Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2020shares | |
Cover [Abstract] | |
Entity Registrant Name | NXT Energy Solutions Inc. |
Entity Central Index Key | 0001009922 |
Document Type | 20-F |
Document Period End Date | Dec. 31, 2020 |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Is Entity a Well-known Seasoned Issuer? | No |
Is Entity a Voluntary Filer? | No |
Is Entity's Reporting Status Current? | Yes |
Entity 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 |
Document Annual Report | true |
Document Transition Report | false |
Document Shell Company Report | false |
Entity Common Stock, Shares Outstanding | 64,409,170 |
Document Fiscal Period Focus | FY |
Document Fiscal Year Focus | 2020 |
Consolidated Balance Sheets
Consolidated Balance Sheets - CAD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Current assets | ||
Cash and cash equivalents | $ 2,690,146 | $ 2,858,245 |
Short-term investments (Note 3) | 341,261 | 3,781,512 |
Accounts receivable (Note 4) | 965,548 | 1,384,315 |
Note receivable (Note 5) | 0 | 324,700 |
Prepaid expenses | 77,532 | 97,132 |
Total current assets | 4,074,487 | 8,445,904 |
Long term assets | ||
Deposits (Note 6) | 526,561 | 535,554 |
Property and equipment (Note 7) | 707,326 | 677,647 |
Right of use assets (Note 8) | 2,415,430 | 3,063,769 |
Intellectual property (Note 9) | 16,285,333 | 17,970,067 |
Total assets | 24,009,137 | 30,692,941 |
Current liabilities | ||
Accounts payable and accrued liabilities (Note 10, 24) | 440,538 | 448,928 |
Contract obligations (Note 11) | 127,507 | 131,386 |
Current portion of lease obligation (Note 13) | 773,465 | 736,408 |
Total current liabilities | 1,341,510 | 1,316,722 |
Long-term liabilities | ||
Long-term lease obligation (Note 13) | 1,896,277 | 2,669,736 |
Asset retirement obligation (Note 12) | 22,741 | 21,481 |
Total long term liabilities | 1,919,018 | 2,691,217 |
Total liabilities | 3,260,528 | 4,007,939 |
Shareholders' equity: | ||
Common shares (Note 15): - authorized unlimited, issued: 64,437,790 (2019 - 64,406,891) common shares | 95,327,123 | 95,313,064 |
Contributed capital | 9,355,716 | 9,306,493 |
Deficit (Note 2) | (83,934,230) | (77,934,555) |
Total shareholders' equity | 20,748,609 | 26,685,002 |
Total liabilities and shareholders' equity | $ 24,009,137 | $ 30,692,941 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Shareholders' equity: | ||
Common shares, authorized | Unlimited | Unlimited |
Common shares, issued | 64,437,790 | 64,406,891 |
Consolidated Statements of Inco
Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) - CAD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Revenue | |||
Survey revenue (Note 21) | $ 136,566 | $ 11,976,149 | $ 0 |
Expenses | |||
Survey costs (Note 22) | 1,091,587 | 2,611,086 | 1,103,946 |
General and administrative expenses (Note 17, 23 & 24) | 3,341,010 | 3,541,594 | 4,385,243 |
Amortization | 1,780,806 | 1,781,181 | 1,790,267 |
Total expenses | 6,213,403 | 7,933,861 | 7,279,456 |
Other expenses (income) | |||
Interest (income) expense, net | (11,535) | (20,684) | (62,004) |
Foreign exchange loss (gain) | (76,029) | 233,231 | (19,852) |
Intellectual property and other (Note 9) | 10,402 | 56,833 | (43,428) |
Gain on extinguishment of liability (Note 25) | 0 | 0 | (185,661) |
Total other expense (income) | (77,162) | 269,380 | (310,945) |
Income (loss) before income taxes | (5,999,675) | 3,772,908 | (6,968,511) |
Income tax expense (Note 18) | 0 | 0 | 0 |
Net income (loss) and comprehensive income (loss) | $ (5,999,675) | $ 3,772,908 | $ (6,968,511) |
Net income (loss) per share (Note 16) | |||
Basic | $ (0.09) | $ 0.06 | $ (0.11) |
Diluted | $ (0.09) | $ 0.06 | $ (0.11) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - CAD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Operating activities | |||
Net income (loss) | $ (5,999,675) | $ 3,772,908 | $ (6,968,511) |
Items not affecting cash: | |||
Stock based compensation expense (Note 17) | 168,416 | 43,809 | 386,154 |
Amortization | 1,780,806 | 1,781,181 | 1,790,267 |
Non-cash changes to asset retirement obligation | 2,069 | 2,068 | (29,925) |
Non-cash lease and interest (Note 25) | (171,300) | (171,056) | (155,301) |
Unrealized foreign exchange (gain) loss | 141,799 | 95,557 | (44,765) |
Deferred rent | 0 | 0 | (2,919) |
Gain on extinguishment of liabilities (Note 25) | 0 | 0 | (185,661) |
Change in non-cash working capital balances (Note 20) | 625,769 | (1,464,695) | (858,170) |
ARO liabilities settled (Note 12) | (809) | (7,366) | 0 |
Total non-cash items | 2,546,750 | 279,498 | 899,680 |
Net cash (used in) operating activities | (3,452,925) | 4,052,406 | (6,068,831) |
Financing activities | |||
Proceeds from the Employee Share Purchase Plan | 7,592 | 0 | 0 |
Net funds used in targeted issuer bid (Note 15) | 0 | (1,343,184) | 0 |
Proceeds from exercise of stock options | 0 | 0 | 5,067 |
Net proceeds from private placement | 0 | 0 | 9,211,351 |
Repayment of lease obligation | (42,515) | (42,603) | (39,579) |
Net cash from (used in) financing activities | (34,923) | (1,385,787) | 9,176,839 |
Investing activities | |||
Purchase of property and equipment, net | 0 | (216,691) | (10,006) |
Decrease (increase) in short-term investments | 3,436,691 | 42,764 | (2,950,000) |
Net cash from (used in) investing activities | 3,436,691 | (173,927) | (2,960,006) |
Effect of foreign exchange rate changes on cash and cash equivalents | (116,942) | 26,021 | 24,912 |
Net increase (decrease) in cash and cash equivalents | (168,099) | 2,518,713 | 172,914 |
Cash and cash equivalents, beginning of the year | 2,858,245 | 339,532 | 166,618 |
Cash and cash equivalents, end of the year | 2,690,146 | 2,858,245 | 339,532 |
Supplemental information: | |||
Cash interest (received) | (21,422) | (16,724) | (58,889) |
Cash taxes paid | $ 0 | $ 0 | $ 0 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - CAD ($) | Common Shares | Contributed Capital | Deficit | Total |
Beginning balance at Dec. 31, 2017 | $ 88,121,286 | $ 8,195,075 | $ (74,738,952) | $ 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 (Note 17) | 386,154 | 386,154 | ||
Transfer from contributed capital upon exercise of stock options (Note 10) | 6,441 | (6,441) | 0 | |
Net (loss) income | (6,968,511) | (6,968,511) | ||
Ending balance at Dec. 31, 2018 | 96,656,248 | 9,262,684 | (81,707,463) | 24,211,469 |
Shares purchased and retired during the year (Note 15) | (1,343,184) | (1,343,184) | ||
Recognition of stock based compensation expense (Note 17) | 43,809 | 43,809 | ||
Net (loss) income | 3,772,908 | 3,772,908 | ||
Ending balance at Dec. 31, 2019 | 95,313,064 | 9,306,493 | (77,934,555) | 26,685,002 |
Issuance of common stock Employee Share Purchase Plan | 14,059 | 14,059 | ||
Recognition of stock based compensation expense (Note 17) | 49,223 | 49,223 | ||
Net (loss) income | (5,999,675) | (5,999,675) | ||
Ending balance at Dec. 31, 2020 | $ 95,327,123 | $ 9,355,716 | $ (83,934,230) | $ 20,748,609 |
The Company and going concern
The Company and going concern | 12 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
