated amortization | 1,219,045 | 1,201,047 |
Property and equipment, net | 46,000 | 55,054 |
Furniture and Other Equipment | ||
Property and equipment, gross | 528,419 | 528,420 |
Accumulated amortization | 509,146 | 504,328 |
Property and equipment, net | 19,273 | 24,092 |
Leasehold Improvements | ||
Property and equipment, gross | 965,108 | 1,165,108 |
Accumulated amortization | 598,418 | 617,950 |
Property and equipment, net | $ 366,690 | $ 547,158 |
Right of use assets (Details)
Right of use assets (Details) - CAD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Right of use assets, gross | $ 3,535,919 | |
Accumulated amortization | 472,150 | |
Right of use assets, net | 3,063,769 | $ 0 |
Aircraft | ||
Right of use assets, gross | 1,578,774 | |
Accumulated amortization | 256,778 | |
Right of use assets, net | 1,321,996 | |
Office Building | ||
Right of use assets, gross | 1,799,626 | |
Accumulated amortization | 197,426 | |
Right of use assets, net | 1,602,200 | |
Printer | ||
Right of use assets, gross | 17,794 | |
Accumulated amortization | 3,973 | |
Right of use assets, net | 13,821 | |
Office Equipment | ||
Right of use assets, gross | 139,725 | |
Accumulated amortization | 13,973 | |
Right of use assets, net | $ 125,752 |
Intellectual property (Details)
Intellectual property (Details) - CAD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Intellectual property acquired | $ 25,271,000 | $ 25,271,000 |
Accumulated amortization and impairment | (7,300,933) | (5,616,200) |
Intellectual property, net | $ 17,970,067 | $ 19,654,800 |
Intellectual property (Details
Intellectual property (Details Narrative) | 12 Months Ended |
Dec. 31, 2019CAD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Fair value of consideration | $ 25,300,000 |
Estimated useful life of asset | 15 years |
Annual amortization expense 2020 | $ 1,700,000 |
Annual amortization expense 2021 | 1,700,000 |
Annual amortization expense 2022 | 1,700,000 |
Annual amortization expense 2023 | 1,700,000 |
Annual amortization expense 2024 | $ 1,700,000 |
Accounts payable and accrued _3
Accounts payable and accrued liabilities (Details) - CAD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Accrued liabilities | $ 418,164 | $ 376,499 |
Trade payables and other | 30,764 | 123,036 |
Accounts payable and accrued liabilities | 448,928 | 499,535 |
Consultants and Professional Fees | ||
Accrued liabilities | 311,635 | 151,427 |
Board of Directors' Fees | ||
Accrued liabilities | 0 | 22,500 |
Deferred Gain on Sale of Aircraft (Current) | ||
Accrued liabilities | 0 | 155,301 |
Payroll (Wages Payable and Vacation Pay) | ||
Accrued liabilities | $ 106,529 | $ 47,271 |
Capital lease obligation (Detai
Capital lease obligation (Details) - CAD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Contract with Customer, Liability [Abstract] | ||
Contract obligations | $ 131,386 | $ 0 |
Asset retirement obligation (De
Asset retirement obligation (Details) - CAD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Asset Retirement Obligation [Abstract] | ||
Asset retirement obligation, beginning | $ 26,778 | $ 56,702 |
Accretion expense | 2,068 | 2,069 |
Costs incurred | (7,365) | 0 |
Change in ARO estimates | 0 | (31,993) |
Asset retirement obligation, ending | $ 21,481 | $ 26,778 |
Asset retirement obligation (_2
Asset retirement obligation (Details Narrative) | 12 Months Ended |
Dec. 31, 2019CAD ($) | |
Asset Retirement Obligation [Abstract] | |
Estimated future liability | $ 22,000 |
Inflation rate | 2.00% |
Risk-free interest rate | 2.50% |
Lease obligation (Details)
Lease obligation (Details) - CAD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Lease obligations | $ 3,406,144 | $ 85,118 |
