Exhibit 99.1
NXT ENERGY SOLUTIONS INC.
Unaudited Condensed Consolidated Interim Financial Statements
For the three and nine month periods ended
September 30, 2020
NXT ENERGY SOLUTIONS INC.
Condensed Consolidated Interim Balance Sheets
(Unaudited-Expressed in Canadian dollars)
September 30, | December 31, | |
2020 | 2019 | |
Current assets | ||
Cash and cash equivalents | $2,647,375 | $2,858,245 |
Short-term investments | 1,408,509 | 3,781,512 |
Accounts receivable | 881,523 | 1,384,315 |
Note receivable (Note 3) | - | 324,700 |
Prepaid expenses | 147,072 | 97,132 |
5,084,479 | 8,445,904 | |
Long term assets | ||
Deposits | 550,555 | 535,554 |
Property and equipment | 731,266 | 677,647 |
Right of use Assets | 2,554,446 | 3,063,769 |
Intellectual property (Note 4) | 16,706,517 | 17,970,067 |
$25,627,263 | $30,692,941 | |
Liabilities and Shareholders' Equity | ||
Current liabilities | ||
Accounts payable and accrued liabilities (Note 5) | $338,705 | $448,928 |
Contract Obligations (Note 6) | - | 131,386 |
Current portion of capital lease obligation (Note 7) | 754,709 | 736,408 |
1,093,414 | 1,316,722 | |
Long-term liabilities | ||
Long-term lease obligation (Note 7) | 2,096,874 | 2,669,736 |
Asset retirement obligation | 22,224 | 21,481 |
2,119,098 | 2,691,217 | |
3,212,512 | 4,007,939 | |
Commitments (Note 8) Future operations (Note 1) | ||
Shareholders' equity | ||
Common shares (Note 9): - authorized unlimited | ||
Issued: 64,406,891 (2019 - 64,406,891) common shares | 95,313,064 | 95,313,064 |
Contributed capital | 9,350,708 | 9,306,493 |
Deficit | (82,959,955) | (78,645,489) |
Accumulated other comprehensive income | 710,934 | 710,934 |
22,414,751 | 26,685,002 | |
$25,627,263 | $30,692,941 |
Signed "George Liszicasz"
Signed "Bruce G. Wilcox"
Director
Director
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
[1]
NXT ENERGY SOLUTIONS INC.
Condensed Consolidated Interim Statements of Income (Loss) and Comprehensive Income (Loss)
(Unaudited-Expressed in Canadian dollars)
For the three months ended September 30, | For the nine months ended September 30, | |||
2020 | 2019 | 2020 | 2019 | |
Revenue | ||||
Survey revenue (Note 14) | $- | $1,021,532 | $136,566 | $11,976,149 |
Expenses | ||||
Survey costs, net | 253,188 | 512,599 | 787,034 | 2,302,712 |
General and administrative expenses | 707,640 | 881,716 | 2,484,621 | 2,570,866 |
Stock based compensation expense | 35,384 | 64,983 | 64,574 | 72,533 |
Amortization expense | 445,123 | 445,315 | 1,335,684 | 1,332,166 |
1,441,335 | 1,904,613 | 4,671,913 | 6,278,277 | |
Other expenses (income) | ||||
Interest expense (income), net | (36) | (9,348) | (17,045) | (2,232) |
Foreign exchange loss (gain) | 60,417 | (106,255) | (213,110) | 134,095 |
Intellectual property and other expenses | 740 | 6,895 | 9,274 | 17,814 |
61,121 | (108,708) | (220,881) | 149,677 | |
Income (loss) before income taxes | (1,502,456) | (774,373) | (4,314,466) | 5,548,195 |
Income tax expense | - | - | - | - |
Net income (loss) and comprehensive income (loss) | (1,502,456) | (774,373) | (4,314,466) | 5,548,195 |
Net loss (income) per share (Note 10) | ||||
Basic | $(0.02) | $(0.01) | $(0.07) | $0.08 |
Diluted | $(0.02) | $(0.01) | $(0.07) | $0.08 |
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
[2]
NXT ENERGY SOLUTIONS INC.