The Company and going concern | 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 of NXT have been prepared by management in accordance with U.S. GAAP. These 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 consolidated financial statements have been prepared on a going concern basis. The going concern basis of presentation assumes that NXT will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business. The events described in the following paragraphs highlight that there 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 and planned operations for a year beyond the date that these financial statements have been issued. The Company is taking further steps to reduce operating costs including payroll, and 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 new equity, debentures or bank credit facilities. The need for any of these options will be dependent on the timing of securing new SFD® survey contracts and obtaining financing on 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 to convert these opportunities into successful contracts, to continue to attract new client projects, ultimately to 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 sufficient certainty. The consolidated financial statements do not reflect adjustments that would be necessary if the going concern basis was not appropriate. If the going concern basis 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 consolidated financial statements the Covid-19 pandemic continues to be a risk to 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 could 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 consolidated financial statements are subject to a higher degree of measurement uncertainty during this volatile period. |
Significant accounting policies
Significant accounting policies and changes | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Significant accounting policies and changes | Basis of Presentation These consolidated financial statements 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 as at the date of the consolidated financial statements. Estimates and assumptions are reviewed periodically and the effects of revisions are reflected in the period when determined. Actual results may differ from those estimates. Cash and Cash Equivalents Cash and cash equivalents consist of cash on hand and short term Guaranteed Investment Certificates (“GIC’s”) 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, 2020 and 2019, 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. At December 31, 2020, the fair value of the RSU liability was determined using Level 1 inputs. 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. 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 are 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. 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 Intellectual Property Intellectual property acquired is recorded at cost, less accumulated amortization, which is recorded over the estimated minimum useful life of the assets. The Company incurs periodic expenses to file patents and to maintain them. 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. The Company considers both internal and external factors when assessing for potential indicators of impairment, and with respect to intellectual property, the Company’s assessment includes consideration of historical and forecasted project survey revenues, market capitalization, market capitalization control premiums, and the project survey revenue multiples compared to industry peers. 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. 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 2020, 2019 and 2018. 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. 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. During 2020 the Company determined that the full amount previously presented in accumulated other comprehensive income of $710,934 related to cumulative translation adjustment associated with foreign subsidiaries that were substantially liquidated prior to fiscal year 2018. Thus the Company has recorded an immaterial correction to reflect the release of the cumulative translation adjustment to earnings prior to the opening balance sheet by eliminating the accumulated other comprehensive income balance of $710,934 and decreasing the deficit by the same amount. 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 NXT follows the fair value method of accounting for stock options, restricted stock units, deferred stock units, and the employee share purchase plan (the “Share Compensation Plans”) that are granted to acquire common shares under NXT's Share Compensation Plans. For equity-settled stock-based compensation awards, fair values are determined at the grant date and the expense, net of estimated forfeitures, is recognized over the requisite service period with a corresponding increase recorded in contributed capital. An adjustment is made to compensation expense for any difference between the estimated forfeitures and the actual forfeitures. For cash-settled stock-based compensation awards, fair values, based on observable prices, are determined at each reporting date and periodic changes are recognized as compensation costs, with a corresponding change to liabilities. Upon exercise or realization of the Share Compensation Plans, 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 (excluding 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 adoption of Topic 842 resulted in the initial recognition of right-of-use assets of approximately $3.5 million, current lease liabilities of approximately $0.7 million, and non-current lease liabilities of approximately $3.4 million as at January 1, 2019. The policy and disclosures required under Topic 842 are included in Note 13, Leases. 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 year ended December 31, 2020, the Company received government grants through the Canada Emergency Wage Subsidy (“CEWS”) for $292,161 and Canada Emergency Rent Subsidy (“CERS”) for $58,526. |
Short-term investments
Short-term investments | 12 Months Ended |
Dec. 31, 2020 | |
Short-term Investments [Abstract] | |
Short-term investments | Short-term investments consist of GIC’s with originally maturity dates of 90 days to one year from the date of purchase. As at December 31, 2020 and 2019 all GIC’s had less than one year left before maturity. For December 31, 2020, interest rates ranged from 0.50% to 1.75%. For December 31, 2019, interest rates ranged from 1.70% to 2.15%. December 31, December 31, Days to maturity 2020 2019 Less than 90 days $ 191,261 $ 1,754,302 91 to 183 days - 1,218,724 184 days to one year 150,000 808,486 341,261 3,781,512 |
Accounts receivable
Accounts receivable | 12 Months Ended |
Dec. 31, 2020 | |
Accounts Receivable, after Allowance for Credit Loss [Abstract] | |
Accounts receivable | Accounts receivable are all current as at December 31, 2020. December 31, December 31, 2020 2019 Trade receivables $ 804,059 $ 1,297,792 Other receivables 161,489 86,523 965,548 1,384,315 Allowance for doubtful accounts - - Net accounts receivable 965,548 1,384,315 The entire trade receivable is with one client. |
Note receivable
Note receivable | 12 Months Ended |
Dec. 31, 2020 | |
Accounts and Financing Receivable, after Allowance for Credit Loss [Abstract] | |
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 year. |
Deposits
Deposits | 12 Months Ended |
Dec. 31, 2020 | |
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. December 31, December 31, 2020 2019 Building $ 43,309 $ 43,309 Aircraft 483,252 492,245 526,561 535,554 |
Property and equipment
Property and equipment | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and equipment | December 31, 2020 Cost Accumulated Net book Base Amortization value Survey equipment $ 892,637 $ 676,442 $ 216,195 Computers and software 1,265,045 1,232,844 32,200 Furniture and other equipment 528,419 513,001 15,419 Leasehold improvements 1,084,573 641,061 443,512 3,770,674 3,063,348 707,326 December 31, 2019 Cost Accumulated Net book 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 |
Right of use assets
Right of use assets | 12 Months Ended |
Dec. 31, 2020 | |
Right Of Use Assets | |
Right of use assets | December 31, 2020 Cost Accumulated Right of Base Amortization Use Aircraft $ 1,578,774 $ 556,891 $ 1,021,883 Office Building 1,799,626 415,559 1,384,067 Printer 17,794 8,314 9,480 Office equipment - - - 3,396,194 980,794 2,415,430 December 31, 2019 Cost Accumulated Right of 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, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intellectual property | During 2015, NXT acquired the rights to the SFD® technology for use in the exploration of hydrocarbons from Mr. George Liszicasz, the Chief Executive Officer of the Company and Director, 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. December 31, December 31, 2020 2019 Intellectual property acquired $ 25,271,000 $ 25,271,000 Accumulated amortization (8,985,667 ) (7,300,933 ) 16,285,333 17,970,067 |