Current portion of lease obligations | (736,408) | (42,603) |
Long-term lease obligations | 2,669,736 | 42,515 |
Aircraft | ||
Lease obligations | 1,680,103 | 0 |
Office Building | ||
Lease obligations | 1,669,953 | 0 |
Printer | ||
Lease obligations | 13,573 | 0 |
Office Equipment | ||
Lease obligations | $ 42,515 | $ 85,118 |
Lease obligation (Details 1)
Lease obligation (Details 1) - CAD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Leases [Abstract] | ||
2020 | $ 1,057,776 | |
2021 | 1,018,789 | |
2022 | 587,536 | |
2023 | 367,185 | |
2024 | 367,185 | |
After 2024 | 799,333 | |
Total lease payments | 4,197,804 | |
Less imputed lease payments | (791,660) | |
Total discounted lease payments | 3,406,144 | $ 85,118 |
Current portion of lease obligations | (736,408) | (42,603) |
Non-current portion of lease obligations | $ 2,669,736 | $ 42,515 |
Commitments and contingencies (
Commitments and contingencies (Details) | Dec. 31, 2019CAD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2020 | $ 222,069 |
2021 | 222,501 |
2022 | 222,501 |
2023 | 222,501 |
2024 | 222,501 |
Estimated future minimum annual commitment | 1,112,073 |
2025 | 166,876 |
Total leases payments due | $ 1,278,949 |
Common shares (Details)
Common shares (Details) - CAD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Beginning balance | $ 24,211,469 | $ 21,577,409 | $ 27,811,559 |
Shares purchased and retired during the year | $ (1,343,184) | ||
Issuance of common stock on private placement | $ 8,387,451 | ||
Issued upon exercise of stock options, shares | 0 | 6,667 | |
Transfer from contributed capital upon exercise of stock options | $ 0 | ||
Rights offering & finders fee | 136,003 | 2,029,867 | |
Ending balance | $ 26,685,002 | $ 24,211,469 | $ 21,577,409 |
Common Shares | |||
Beginning balance, shares | 68,573,558 | 58,161,133 | 53,856,509 |
Beginning balance | $ 96,656,248 | $ 88,121,286 | $ 85,966,393 |
Shares purchased and retired during the year, shares | (4,166,667) | ||
Shares purchased and retired during the year | $ (1,343,184) | ||
Issuance of common stock on private placement, shares | 10,264,946 | ||
Issuance of common stock on private placement | $ 8,387,451 | ||
Issued upon exercise of stock options, shares | 6,667 | 7,334 | |
Issued upon exercise of stock options | $ 5,067 | $ 5,710 | |
Transfer from contributed capital upon exercise of stock options | $ 6,441 | ||
Rights offering & finders fee, shares | 140,812 | 4,187,290 | |
Rights offering & finders fee | $ 136,003 | $ 2,029,867 | |
Stock options proceeds receivable | $ 30,285 | ||
Shares for debt, shares | 110,000 | ||
Shares for debt | $ 89,031 | ||
Ending balance, shares | 64,406,891 | 68,573,558 | 58,161,133 |
Ending balance | $ 95,313,064 | $ 96,656,248 | $ 88,121,286 |
Earnings (loss) per share (Deta
Earnings (loss) per share (Details) - CAD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |||
Comprehensive income (loss) for the year | $ 3,772,908 | $ (6,968,511) | $ (8,970,938) |
Weighted average number of shares outstanding for the year | |||
Basic | 68,156,059 | 65,455,325 | 54,523,113 |
Diluted | 68,156,059 | 65,455,325 | 54,523,113 |
Net income (loss) per share - basic | $ 0.06 | $ (0.11) | $ (0.16) |
Net income (loss) per share - diluted | $ 0.06 | $ (0.11) | $ (0.16) |
Share based compensation (Detai
Share based compensation (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Exercise price | $ 1.48 | $ 1.58 | $ 1.60 |
Number of stock options outstanding | 1,169,500 | 1,297,000 | 1,648,667 |
Number of stock options exercisable | 1,119,500 | 1,197,000 | |
Average remaining contractual life (years) | 1 year 4 months 24 days | ||
Option 1 | |||
Exercise price | $ 0.52 | ||
Number of stock options outstanding | 100,000 | ||