Condensed Consolidated Interim Statements of Cash Flows
(Unaudited-Expressed in Canadian dollars)
For the three months ended September 30, | For the nine months ended September 30, | |||
2020 | 2019 | 2020 | 2019 | |
Cash provided by (used in): | ||||
Operating activities | ||||
Net income (loss) for the period | $(1,502,456) | $(774,373) | $(4,314,466) | $5,548,195 |
Items not affecting cash: | ||||
Stock based compensation expense (Note 11) | 35,384 | 64,983 | 64,574 | 72,533 |
Amortization expense | 445,123 | 445,315 | 1,335,684 | 1,332,166 |
Non-cash changes to asset retirement obligation | 517 | 514 | 1,552 | 1,551 |
Non-cash lease and interest | (42,826) | (42,825) | (128,476) | (128,474) |
Unrealized Foreign exchange | 49,990 | (211,897) | (19,859) | 6,962 |
Change in non-cash working capital balances (Note 13) | 185,118 | 4,465,807 | 535,870 | (4,153,019) |
ARO liabilities settled | - | - | (809) | - |
673,306 | 4,721,897 | 1,788,536 | (2,868,281) | |
Net cash used in operating activities | (829,150) | 3,947,524 | (2,525,930) | 2,679,914 |
Financing activities | ||||
Repayment of capital lease obligation | - | (10,735) | (42,515) | (31,666) |
Net cash used in financing activities | - | (10,735) | (42,515) | (31,666) |
Investing activities | ||||
Purchase of property and equipment, net | - | (216,691) | - | (216,691) |
Decrease (increase) in short-term investments and Deposits | 1,523,724 | (2,314,472) | 2,387,450 | (214,472) |
Net cash from (used in) investing activities | 1,523,724 | (2,531,163) | 2,387,450 | (431,163) |
Effect of foreign exchange rate changes | 7,438 | 103,688 | (29,875) | 109,048 |
Net increase (decrease) in cash and cash equivalents | 702,013 | 1,509,314 | (210,870) | 2,326,133 |
Cash and cash equivalents, beginning of the period | 1,945,362 | 1,156,351 | 2,858,245 | 339,532 |
Cash and cash equivalents, end of the period | $2,647,375 | $2,665,665 | $2,647,375 | $2,665,665 |
Supplemental information | ||||
Cash interest (received) | $(25,996) | $(24,523) | $(48,437) | $(56,913) |
Cash taxes paid | - | - | - | - |
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
[3]
NXT ENERGY SOLUTIONS INC.
Condensed Consolidated Interim Statements of Shareholders' Equity
(Unaudited-Expressed in Canadian dollars)
For the three months ending | For the nine months ending | |||
September 30, | September 30, | |||
2020 | 2019 | 2020 | 2019 | |
Common Shares | ||||
Balance at beginning of the period (Note 9) | $95,313,064 | $96,656,248 | $95,313,064 | $96,656,248 |
Balance at end of the period | 95,313,064 | 96,656,248 | 95,313,064 | 96,656,248 |
Contributed Capital | ||||
Balance at beginning of the period | 9,335,683 | 9,270,234 | 9,306,493 | 9,262,684 |
Recognition of stock based compensation expense | 15,025 | 64,983 | 44,215 | 72,533 |
Balance at end of the period | 9,350,708 | 9,335,217 | 9,350,708 | 9,335,217 |
Deficit | ||||
Balance at beginning of the period | (81,457,499) | (76,095,829) | (78,645,489) | (82,418,397) |
Net income (loss) and comprehensive income (loss) | (1,502,456) | (774,373) | (4,314,466) | 5,548,195 |
Accumulated Other Comprehensive income | ||||
Balance at end of the period | (82,959,955) | (76,870,202) | (82,959,955) | (76,870,202) |
Balance at beginning and end of the period | 710,934 | 710,934 | 710,934 | 710,934 |
Total Shareholders' Equity at end of the period | $22,414,751 | $29,832,197 | $22,414,751 | $29,832,197 |
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
[4]
NXT ENERGY SOLUTIONS INC.
Notes to the Unaudited Condensed Consolidated Interim Financial Statements
As at and the three and nine month periods ended September 30, 2020
(Expressed in Canadian dollars unless otherwise stated)
1. 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 condensed consolidated interim financial statements of NXT have been prepared by management in accordance with U.S. GAAP. The accounting policies applied are consistent with those outlined in NXT’s annual audited consolidated financial statements for the year ended December 31, 2019, except as described in Note 2, Significant Accounting Policies and Changes.