Accounts payable and accrued li
Accounts payable and accrued liabilities | 12 Months Ended |
Dec. 31, 2020 | |
Payables and Accruals [Abstract] | |
Accounts payable and accrued liabilities | December 31, December 31, 2020 2019 Accrued liabilities related to: Consultants and professional fees $ 183,920 $ 311,635 Payroll 120,318 - Vacation Accrued 71,699 106,529 375,937 418,164 Trade payables and other 64,601 30,764 440,538 448,928 |
Contract obligations
Contract obligations | 12 Months Ended |
Dec. 31, 2020 | |
Contract with Customer, Liability [Abstract] | |
Contract obligations | In December, 2020 the Company received a deposit of US$100,000 to sell pre-existing SFD® data. The SFD® data is expected to be delivered to the customer in the second quarter of 2021. 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. The amount was recognized as other revenue within the year (Note 21). December 31, December 31, 2020 2019 Contract obligations $ 127,507 $ 131,386 |
Asset retirement obligation
Asset retirement obligation | 12 Months Ended |
Dec. 31, 2020 | |
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 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%. 2020 2019 2018 ARO balance, beginning of the year $ 21,481 $ 26,778 $ 56,702 Accretion expense 2,069 2,069 2,069 Costs incurred (809 ) (7,366 ) - Change in ARO estimates - - (31,993 ) ARO balance, end of the year 22,741 21,481 26,778 |
Lease obligation
Lease obligation | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Lease obligation | December 31, December 31, 2020 2019 Aircraft $ 1,220,425 $ 1,680,103 Office Building 1,440,085 1,669,953 Printer 9,232 13,573 Office equipment - 42,515 2,669,742 3,406,144 Current Portion of lease obligations (773,465 ) (736,408 ) Long-term lease obligations 1,896,277 2,669,736 Maturity of lease liabilities: 2021 $ 1,018,789 2022 1,135,510 2023 367,185 2024 367,185 2025 275,389 Total lease payments 3,164,058 Less imputed interest (494,316 ) Total discounted lease payments 2,669,742 Current portion of lease obligations (773,465 ) Non-current portion of lease obligations 1,896,277 In June 2020, the Company exercised an option for an early buy-out option on its office equipment lease for $20,000. |
Commitments
Commitments | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments | The table below is the non-lease operating cost components associated with the costs of the building lease. For the fiscal year ending December 31, Office Premises 2021 $ 228,091 2022 228,091 2023 228,091 2024 228,091 2025 171,069 1,083,433 In April 2017, NXT completed a sale and leaseback agreement of its aircraft with a Calgary based international aircraft services organization. The terms of the agreement resulted in NXT selling its Cessna Citation aircraft that was purchased in 2015 for US$2,000,000 for the sum of US$2,300,000. NXT has leased the aircraft over an initial term of 60 months and retains all existing operating rights and obligations. Net proceeds to NXT from the sale were approximately $2.7 million, after payment of all commissions and fees. The net book value of the asset of $2.4 million was derecognized and the resulting gain on disposition of $776,504 was deferred. In 2017 and 2018 the amortized gain of $155,301 was recognized as a reduction to the Company’s lease expense in the Consolidated Statement of Income and Comprehensive Income (Loss). |
Common shares
Common shares | 12 Months Ended |
Dec. 31, 2020 | |
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 years ended December 31, 2020 December 31, 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 Issuance for Employee Stock Purchase Plan 30,899 14,059 - - Shares retired during the year - - (4,166,667 ) (1,343,184 ) As at the end of the year 64,437,790 95,327,123 64,406,891 95,313,064 For the Year Ended December 31, 2018 # of shares $ amount As at the beginning of the year 58,161,133 $ 88,121,286 Shares issued during the year: Issuance of Common Stock the Private Placement 10,264,946 8,387,451 Exercise of stock options 6,667 5,067 Transfer from contributed capital from on the exercise of stock options - 6,441 Finder’s fee 140,812 136,003 As at the end of the year 68,573,558 96,656,248 In 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 through a targeted issuer bid. The 4,166,667 shares were cancelled immediately after they were purchased. 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 comprising one share and a third of a warrant. All of AGV’s 3,421,648 warrants expired as of October 31, 2019. 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 in 2018. |
Earnings (loss) per share
Earnings (loss) per share | 12 Months Ended |
Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |
Earnings (loss) per share | For the years ended December 31, 2020 2019 2018 Net income (loss) for the year $ (5,999,675 ) $ 3,772,908 $ (6,968,511 ) Weighted average number of shares outstanding for the year: Basic 64,409,170 68,156,059 65,455,325 Diluted 64,409,170 68,156,059 65,455,325 Net Income (loss) per share – Basic $ (0.09 ) $ 0.06 $ (0.11 ) Net Income (loss) per share – Diluted $ (0.09 ) $ 0.06 $ (0.11 ) In years in which a loss results, all outstanding stock options are excluded from the diluted loss per share calculations as their effect is anti-dilutive. |
Share based compensation
Share based compensation | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Share based compensation | The Company has an equity compensation program in place for its executives, employees and directors. Executives and employees are given equity compensation grants that vest based on a recipient's continued employment. The Company’s stock-based compensation awards outstanding as at December 31, 2020, include stock-options, restricted stock units (“RSUs”) and deferred share units (“DSUs”). The following tables provide information about stock option, RSU and DSU activity. For the years ended December 31, 2020 2019 2018 Stock Option Expense $ 34,223 $ 43,809 $ 386,154 Deferred Share Units 15,000 - - Restricted Stock Units 111,060 - - Employee Share Purchase Plan 8,133 - - Total Stock Based Compensation Expense 168,416 43,809 386,154 Stock Options: The following is a summary of stock options which are outstanding as at December 31, 2020. Average remaining Exercise price # of options #of options contractual per share outstanding exercisable life (in years) $ 0.51 16,000 16,000 4.7 $ 0.52 100,000 100,000 3.5 $ 0.55 30,000 30,000 4.1 $ 0.59 150,000 100,000 2.8 $ 1.45 37,500 37,500 1.0 $ 1.48 37,500 37,500 0.5 $ 1.50 50,000 50,000 0.6 421,000 421,000 2.5 A continuity of the number of stock options which are outstanding at the end of the current year and as at the prior fiscal years ended December 31, 2019 and 2018 is as follows: For the year ended For the year ended December 31, 2020 December 31, 2019 weighted weighted # of stock average # of stock average options exercise price options exercise price Options outstanding, start of the year 1,169,500 $ 1.48 1,297,000 $ 1.58 Granted 46,000 $ 0.54 100,000 $ 0.52 Expired (794,500 ) $ (1.77 ) (47,500 ) $ (1.51 ) Forfeited - - (180,000 ) $ (1.70 ) Options outstanding, end of the year 421,000 $ 0.83 1,169,500 $ 1.48 Options exercisable, end of the year 421,000 $ 0.83 1,119,500 $ 1.52 For the year ended December 31, 2018 weighted # of stock average options exercise price Options outstanding, start of the year 1,648,667 $ 1.60 Granted 1,150,000 $ 1.06 Exercised (6,667 ) $ 0.76 Expired (65,000 ) $ (1.17 ) Forfeited (1,430,000 ) $ (1.21 ) Options outstanding, end of the year 1,297,000 $ 1.58 Options exercisable, end of the year 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 year ended 2020 2019 2018 Expected dividends paid per common share Nil Nil Nil Expected life in years 5.0 5.0 5.0 Weighted average expected volatility in the price of common shares 138% 65% 65% Weighted average risk free interest rate 1.12% 1.68% 1.75% Weighted average fair market value per share at grant date $ 0.54 $ 0.52 $ 1.06 Intrinsic (or “in-the-money”) value per share of options exercised $ - $ - $ 0.59 Deferred Stock Units (“DSUs”): The company’s first grant of DSU’s began in 2020. A continuity of the number of DSUs which are outstanding at the end of the current year is as follows: 2020 DSUs outstanding, start of the year - Granted 37,354 Closing balance 37,354 The DSUs plan is a long-term incentive plan that permits the grant of DSUs to qualified directors. DSUs entitle the holder to receive the underlying number of shares of the Company’s Common Stock upon vesting of such units. 