Number of stock options exercisable | 100,000 | ||
Average remaining contractual life (years) | 4 years 6 months | ||
Option 2 | |||
Exercise price | $ 0.59 | ||
Number of stock options outstanding | 150,000 | ||
Number of stock options exercisable | 100,000 | ||
Average remaining contractual life (years) | 3 years 9 months 18 days | ||
Option 3 | |||
Exercise price | $ 1.35 | ||
Number of stock options outstanding | 236,900 | ||
Number of stock options exercisable | 236,900 | ||
Average remaining contractual life (years) | 0 years | ||
Option 4 | |||
Exercise price | $ 1.45 | ||
Number of stock options outstanding | 37,500 | ||
Number of stock options exercisable | 37,500 | ||
Average remaining contractual life (years) | 2 years | ||
Option 5 | |||
Exercise price | $ 1.48 | ||
Number of stock options outstanding | 37,500 | ||
Number of stock options exercisable | 37,500 | ||
Average remaining contractual life (years) | 1 year 6 months | ||
Option 6 | |||
Exercise price | $ 1.50 | ||
Number of stock options outstanding | 50,000 | ||
Number of stock options exercisable | 50,000 | ||
Average remaining contractual life (years) | 1 year 7 months 6 days | ||
Option 7 | |||
Exercise price | $ 1.57 | ||
Number of stock options outstanding | 30,000 | ||
Number of stock options exercisable | 30,000 | ||
Average remaining contractual life (years) | 1 month 6 days | ||
Option 8 | |||
Exercise price | $ 1.73 | ||
Number of stock options outstanding | 92,600 | ||
Number of stock options exercisable | 92,600 | ||
Average remaining contractual life (years) | 10 months 24 days | ||
Option 9 | |||
Exercise price | $ 1.82 | ||
Number of stock options outstanding | 135,000 | ||
Number of stock options exercisable | 135,000 | ||
Average remaining contractual life (years) | 9 months 18 days | ||
Option 10 | |||
Exercise price | $ 2.10 | ||
Number of stock options outstanding | 300,000 | ||
Number of stock options exercisable | 300,000 | ||
Average remaining contractual life (years) | 8 months 12 days |
Share based compensation (Det_2
Share based compensation (Details 1) - $ / shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Number of stock options | ||
Outstanding, beginning | 1,297,000 | 1,648,667 |
Granted | 100,000 | 1,150,000 |
Exercised | 0 | (6,667) |
Expired | (47,500) | (65,000) |
Forfeited | (180,000) | (1,430,000) |
Outstanding, ending | 1,169,500 | 1,297,000 |
Exercisable | 1,119,500 | 1,197,000 |
Weighted average exercise price | ||
Outstanding, beginning | $ 1.58 | $ 1.60 |
Granted | .52 | 1.06 |
Exercised | .00 | 0.76 |
Expired | (1.51) | 1.17 |
Forfeited | (1.70) | 1.21 |
Outstanding, ending | 1.48 | 1.58 |
Exercisable | $ 1.52 | $ 1.67 |
Share based compensation (Det_3
Share based compensation (Details 2) - $ / shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Payment Arrangement [Abstract] | |||
Expected dividends paid per common share | 0.00% | 0.00% | 0.00% |
Expected life in years | 5 years | 5 years | 0 years |
Expected volatility in the price of common shares | 65.00% | 65.00% | 0.00% |
Risk free interest rate | 1.68% | 1.75% | 0.00% |
Weighted average fair market value per share at grant date | $ .52 | $ 1.06 | $ .00 |
Intrinsic (or "in-the-money") value per share of options exercised | $ .00 | $ .59 | $ 0 |
Share based compensation (Det_4
Share based compensation (Details Narrative) | Dec. 31, 2019CAD ($) |
Share-based Payment Arrangement [Abstract] | |
Unamortized non-vested portion of stock options | $ 12,582 |
Income tax expense (Details)
Income tax expense (Details) - CAD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Net loss before income taxes | $ 3,772,908 | $ (6,968,551) | $ (8,894,853) |
Canadian statutory income tax rate | 26.50% | 27.00% | 27.00% |