These condensed consolidated financial statements reflect adjustments, all of which are normal recurring adjustments that are, in the opinion of management, necessary to reflect fairly the financial position and results of operations for the respective periods. These condensed consolidated financial statements do not include all disclosures required in the annual financial statements and should be read in conjunction with the 2019 audited consolidated financial statements.
These condensed consolidated interim financial statements have been prepared on a going concern basis. The going concern basis of presentation assumes that NXT will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business.
The events described in the following paragraphs highlight that there is substantial doubt about NXT’s ability to continue as a going concern within one year after the date that these financial statements have been issued.
The Company’s current cash position is not expected to be sufficient to meet the Company’s obligations for the 12 month period beyond the date that these financial statements have been issued.
The Company is taking further steps to reduce costs which include payroll, other general and administrative costs, and is evaluating alternatives to reduce other costs. If required, further financing options that may or may not be available to the Company include issuance of new equity, debentures or bank credit facilities. The need for any of these options will be dependent on the timing of securing new contracts and obtaining financing terms that are acceptable to both the Company and the financier.
NXT continues to develop its pipeline of opportunities to secure new revenue contracts. However, the Company’s longer-term success remains dependent upon its ability 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 generate positive cash flow from operations. The occurrence and timing of these events cannot be predicted with certainty.
[5]
NXT ENERGY SOLUTIONS INC.
Notes to the Unaudited Condensed Consolidated Interim Financial Statements
As at and the three and nine month periods ended September 30, 2020
(Expressed in Canadian dollars unless otherwise stated)
The condensed consolidated financial interim statements do not reflect adjustments that would be necessary if the going concern basis was not appropriate. If the going concern basis were not appropriate for these consolidated financial statements, then adjustments would be necessary in the carrying value of the assets and liabilities, the reported revenues and expenses, and the balance sheet classifications used. These adjustments could be material.
Covid-19 (2019-nCoV/COVID-19) Pandemic
As of the date of these condensed consolidated interim financial statements the Covid-19 pandemic continues to be a risk on the operations of the Company. The Company has made provisions so employees can work safely in the office or if necessary from home, suspended all travel, followed all Alberta Services and Health Canada recommendations, and implemented hygiene and physical distancing policies. NXT continues to communicate with employees and customers via available communication methods such as tele-conferences and on-line video conferencing. Demand for our services and prospective revenues may become adversely impacted the longer the Covid-19 pandemic continues. The impact of the continuation of the Covid-19 pandemic may hamper our ability to deliver SFD® surveys contracts in the following ways. If restrictions on international travel continue, our aircraft and personal will not be able to perform surveys. An outbreak of the virus among our staff or our customers’ personnel would delay any survey in progress. Business development may be delayed when in-person meetings and technical presentations may be a superior delivery method to tele-conferences or on-line video conferencing.
The situation is dynamic and the ultimate duration and magnitude of the impact on the economy and the financial effect to the Company is not known at this time. Estimates and judgments made by management in the preparation of these condensed interim consolidated financial statements are subject to a higher degree of measurement uncertainty during this volatile period.
Use of Estimates and Judgements
In preparing these financial statements, NXT is required to make estimates and assumptions that affect both the amount and timing of recording assets, liabilities, revenues and expenses since the determination of these items may be dependent on future events. The Company uses the most current information available and exercises careful judgment in making these estimates and assumptions. In the opinion of management, these condensed consolidated interim financial statements have been properly prepared within reasonable limits of materiality and within the framework of the Company’s significant accounting policies included in the annual audited consolidated financial statements for the year ended December 31, 2019, except as described in Note 2, Significant Accounting Policies and changes.
2. Significant Accounting Policies and Changes
Measurement of credit losses on financial instruments
In June 2016, the FASB issued new guidance that changes how entities measure credit losses for most financial assets and certain other financial instruments that are not measured at fair value through net income. The new guidance amends the impairment model of financial instruments, basing it on expected losses rather than incurred losses. These expected credit losses will be recognized as an allowance rather than as a direct write-down of the amortized cost basis. The new guidance was effective January 1, 2020 and was applied using a modified retrospective approach. The adoption of this new guidance did not have a material impact on the Company's consolidated financial statements.