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”): The Company’s first grant of RSU’s began in 2020. RSUs entitle the holder to receive, at the option of the Company, either the underlying number of shares of the Company's Common Stock upon vesting of such units or a cash payment equal to the value of the underlying shares. The RSUs vest at a rate of one-third at the end of each of the first three years following the date of grant. The Company intends to settle the RSUs in cash. In the year ended December 31, 2020, the Company granted 1,200,000 RSU’s to employees and officers. A continuity of the number of RSUs, including fair value (“FV”) which are outstanding at the end of the current year is as follows: 2020 # of RSUs FV/Unit RSUs outstanding, start of the year - $ - Granted 1,200,000 $ 0.45 Converted - $ - Forfeited - $ - RSUs outstanding, end of the year 1,200,000 $ 0.79 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, of which the Company will make an equal contribution. Common shares contributed by the Company may be issued from treasury or acquired through the facilities of the TSX. During 2020 the Company elected to issue common shares from treasury. 2020 # of shares $ amount Purchased by employees 16,686 $ 7,592 Matched by the Company 14,213 6,467 Total Common Shares issued 30,899 14,059 The Company will also match 100% of the employee contributions of up to 10% of their earnings in the first year of the plan if the employee does not withdrawal common shares from the ESP Plan in the first year of their participation, up to $15,000 per employee (the “Bonus Match”). As at December 31, 2020 the Company has accrued $1,666 for the Bonus Match. Effective for the year ended December 31, 2020, the Company has presented stock based compensation expense of $168,416 within general and administrative expenses and has recorded an immaterial correction to classify the stock based compensation expense for the 2019 and 2018 comparative years of $43,809 and $386,154, respectively, to be presented within general and administrative expenses. While ASC 718 does not identify a specific line item in the income statement for presentation of the expense related to share based compensation arrangements, the SEC has released guidance under SAB Topic 14.F that the expense related to share-based payment arrangements should be presented in the same line or lines as cash compensation paid to the same employees. The Company’s presentation conforms to this guidance. |
Income tax expense
Income tax expense | 12 Months Ended |
Dec. 31, 2020 | |
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: For the years ended December 31, 2020 2019 2018 Income (loss) before income taxes $ (5,999,675 ) $ 3,772,908 $ (6,968,551 ) Canadian statutory income tax rate 24.0 % 26.5 % 27.0 % Income tax (recovery) at statutory income tax rate $ (1,439,922 ) $ 999,821 $ (1,881,509 ) Effect of non- deductible expenses and other items: Stock-based compensation and other expenses $ 44,225 $ 11,609 $ 99,919 Change in statutory tax rates (131,242 ) 918,821 - Foreign exchange adjustments 29,910 82,433 (131,555 ) Other (expired losses) 258,091 43,592 (221,978 ) (1,238,938 ) 2,056,276 (2,135,123 ) Change in valuation allowance 1,238,938 (2,056,276 ) 2,135,123 Income tax expense (recovery) - - - Effective July 1, 2020, the Province of Alberta decreased its corporate tax rate from 10% to 8%. A valuation allowance has been provided for the Company’s deferred income tax assets due to uncertainty regarding the amount and timing of their potential future utilization, as follows: 2020 2019 2018 Net operating losses carried forward: Canada (expiration dates 2027 to 2040) $ 7,809,363 $ 6,840,817 $ 9,563,701 USA (expiration dates 2021 to 2026) 1,223,212 1,494,711 1,569,976 Timing differences on property & equipment, Right of Use Assets, Lease obligations and financing costs 1,944,011 1,810,789 2,109,557 SRED Expenditures 369,522 348,341 396,020 Foreign Tax Credit 285,772 285,772 371,133 11,631,880 10,780,430 14,010,387 Intellectual property (3,745,627 ) (4,133,115 ) (5,306,796 ) 7,886,253 6,647,315 8,703,591 Less valuation allowance (7,886,253 ) (6,647,315 ) (8,703,591 ) - - - |
Financial instruments
Financial instruments | 12 Months Ended |
Dec. 31, 2020 | |
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, deposits, accounts payables and accrued liabilities and lease obligations. The carrying value of these financial instruments, excluding leases, approximates their fair values due to their short terms to maturity. Credit Risk Credit risk arises from the potential that the Company may incur a loss if counterparty to a financial instrument fails to meet its obligation in accordance with agreed terms. The Company’s financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents, short-term investments and accounts receivable. The carrying value of cash and cash equivalents, short-term investments, and accounts receivable reflects management’s assessment of credit risk. At December 31, 2020, cash and cash equivalents and short-term investments included balances in bank accounts, term deposits and guaranteed investment certificates, placed with financial institutions with investment grade credit ratings. The majority of the Company’s accounts receivable relate to sales to one customer in Nigeria and is exposed to foreign country credit risks. The Company manages this credit risk by requiring advance payments before entering into certain contract milestones and when possible accounts receivable insurance. Foreign Exchange Risk The Company is exposed to foreign exchange risk in relation to its holding of significant US$ balances in cash and cash equivalents, short-term investments, accounts receivable, note receivable, deposits, accounts payables and accrued liabilities and entering into United States dollar revenue contracts. To mitigate exposure to fluctuations in foreign exchange, the Company does not currently enter into hedging contracts, but uses strategies to reduce the volatility of United States Dollar assets including converting excess United States dollars to Canadian dollars. As at December 31, 2020, the Company held net U.S dollar assets totaling US$2,164,285. Accordingly, a hypothetical 10% change in the value of one United States dollar expressed in Canadian dollars as at December 31, 2020 would have had an approximately $276,000 effect on the unrealized foreign exchange gain or loss for the year. 2) Derivative financial instruments As at December 31, 2020 and December 31, 2019, the Company held no derivative financial instruments. |
Change in non-cash working capi
Change in non-cash working capital | 12 Months Ended |
Dec. 31, 2020 | |