Income tax (recovery) at statutory income tax rate | $ 999,821 | $ (1,881,509) | $ (2,401,610) |
Effect of non-deductible expenses and other items: | |||
Stock-based compensation and other expenses | 11,609 | 99,919 | 156,966 |
Change in statutory tax rates | 918,821 | 0 | 962,486 |
Foreign exchange adjustment | 82,433 | (131,555) | 110,121 |
Foreign tax credit benefit | 0 | 0 | 0 |
Non-taxable portion of capital gain | 0 | 0 | (50,525) |
Other | 43,592 | (221,978) | 91,668 |
Effective income tax rate reconciliation, nondeductible expense | 2,056,276 | (2,135,123) | (1,130,894) |
Change in valuation allowance | (2,056,276) | 2,135,123 | 1,130,894 |
Income tax expense (recovery) deferred | 0 | 0 | 0 |
Income taxes in foreign jurisdictions | 0 | 0 | 75,545 |
Income tax expense (recovery) | $ 0 | $ 0 | $ 75,545 |
Income tax expense (Details 1)
Income tax expense (Details 1) - CAD ($) | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Timing differences on property and equipment and financing costs | $ 1,810,789 | $ 2,109,557 | $ 2,012,709 |
SRED expenditures | 348,341 | 396,020 | 215,303 |
Foreign tax credit | 285,772 | 371,133 | 371,133 |
Total operating loss carryforwards | 10,780,430 | 14,010,387 | 12,223,083 |
Intellectual property | (4,133,115) | (5,306,796) | (5,761,674) |
Deferred tax assets, operating loss carryforwards | 6,647,315 | 8,703,591 | 6,461,409 |
Less valuation allowance | (6,647,315) | (8,703,591) | (6,461,409) |
Canada | |||
Net operating losses carried forward | 6,840,817 | 9,563,701 | 8,180,209 |
USA | |||
Net operating losses carried forward | $ 1,494,711 | $ 1,569,976 | $ 1,443,729 |
Income tax expense (Details Nar
Income tax expense (Details Narrative) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Federal tax rate | 21.00% |
Change in non-cash working ca_3
Change in non-cash working capital (Details) - CAD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Change In Non-cash Working Capital | |||
Accounts receivable | $ (1,339,408) | $ (1,252) | $ (61,657) |
Note receivable | (332,175) | 0 | 0 |
Prepaid expenses and deposits | (31,973) | 42,204 | 59,439 |
Accounts payable and accrued liabilities | 104,745 | (899,122) | 986,533 |
Deferred gain | 0 | 0 | (155,301) |
Contractual obligations | 134,116 | 0 | 0 |
Change in non-cash working capital balances | (1,464,695) | (858,170) | 829,014 |
Portion attributable to: | |||
Operating activities | (1,464,695) | (858,170) | 829,014 |
Financing activities | 0 | 0 | 0 |
Investing activities | 0 | 0 | 0 |
Total | $ (1,464,695) | $ (858,170) | $ 829,014 |
Geographic information (Details
Geographic information (Details) - CAD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenue | $ 11,976,149 | $ 0 | $ 0 |
Nigeria | |||
Revenue | $ 11,976,149 | $ 0 | $ 0 |
Survey expenses (Details)
Survey expenses (Details) - CAD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Aircraft Operations | |||
Charter hire revenue earned | $ (613,038) | $ (698,211) | $ (470,982) |
Lease payments | 400,847 | 454,729 | 304,410 |
Operating expenses | 1,459,536 | 1,347,428 | 1,084,432 |
Aircraft operations expense | 1,247,345 | 1,103,946 | 917,860 |
Survey projects | 1,363,741 | 0 | 371,569 |
Total survey expenses | $ 2,611,086 | $ 1,103,946 | $ 1,289,429 |
Other related party transacti_3
Other related party transactions (Details) - CAD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |||
Legal fees | $ 276,261 | $ 249,218 | $ 172,199 |
Other related party transacti_4
Other related party transactions (Details Narrative) - CAD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Related Party Transactions [Abstract] | ||
Accounts payable and accrued liabilities | $ 146,197 | $ 5,999 |
Re-imbursement of expenses | $ 0 | $ 7,461 |