[6]
NXT ENERGY SOLUTIONS INC.
Notes to the Unaudited Condensed Consolidated Interim Financial Statements
As at and the three and nine month periods ended September 30, 2020
(Expressed in Canadian dollars unless otherwise stated)
Government grants
Government grants are recognized when there is reasonable assurance that the grant will be received, and all attached conditions will be complied with. When the grant relates to an expense item, it is recognized as an expense reduction in the period in which the costs are incurred. Where the grant relates to an asset, it is recognized as a reduction to the net book value of the related asset and then subsequently in net loss over the expected useful life of the related asset through lower charges to depreciation and impairment. During the three and nine month periods ended September 30, 2020, the Company received a government grant through the Canada Emergency Wage Subsidy (“CEWS”). The CEWS was recognized as a reduction to general and administrative expenses.
For the three months | For the nine months | |||
ended September 30, | ended September 30, | |||
2020 | 2019 | 2020 | 2019 | |
Government grants recognized | $121,706 | $- | $227,581 | $- |
3. Note Receivable
On September 6, 2019, NXT and Alberta Green Ventures Limited Partnership (“AGV”) entered into a loan arrangement whereby NXT loaned to AGV US$250,000 for the purpose of providing AGV with additional funds necessary to continue advancing the common objectives of the parties under the Co-operation Agreement and the Sales Representative Agreement. The note receivable was fully collected in the period.
4. Intellectual property
September 30, | December 31, | |
2020 | 2019 | |
Intellectual property acquired | $25,271,000 | $25,271,000 |
Accumulated amortization | (8,564,483) | (7,300,933) |
16,706,517 | 17,970,067 |
[7]
NXT ENERGY SOLUTIONS INC.
Notes to the Unaudited Condensed Consolidated Interim Financial Statements
As at and the three and nine month periods ended September 30, 2020
(Expressed in Canadian dollars unless otherwise stated)
5. Accounts payable and accrued liabilities
September 30, | December 31, | |
2020 | 2019 | |
Accrued liabilities related to: | ||
Consultants and professional fees | $246,238 | $311,635 |
Payroll related | 76,431 | 106,529 |
322,669 | 418,164 | |
Trade payables and other | 16,036 | 30,764 |
338,705 | 448,928 |
6. Contract Obligations
In 2019, the Company received a non-refundable deposit of $100,000USD from AGV to be applied to an SFD® survey which was to be completed by June 30, 2020. The deposit was forfeited by AGV on June 30, 2020 as AGV did not complete a SFD® survey prior to this date.
September 30, | December 31, | |
2020 | 2019 | |
Contract obligations | $- | $131,386 |
[8]
NXT ENERGY SOLUTIONS INC.
Notes to the Unaudited Condensed Consolidated Interim Financial Statements
As at and the three and nine month periods ended September 30, 2020
(Expressed in Canadian dollars unless otherwise stated)
7. Lease obligation
September 30, | December 31, | |
2020 | 2019 | |
Aircraft | $1,339,791 | $1,680,103 |
Office Building | 1,501,189 | 1,669,953 |
Printer | 10,603 | 13,573 |
Office equipment | - | 42,515 |
2,851,583 | 3,406,144 | |
Current Portion of lease obligations | (754,709) | (736,408) |
Long-term lease obligations | 2,096,874 | 2,669,736 |
Maturity of lease liabilities: | |
2020 | $254,697 |
2021 | 1,018,789 |
2022 | 587,536 |
2023 | 367,185 |
2024 | 367,185 |
After 2024 | 773,157 |
Total lease payments | 3,368,549 |
Less imputed interest | (516,966) |
Total discounted lease payments | 2,851,583 |
Current portion of lease obligations | (754,709) |
Non-current portion of lease obligations | 2,096,874 |
In June 2020 the Company exercised an option for an early buy-out option on its office equipment lease for $20,000.
[9]
NXT ENERGY SOLUTIONS INC.
Notes to the Unaudited Condensed Consolidated Interim Financial Statements
As at and the three and nine month periods ended September 30, 2020
(Expressed in Canadian dollars unless otherwise stated)
8. Commitments
The table below is the non-lease operating cost components associated with the costs of the building lease. See Note 7 for additional disclosures on leases.