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 years ended December 31, 2020 2019 2018 Accounts receivable $ 406,114 $ (1,339,408 ) $ (1,252 ) Note receivable 324,700 (332,175 ) - Prepaid expenses and deposits 19,600 (31,973 ) 42,204 Accounts payable and accrued liabilities (102,767 ) 104,745 (899,122 ) Contractual obligations (3,878 ) 134,116 - 625,769 (1,464,695 ) (858,170 ) Portion attributable to: Operating activities 625,769 (1,464,695 ) (858,170 ) Financing activities - - - Investing activities - - - 625,769 (1,464,695 ) (858,170 ) |
Geographic information
Geographic information | 12 Months Ended |
Dec. 31, 2020 | |
Segments, Geographical Areas [Abstract] | |
Geographic information | The Company generates revenue from its SFD® survey projects that assists the Company’s clients in the determination of where 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 for the year ended December 31, 2020 were the result of the forfeiture of the non-refundable deposit from AGV. See Note 11. Revenues by geographic area were generated solely in Nigeria during 2019, entirely from a single client. For the years ended December 31, 2020 2019 2018 Nigeria $ - $ 11,976,149 $ - Other 136,566 136,566 11,976,149 - |
Survey expenses
Survey expenses | 12 Months Ended |
Dec. 31, 2020 | |
Survey Expenses Tables | |
Survey expenses | Survey Expenses include the following: 2020 2019 2018 Aircraft Operations Charter hire reimbursements $ (622,383 ) $ (613,038 ) $ (698,211 ) Lease payments 433,618 400,847 454,729 Operating expenses 1,320,352 1,459,536 1,347,428 1,091,587 1,247,345 1,103,946 Survey Projects - 1,363,741 - 1,091,587 2,611,086 1,103,946 |
Government grants
Government grants | 12 Months Ended |
Dec. 31, 2020 | |
Government Grants | |
Government grants | During the year ended December 31, 2020, the Company received government grants through CEWS and the CERS. The CEWS and CERS were recognized as a reduction to general and administrative expenses. For the years ended December 31, December 31, 2020 2019 CEWS $ 292,161 $ - CERS 58,526 - Government grants recognized 350,687 - |
Other related party transaction
Other related party transactions | 12 Months Ended |
Dec. 31, 2020 | |
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 issuances) incurred with this firm were as follows: 2020 2019 2018 Legal Fees $ 224,479 $ 276,261 $ 249,218 Accounts payable and accrued liabilities includes a total of $1,570 ($146,197 as at December 31, 2019) payable to this law firm. A company owned by a family member of an executive officer was contracted to provide design services to the Company for a total cost of US$3,000. |
Gain on extinguishment of liabi
Gain on extinguishment of liability | 12 Months Ended |
Dec. 31, 2020 | |
Subscription [Member] | |
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. |
Significant accounting polici_2
Significant accounting policies and changes (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | These consolidated financial statements 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 as at the date of the consolidated financial statements. Estimates and assumptions are reviewed periodically and the effects of revisions are reflected in the period when determined. Actual results may differ from those estimates. |
Cash and Cash Equivalents | Cash and cash equivalents consist of cash on hand and short term Guaranteed Investment Certificates (“GIC’s”) 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, 2020 and 2019, 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. At December 31, 2020, the fair value of the RSU liability was determined using Level 1 inputs. 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. |
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 are 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. |
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 |
Intellectual Property | Intellectual property acquired is recorded at cost, less accumulated amortization, which is recorded over the estimated minimum useful life of the assets. The Company incurs periodic expenses to file patents and to maintain them. |
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. The Company considers both internal and external factors when assessing for potential indicators of impairment, and with respect to intellectual property, the Company’s assessment includes consideration of historical and forecasted project survey revenues, market capitalization, market capitalization control premiums, and the project survey revenue multiples compared to industry peers. 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. |
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 2020, 2019 and 2018. |
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. 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. During 2020 the Company determined that the full amount previously presented in accumulated other comprehensive income of $710,934 related to cumulative translation adjustment associated with foreign subsidiaries that were substantially liquidated prior to fiscal year 2018. Thus the Company has recorded an immaterial correction to reflect the release of the cumulative translation adjustment to earnings prior to the opening balance sheet by eliminating the accumulated other comprehensive income balance of $710,934 and decreasing the deficit by the same amount. |
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 | NXT follows the fair value method of accounting for stock options, restricted stock units, deferred stock units, and the employee share purchase plan (the “Share Compensation Plans”) that are granted to acquire common shares under NXT's Share Compensation Plans. For equity-settled stock-based compensation awards, fair values are determined at the grant date and the expense, net of estimated forfeitures, is recognized over the requisite service period with a corresponding increase recorded in contributed capital. An adjustment is made to compensation expense for any difference between the estimated forfeitures and the actual forfeitures. For cash-settled stock-based compensation awards, fair values, based on observable prices, are determined at each reporting date and periodic changes are recognized as compensation costs, with a corresponding change to liabilities. Upon exercise or realization of the Share Compensation Plans, 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 (excluding 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 adoption of Topic 842 resulted in the initial recognition of right-of-use assets of approximately $3.5 million, current lease liabilities of approximately $0.7 million, and non-current lease liabilities of approximately $3.4 million as at January 1, 2019. The policy and disclosures required under Topic 842 are included in Note 13, Leases. |
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 year ended December 31, 2020, the Company received government grants through the Canada Emergency Wage Subsidy (“CEWS”) for $292,161 and Canada Emergency Rent Subsidy (“CERS”) for $58,526. |
Significant accounting polici_3
Significant accounting policies and changes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
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 |
Short-term investments (Tables)
Short-term investments (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Short-term Investments [Abstract] | |
Short-term investments | December 31, December 31, Days to maturity 2020 2019 Less than 90 days $ 191,261 $ 1,754,302 91 to 183 days - 1,218,724 184 days to one year 150,000 808,486 341,261 3,781,512 |
Accounts receivable (Tables)
Accounts receivable (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accounts Receivable, after Allowance for Credit Loss [Abstract] | |
Accounts receivable | December 31, December 31, 2020 2019 Trade receivables $ 804,059 $ 1,297,792 Other receivables 161,489 86,523 965,548 1,384,315 Allowance for doubtful accounts - - Net accounts receivable 965,548 1,384,315 |
Deposits (Tables)
Deposits (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Deposits [Abstract] | |
Deposits | December 31, December 31, 2020 2019 Building $ 43,309 $ 43,309 Aircraft 483,252 492,245 526,561 535,554 |
Property and equipment (Tables)
Property and equipment (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and equipment | December 31, 2020 Cost Accumulated Net book Base Amortization value Survey equipment $ 892,637 $ 676,442 $ 216,195 Computers and software 1,265,045 1,232,844 32,200 Furniture and other equipment 528,419 513,001 15,419 Leasehold improvements 1,084,573 641,061 443,512 3,770,674 3,063,348 707,326 December 31, 2019 Cost Accumulated Net book 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 |
Right of use assets (Tables)
Right of use assets (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Right Of Use Assets | |
Right of use assets | December 31, 2020 Cost Accumulated Right of Base Amortization Use Aircraft $ 1,578,774 $ 556,891 $ 1,021,883 Office Building 1,799,626 415,559 1,384,067 Printer 17,794 8,314 9,480 Office equipment - - - 3,396,194 980,794 2,415,430 December 31, 2019 Cost Accumulated Right of 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, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intellectual property | December 31, December 31, 2020 2019 Intellectual property acquired $ 25,271,000 $ 25,271,000 Accumulated amortization (8,985,667 ) (7,300,933 ) 16,285,333 17,970,067 |
Accounts payable and accrued _2
Accounts payable and accrued liabilities (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Payables and Accruals [Abstract] | |
Accounts payable and accrued liabilities | December 31, December 31, 2020 2019 Accrued liabilities related to: Consultants and professional fees $ 183,920 $ 311,635 Payroll 120,318 - Vacation Accrued 71,699 106,529 375,937 418,164 Trade payables and other 64,601 30,764 440,538 448,928 |
Contract obligations (Tables)
Contract obligations (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Contract with Customer, Liability [Abstract] | |
Contract obligations | December 31, December 31, 2020 2019 Contract obligations $ 127,507 $ 131,386 |
Asset retirement obligation (Ta
Asset retirement obligation (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Asset Retirement Obligation [Abstract] | |
Asset retirement obligation | 2020 2019 2018 ARO balance, beginning of the year $ 21,481 $ 26,778 $ 56,702 Accretion expense 2,069 2,069 2,069 Costs incurred (809 ) (7,366 ) - Change in ARO estimates - - (31,993 ) ARO balance, end of the year 22,741 21,481 26,778 |
Lease obligation (Tables)
Lease obligation (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Lease obligations | December 31, December 31, 2020 2019 Aircraft $ 1,220,425 $ 1,680,103 Office Building 1,440,085 1,669,953 Printer 9,232 13,573 Office equipment - 42,515 2,669,742 3,406,144 Current Portion of lease obligations (773,465 ) (736,408 ) Long-term lease obligations 1,896,277 2,669,736 |
Maturity of lease liabilities | Maturity of lease liabilities: 2021 $ 1,018,789 2022 1,135,510 2023 367,185 2024 367,185 2025 275,389 Total lease payments 3,164,058 Less imputed interest (494,316 ) Total discounted lease payments 2,669,742 Current portion of lease obligations (773,465 ) Non-current portion of lease obligations 1,896,277 |
Commitments (Tables)
Commitments (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future minimum lease payments | For the fiscal year ending December 31, Office Premises 2021 $ 228,091 2022 228,091 2023 228,091 2024 228,091 2025 171,069 1,083,433 |
Common shares (Tables)
Common shares (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Shareholders' equity: | |
Common shares | For the years ended December 31, 2020 December 31, 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 Issuance for Employee Stock Purchase Plan 30,899 14,059 - - Shares retired during the year - - (4,166,667 ) (1,343,184 ) As at the end of the year 64,437,790 95,327,123 64,406,891 95,313,064 For the Year Ended December 31, 2018 # of shares $ amount As at the beginning of the year 58,161,133 $ 88,121,286 Shares issued during the year: Issuance of Common Stock the Private Placement 10,264,946 8,387,451 Exercise of stock options 6,667 5,067 Transfer from contributed capital from on the exercise of stock options - 6,441 Finder’s fee 140,812 136,003 As at the end of the year 68,573,558 96,656,248 |
Earnings (loss) per share (Tabl
Earnings (loss) per share (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |
Earnings (loss) per share | For the years ended December 31, 2020 2019 2018 Net income (loss) for the year $ (5,999,675 ) $ 3,772,908 $ (6,968,511 ) Weighted average number of shares outstanding for the year: Basic 64,409,170 68,156,059 65,455,325 Diluted 64,409,170 68,156,059 65,455,325 Net Income (loss) per share – Basic $ (0.09 ) $ 0.06 $ (0.11 ) Net Income (loss) per share – Diluted $ (0.09 ) $ 0.06 $ (0.11 ) |
Share based compensation (Table
Share based compensation (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Stock based compensation expense | For the years ended December 31, 2020 2019 2018 Stock Option Expense $ 34,223 $ 43,809 $ 386,154 Deferred Share Units 15,000 - - Restricted Stock Units 111,060 - - Employee Share Purchase Plan 8,133 - - Total Stock Based Compensation Expense 168,416 43,809 386,154 |
Stock options outstanding | Average remaining Exercise price # of options #of options contractual per share outstanding exercisable life (in years) $ 0.51 16,000 16,000 4.7 $ 0.52 100,000 100,000 3.5 $ 0.55 30,000 30,000 4.1 $ 0.59 150,000 100,000 2.8 $ 1.45 37,500 37,500 1.0 $ 1.48 37,500 37,500 0.5 $ 1.50 50,000 50,000 0.6 421,000 421,000 2.5 |
Stock option activity | For the year ended For the year ended December 31, 2020 December 31, 2019 weighted weighted # of stock average # of stock average options exercise price options exercise price Options outstanding, start of the year 1,169,500 $ 1.48 1,297,000 $ 1.58 Granted 46,000 $ 0.54 100,000 $ 0.52 Expired (794,500 ) $ (1.77 ) (47,500 ) $ (1.51 ) Forfeited - - (180,000 ) $ (1.70 ) Options outstanding, end of the year 421,000 $ 0.83 1,169,500 $ 1.48 Options exercisable, end of the year 421,000 $ 0.83 1,119,500 $ 1.52 For the year ended December 31, 2018 weighted # of stock average options exercise price Options outstanding, start of the year 1,648,667 $ 1.60 Granted 1,150,000 $ 1.06 Exercised (6,667 ) $ 0.76 Expired (65,000 ) $ (1.17 ) Forfeited (1,430,000 ) $ (1.21 ) Options outstanding, end of the year 1,297,000 $ 1.58 Options exercisable, end of the year 1,197,000 $ 1.67 |
Weighted average assumptions | For the year ended 2020 2019 2018 Expected dividends paid per common share Nil Nil Nil Expected life in years 5.0 5.0 5.0 Weighted average expected volatility in the price of common shares 138% 65% 65% Weighted average risk free interest rate 1.12% 1.68% 1.75% Weighted average fair market value per share at grant date $ 0.54 $ 0.52 $ 1.06 Intrinsic (or “in-the-money”) value per share of options exercised $ - $ - $ 0.59 |
Deferred stock unit activity | 2020 DSUs outstanding, start of the year - Granted 37,354 Closing balance 37,354 |
Restricted stock unit activity | 2020 # of RSUs FV/Unit RSUs outstanding, start of the year - $ - Granted 1,200,000 $ 0.45 Converted - $ - Forfeited - $ - RSUs outstanding, end of the year 1,200,000 $ 0.79 |
Employee stock purchase plan | 2020 # of shares $ amount Purchased by employees 16,686 $ 7,592 Matched by the Company 14,213 6,467 Total Common Shares issued 30,899 14,059 |
Income tax expense (Tables)
Income tax expense (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income tax expense | For the years ended December 31, 2020 2019 2018 Income (loss) before income taxes $ (5,999,675 ) $ 3,772,908 $ (6,968,551 ) Canadian statutory income tax rate 24.0 % 26.5 % 27.0 % Income tax (recovery) at statutory income tax rate $ (1,439,922 ) $ 999,821 $ (1,881,509 ) Effect of non- deductible expenses and other items: Stock-based compensation and other expenses $ 44,225 $ 11,609 $ 99,919 Change in statutory tax rates (131,242 ) 918,821 - Foreign exchange adjustments 29,910 82,433 (131,555 ) Other (expired losses) 258,091 43,592 (221,978 ) (1,238,938 ) 2,056,276 (2,135,123 ) Change in valuation allowance 1,238,938 (2,056,276 ) 2,135,123 Income tax expense (recovery) - - - |