For the fiscal period ending September 30, | Office Premises |
2020 | $55,625 |
2021 | 222,501 |
2022 | 222,501 |
2023 | 222,501 |
2024 | 222,501 |
945,629 | |
2025 | 166,876 |
1,112,505 |
9. Common shares
The Company is authorized to issue an unlimited number of common shares, of which the following are issued and outstanding:
For the nine months ended | ||||
September 30, 2020 | September 30, 2019 | |||
# of shares | $ amount | # of shares | $ amount | |
As at the beginning of the year | 64,406,891 | $95,313,064 | 68,573,558 | $96,656,248 |
Changes during the period | - | - | - | - |
As at the end of the period | 64,406,891 | 95,313,064 | 68,573,558 | 96,656,248 |
[10]
NXT ENERGY SOLUTIONS INC.
Notes to the Unaudited Condensed Consolidated Interim Financial Statements
As at and the three and nine month periods ended September 30, 2020
(Expressed in Canadian dollars unless otherwise stated)
10. Earnings (Loss) per share
For the three months | For the nine months | |||
ended September 30, | ended September 30, | |||
2020 | 2019 | 2020 | 2019 | |
Comprehensive income (loss) for the period | $(1,502,456) | $(774,373) | $(4,314,466) | $5,548,195 |
Weighted average number of shares outstanding for the period: | ||||
Basic | 64,406,891 | 68,573,558 | 64,406,891 | 68,573,558 |
Diluted | 64,406,891 | 68,573,558 | 64,406,891 | 73,431,574 |
Net Income (loss) per share – Basic | $(0.02) | $(0.01) | $(0.07) | $0.08 |
Net Income (loss) per share – Diluted | $(0.02) | $(0.01) | $(0.07) | $0.08 |
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.
11. Share based compensation
Stock Options:
The following is a summary of stock options which are outstanding as at September 30, 2020. 135,000 options at an exercise price of $1.82 expired in October 2020.
Average remaining | |||
Exercise price | # of options | #of options | Contractual |
per share | outstanding | exercisable | life (in years) |
$0.52 | 16,000 | 16,000 | 5.0 |
$0.52 | 100,000 | 100,000 | 3.8 |
$0.55 | 30,000 | 30,000 | 4.3 |
$0.55 | 150,000 | 100,000 | 3.1 |
$1.45 | 37,500 | 37,500 | 1.2 |
$1.48 | 37,500 | 37,500 | 0.8 |
$1.50 | 50,000 | 50,000 | 0.8 |
$1.73 | 92,600 | 92,600 | 0.2 |
$1.82 | 135,000 | 135,000 | 0.1 |
648,600 | 598,600 | 1.8 |
[11]
NXT ENERGY SOLUTIONS INC.
Notes to the Unaudited Condensed Consolidated Interim Financial Statements
As at and the three and nine month periods ended September 30, 2020
(Expressed in Canadian dollars unless otherwise stated)
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 nine months ended | For the year ended | |||
September 30, 2020 | December 31, 2019 | |||
weighted | Weighted | |||
# of stock | average | # of stock | Average | |
options | exercise price | options | exercise price | |
Options outstanding, start of the period | 1,169,500 | $1.48 | 1,297,000 | $1.58 |
Granted | 46,000 | $0.54 | 100,000 | $0.52 |
Expired | (566,900) | $(1.76) | (47,500) | $(1.51) |
Forfeited | - | - | (180,000) | $(1.70) |
Options outstanding, end of the period | 648,600 | $1.17 | 1,169,500 | $1.48 |
Options exercisable, end of the period | 598,600 | $1.21 | 1,119,500 | $1.52 |
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 | 2020 | 2019 |
Expected dividends paid per common share | Nil | Nil |
Expected life in years | 5.0 | 5.0 |
Weighted average expected volatility in the price of common shares | 138% | 65% |
Weighted average risk free interest rate | 1.12% | 1.68% |
Weighted average fair market value per share at grant date | $0.54 | $0.52 |
Deferred Stock Units (“DSUs”):
A continuity of the number of DSUs which are outstanding at the end of the current period and as at the prior fiscal year ended December 31, 2019 is as follows:
Opening balance | 2020 | 2019 |
Granted | 31,944 | - |
Closing balance | 31,944 | - |
[12]
NXT ENERGY SOLUTIONS INC.