Valuation allowance | 2020 2019 2018 Net operating losses carried forward: Canada (expiration dates 2027 to 2040) $ 7,809,363 $ 6,840,817 $ 9,563,701 USA (expiration dates 2021 to 2026) 1,223,212 1,494,711 1,569,976 Timing differences on property & equipment, Right of Use Assets, Lease obligations and financing costs 1,944,011 1,810,789 2,109,557 SRED Expenditures 369,522 348,341 396,020 Foreign Tax Credit 285,772 285,772 371,133 11,631,880 10,780,430 14,010,387 Intellectual property (3,745,627 ) (4,133,115 ) (5,306,796 ) 7,886,253 6,647,315 8,703,591 Less valuation allowance (7,886,253 ) (6,647,315 ) (8,703,591 ) - - - |
Change in non-cash working ca_2
Change in non-cash working capital (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Change In Non-cash Working Capital | |
Change in non-cash working capital | For the years ended December 31, 2020 2019 2018 Accounts receivable $ 406,114 $ (1,339,408 ) $ (1,252 ) Note receivable 324,700 (332,175 ) - Prepaid expenses and deposits 19,600 (31,973 ) 42,204 Accounts payable and accrued liabilities (102,767 ) 104,745 (899,122 ) Contractual obligations (3,878 ) 134,116 - 625,769 (1,464,695 ) (858,170 ) Portion attributable to: Operating activities 625,769 (1,464,695 ) (858,170 ) Financing activities - - - Investing activities - - - 625,769 (1,464,695 ) (858,170 ) |
Geographic information (Tables)
Geographic information (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Segments, Geographical Areas [Abstract] | |
Revenues derived by geographic area | For the years ended December 31, 2020 2019 2018 Nigeria $ - $ 11,976,149 $ - Other 136,566 136,566 11,976,149 - |
Survey expenses (Tables)
Survey expenses (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Survey Expenses Tables | |
Survey expenses | 2020 2019 2018 Aircraft Operations Charter hire reimbursements $ (622,383 ) $ (613,038 ) $ (698,211 ) Lease payments 433,618 400,847 454,729 Operating expenses 1,320,352 1,459,536 1,347,428 1,091,587 1,247,345 1,103,946 Survey Projects - 1,363,741 - 1,091,587 2,611,086 1,103,946 |
Government grants (Tables)
Government grants (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Government Grants | |
Government grants | For the years ended December 31, December 31, 2020 2019 CEWS $ 292,161 $ - CERS 58,526 - Government grants recognized 350,687 - |
Other related party transacti_2
Other related party transactions (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
Other related party transactions | 2020 2019 2018 Legal Fees $ 224,479 $ 276,261 $ 249,218 |
Significant accounting polici_4
Significant accounting policies and changes (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Computer Hardware (Including Survey Equipment) | |
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 and changes (Details Narrative) - CAD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Government grants | $ 350,687 | $ 0 |
CEWS | ||
Government grants | 292,161 | 0 |
CERS | ||
Government grants | $ 58,526 | $ 0 |
Short-term investments (Details
Short-term investments (Details) - CAD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Short-term investments | $ 341,261 | $ 3,781,512 |
Less than 90 Days | ||
Short-term investments | 191,261 | 1,754,302 |
91 to 183 Days | ||
Short-term investments | 0 | 1,218,724 |
184 days to One Year | ||
Short-term investments | $ 150,000 | $ 808,486 |
Accounts receivable (Details)
Accounts receivable (Details) - CAD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Accounts Receivable, after Allowance for Credit Loss [Abstract] | ||
Trade receivables | $ 804,059 | $ 1,297,792 |
Other receivables | 161,489 | 86,523 |
Accounts receivable, gross | 965,548 | 1,384,315 |
Allowance for doubtful accounts | 0 | 0 |
Accounts receivable, net | $ 965,548 | $ 1,384,315 |
Deposits (Details)
Deposits (Details) - CAD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Security deposits | $ 526,561 | $ 535,554 |
Building | ||
Security deposits | 43,309 | 43,309 |
Aircraft | ||
Security deposits | $ 483,252 | $ 492,245 |
Property and equipment (Details
Property and equipment (Details) - CAD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Property and equipment, gross | $ 3,770,674 | $ 3,651,209 |
Accumulated amortization | 3,063,348 | 2,973,562 |
Property and equipment, net | 707,326 | 677,647 |
Survey Equipment | ||
Property and equipment, gross | 892,637 | 892,637 |
Accumulated amortization | 676,442 | 646,953 |
Property and equipment, net | 216,195 | 245,684 |
Computers and Software | ||
Property and equipment, gross | 1,265,045 | 1,265,045 |
Accumulated amortization | 1,232,844 | 1,219,045 |
Property and equipment, net | 32,200 | 46,000 |
Furniture and Other Equipment | ||
Property and equipment, gross | 528,419 | 528,419 |
Accumulated amortization | 513,001 | 509,146 |
Property and equipment, net | 15,419 | 19,273 |
Leasehold Improvements | ||
Property and equipment, gross | 1,084,573 | 965,108 |
Accumulated amortization | 641,061 | 598,418 |
Property and equipment, net | $ 443,512 | $ 366,690 |
Right of use assets (Details)
Right of use assets (Details) - CAD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Right of use assets, gross | $ 3,396,194 | $ 3,535,919 |
Accumulated amortization | 980,794 | 472,150 |
Right of use assets, net | 2,415,430 | 3,063,769 |
Aircraft | ||
Right of use assets, gross | 1,578,774 | 1,578,774 |
Accumulated amortization | 556,891 | 256,778 |
Right of use assets, net | 1,021,883 | 1,321,996 |
Office Building | ||
Right of use assets, gross | 1,799,626 | 1,799,626 |
Accumulated amortization | 415,559 | 197,426 |
Right of use assets, net | 1,384,067 | 1,602,200 |
Printer | ||
Right of use assets, gross | 17,794 | 17,794 |
Accumulated amortization | 8,314 | 3,973 |
Right of use assets, net | 9,480 | 13,821 |
Office Equipment | ||
Right of use assets, gross | 0 | 139,725 |
Accumulated amortization | 0 | 13,973 |
Right of use assets, net | $ 0 | $ 125,752 |
Intellectual property (Details)
Intellectual property (Details) - CAD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Intellectual property acquired | $ 25,271,000 | $ 25,271,000 |
Accumulated amortization and impairment | (8,985,667) | (7,300,933) |
Intellectual property, net | $ 16,285,333 | $ 17,970,067 |
Intellectual property (Details
Intellectual property (Details Narrative) | 12 Months Ended |
Dec. 31, 2020CAD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Fair value of consideration | $ 25,300,000 |
Estimated useful life of asset | 15 years |
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 |
Annual amortization expense 2025 | $ 1,700,000 |
Accounts payable and accrued _3
Accounts payable and accrued liabilities (Details) - CAD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Accrued liabilities | $ 375,937 | $ 418,164 |
Trade payables and other | 64,601 | 30,764 |
Accounts payable and accrued liabilities | 440,538 | 448,928 |
Consultants and Professional Fees | ||
Accrued liabilities | 183,920 | 311,635 |
Payroll | ||
Accrued liabilities | 120,318 | 0 |
Vacation Accrued | ||
Accrued liabilities | $ 71,699 | $ 106,529 |
Contract obligations (Details)
Contract obligations (Details) - CAD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Contract with Customer, Liability [Abstract] | ||
Contract obligations | $ 127,507 | $ 131,386 |
Asset retirement obligation (De
Asset retirement obligation (Details) - CAD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Asset Retirement Obligation [Abstract] | |||
Asset retirement obligation, beginning | $ 21,481 | $ 26,778 | $ 56,702 |
Accretion expense | 2,069 | 2,069 | 2,069 |
Costs incurred | (809) | (7,366) | 0 |