Notes to the Unaudited Condensed Consolidated Interim Financial Statements
As at and the three and nine month periods ended September 30, 2020
(Expressed in Canadian dollars unless otherwise stated)
The DSUs plan is a long-term incentive plan that permits the grant of DSUs to qualified directors. DSUs granted under the DSUs plan are to be settled at the retirement, resignation or death of the Board member holding the DSUs.
Restricted Stock Units (“RSUs”):
In the period ended September 30, 2020, the Company granted 1,200,000 RSU’s to employees and officers. The RSUs vest at a rate of one-third at the end of each of the first three years following the date of grant.
A continuity of the number of RSUs, including fair value (“FV”) which are outstanding at the end of the current period and as at the prior year ended December 31, 2019 is as follows:
For the nine months ended | For the year ended | |||
September 30, 2020 | December 31, 2019 | |||
# of RSUs | FV/Unit | # of RSUs | FV/Unit | |
RSUs outstanding, start of the period | - | $- | - | $- |
Granted | 1,200,000 | $0.45 | - | $- |
Converted | - | $- | - | $- |
Forfeited | - | $- | - | $- |
RSUs outstanding, end of the period | 1,200,000 | $0.50 | - | $- |
Employee Share Purchase Plan (“ESP Plan”):
On August 25, 2020, shareholders of the Company and subsequently the Toronto Stock Exchange (the "TSX") approved, the ESP Plan. The ESP Plan allows employees and other individuals determined by the Board to be eligible to contribute a minimum of 1% and a maximum of 10% of their earnings to the plan for the purchase of common shares in the capital of the Company (“Common Shares”), and the Company will make an equal contribution. Common Shares contributed by the Company may be issued from treasury or acquired through the facilities of the TSX. As of the date of these financial statements, no Common Shares have been, issued from treasury under the ESP Plan, but the plan is expected to issue Common Shares during the fourth quarter of 2020.
12. 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. 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.
[13]
NXT ENERGY SOLUTIONS INC.
Notes to the Unaudited Condensed Consolidated Interim Financial Statements
As at and the three and nine month periods ended September 30, 2020
(Expressed in Canadian dollars unless otherwise stated)
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 September 30, 2020 and December 31, 2019, the Company held no derivative financial instruments.
13. Change in non-cash working capital
The changes in non-cash working capital balances are comprised of:
For the three months ended September 30, | For the nine months ended September 30, | |||
2020 | 2019 | 2020 | 2019 | |
Accounts receivable | $(43,786) | $5,344,049 | $523,897 | $(3,929,579) |
Note receivable | 28,921 | (332,175) | 324,700 | (332,175) |
Prepaid expenses and deposits | 68,856 | 56,925 | (49,940) | (103,971) |
Accounts payable and accrued liabilities | 131,127 | (602,992) | (131,401) | 77,804 |
Contractual obligations | - | - | (131,386) | 134,902 |
185,118 | 4,465,807 | 535,870 | (4,153,019) | |
Portion attributable to: | ||||
Operating activities | 185,118 | 4,465,807 | 535,870 | (4,153,019) |
Financing activities | - | - | - | - |
Investing activities | - | - | - | - |
185,118 | 4,465,807 | 535,870 | (4,153,019) |
14. 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 in the for the nine month period ended September 30, 2020 were the result of the forfeiture of the non-refundable deposit from AGV. See Note 6.
[14]
NXT ENERGY SOLUTIONS INC.
Notes to the Unaudited Condensed Consolidated Interim Financial Statements
As at and the three and nine month periods ended September 30, 2020
(Expressed in Canadian dollars unless otherwise stated)
Revenues by geographic area were generated solely in Nigeria during 2019, entirely from a single client.
For the three months ended September 30, | For the nine months ended September 30, | |||
2020 | 2019 | 2020 | 2019 | |
Nigeria | $- | $1,021,532 | $- | $11,976,149 |
Other | - | - | 136,566 | - |
- | 1,021,532 | 136,566 | 11,976,149 |
15. 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:
For three months ended September 30, | For the nine months ended September 30 | |||
2020 | 2019 | 2020 | 2019 | |
Legal Fees | $78,654 | $67,550 | $226,371 | $241,422 |
Accounts payable and accrued liabilities includes a total of $87,432 ($146,197 as at December 31, 2019) payable to this law firm.
[15]