Change in ARO estimates | 0 | 0 | (31,993) |
Asset retirement obligation, ending | $ 22,741 | $ 21,481 | $ 26,778 |
Asset retirement obligation (_2
Asset retirement obligation (Details Narrative) | 12 Months Ended |
Dec. 31, 2020 | |
Asset Retirement Obligation [Abstract] | |
Inflation rate | 2.00% |
Risk-free interest rate | 2.50% |
Lease obligation (Details)
Lease obligation (Details) - CAD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Lease obligations | $ 2,669,742 | $ 3,406,144 |
Current portion of lease obligations | (773,465) | (736,408) |
Long-term lease obligations | 1,896,277 | 2,669,736 |
Aircraft | ||
Lease obligations | 1,220,425 | 1,680,103 |
Office Building | ||
Lease obligations | 1,440,085 | 1,669,953 |
Printer | ||
Lease obligations | 9,232 | 13,573 |
Office Equipment | ||
Lease obligations | $ 0 | $ 42,515 |
Lease obligation (Details 1)
Lease obligation (Details 1) - CAD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
2021 | $ 1,018,789 | |
2022 | 1,135,510 | |
2023 | 367,185 | |
2024 | 367,185 | |
2025 | 275,389 | |
Total lease payments | 3,164,058 | |
Less imputed interest | (494,316) | |
Total discounted lease payments | 2,669,742 | $ 3,406,144 |
Current portion of lease obligations | (773,465) | (736,408) |
Non-current portion of lease obligations | $ 1,896,277 | $ 2,669,736 |
Commitments (Details)
Commitments (Details) | Dec. 31, 2020CAD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2021 | $ 228,091 |
2022 | 228,091 |
2023 | 228,091 |
2024 | 228,091 |
2025 | 171,069 |
Total leases payments due | $ 1,083,433 |
Common shares (Details)
Common shares (Details) - CAD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Beginning balance | $ 26,685,002 | $ 24,211,469 | $ 21,577,409 |
Issuance for Employee Stock Purchase Plan | 14,059 | ||
Shares retired during the year | (1,343,184) | ||
Issuance of common stock on private placement | $ 8,387,451 | ||
Issued upon exercise of stock options, shares | 6,667 | ||
Transfer from contributed capital upon exercise of stock options | $ 0 | ||
Rights offering & finders fee | 136,003 | ||
Ending balance | $ 20,748,609 | $ 26,685,002 | $ 24,211,469 |
Common Shares | |||
Beginning balance, shares | 64,406,891 | 68,573,558 | 58,161,133 |
Beginning balance | $ 95,313,064 | $ 96,656,248 | $ 88,121,286 |
Issuance for Employee Stock Purchase Plan, shares | 30,899 | ||
Issuance for Employee Stock Purchase Plan | $ 14,059 | ||
Shares retired during the year, shares | (4,166,667) | ||
Shares 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 | ||
Issued upon exercise of stock options | $ 5,067 | ||
Transfer from contributed capital upon exercise of stock options | $ 6,441 | ||
Rights offering & finders fee, shares | 140,812 | ||
Rights offering & finders fee | $ 136,003 | ||
Ending balance, shares | 64,437,790 | 64,406,891 | 68,573,558 |
Ending balance | $ 95,327,123 | $ 95,313,064 | $ 96,656,248 |
Earnings (loss) per share (Deta
Earnings (loss) per share (Details) - CAD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |||
Net income (loss) for the year | $ (5,999,675) | $ 3,772,908 | $ (6,968,511) |
Weighted average number of shares outstanding for the year | |||
Basic | 64,409,170 | 68,156,059 | 65,455,325 |
Diluted | 64,409,170 | 68,156,059 | 65,455,325 |
Net income (loss) per share - basic | $ (0.09) | $ 0.06 | $ (0.11) |
Net income (loss) per share - diluted | $ (0.09) | $ 0.06 | $ (0.11) |
Share based compensation (Detai
Share based compensation (Details) - CAD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Total stock based compensation expense | $ 168,416 | $ 43,809 | $ 386,154 |
Stock Options | |||
Total stock based compensation expense | 34,223 | 43,809 | 386,154 |
Deferred Share Units | |||
Total stock based compensation expense | 15,000 | 0 | 0 |
Restricted Stock Units | |||
Total stock based compensation expense | 111,060 | 0 | 0 |
Employee Share Purchase Plan | |||
Total stock based compensation expense | $ 8,133 | $ 0 | $ 0 |
Share based compensation (Det_2
Share based compensation (Details 1) - $ / shares | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Exercise price | $ .83 | $ 1.48 | $ 1.58 | $ 1.60 |
Number of stock options outstanding | 421,000 | 1,169,500 | 1,297,000 | 1,648,667 |
Number of stock options exercisable | 421,000 | 1,119,500 | 1,197,000 | |
Average remaining contractual life (years) | 2 years 6 months | |||
Option 1 | ||||
Exercise price | $ .51 | |||
Number of stock options outstanding | 16,000 | |||
Number of stock options exercisable | 16,000 | |||
Average remaining contractual life (years) | 4 years 8 months 12 days | |||
Option 2 | ||||
Exercise price | $ .52 | |||
Number of stock options outstanding | 100,000 | |||
Number of stock options exercisable | 100,000 | |||
Average remaining contractual life (years) | 3 years 6 months | |||
Option 3 | ||||
Exercise price | $ .55 | |||
Number of stock options outstanding | 30,000 | |||
Number of stock options exercisable | 30,000 | |||
Average remaining contractual life (years) | 4 years 1 month 6 days | |||
Option 4 | ||||
Exercise price | $ .59 | |||
Number of stock options outstanding | 150,000 | |||
Number of stock options exercisable | 150,000 | |||
Average remaining contractual life (years) | 2 years 9 months 18 days | |||
Option 5 | ||||
Exercise price | $ 1.45 | |||
Number of stock options outstanding | 37,500 | |||
Number of stock options exercisable | 37,500 | |||
Average remaining contractual life (years) | 1 year | |||
Option 6 | ||||
Exercise price | $ 1.48 | |||
Number of stock options outstanding | 37,500 | |||
Number of stock options exercisable | 37,500 | |||
Average remaining contractual life (years) | 6 months | |||
Option 7 | ||||
Exercise price | $ 1.50 | |||
Number of stock options outstanding | 50,000 | |||
Number of stock options exercisable | 50,000 | |||
Average remaining contractual life (years) | 7 months 6 days |
Share based compensation (Det_3
Share based compensation (Details 2) - $ / shares | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Number of stock options | |||
Outstanding, beginning | 1,169,500 | 1,297,000 | 1,648,667 |
Granted | 46,000 | 100,000 | 1,150,000 |
Exercised | (6,667) | ||
Expired | (794,500) | (47,500) | (65,000) |
Forfeited | 0 | (180,000) | (1,430,000) |
Outstanding, ending | 421,000 | 1,169,500 | 1,297,000 |
Exercisable | 421,000 | 1,119,500 | 1,197,000 |
Weighted average exercise price | |||
Outstanding, beginning | $ 1.48 | $ 1.58 | $ 1.60 |
Granted | .54 | 0.52 | 1.06 |
Exercised | .76 | ||
Expired | (1.77) | (1.51) | (1.17) |
Forfeited | (.00) | (1.70) | (1.21) |
Outstanding, ending | .83 | 1.48 | 1.58 |
Exercisable | $ .83 | $ 1.52 | $ 1.67 |
Share based compensation (Det_4
Share based compensation (Details 3) - $ / shares | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
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 | 5 years |
Weighted average expected volatility in the price of common shares | 138.00% | 65.00% | 65.00% |
Weighted average risk free interest rate | 1.12% | 1.68% | 1.75% |
Weighted average fair market value per share at grant date | $ .54 | $ 0.52 | $ 1.06 |
Intrinsic (or "in-the-money") value per share of options exercised | $ .00 | $ 0 | $ 0.59 |
Share based compensation (Det_5
Share based compensation (Details 4) - Deferred Share Units | 12 Months Ended |
Dec. 31, 2020shares | |
Outstanding, beginning | 0 |
Granted | 37,354 |
Outstanding, ending | 37,354 |
Share based compensation (Det_6
Share based compensation (Details 5) - Restricted Stock Units | 12 Months Ended |
Dec. 31, 2020$ / sharesshares | |
Number of restricted stock units | |
Outstanding, beginning | shares | 0 |
Granted | shares | 1,200,000 |
Converted | shares | 0 |
Forfeited | shares | 0 |
Outstanding, ending | shares | 1,200,000 |
Weighted average exercise price | |
Outstanding, beginning | $ / shares | $ .00 |
Granted | $ / shares | .45 |
Converted | $ / shares | .00 |
Forfeited | $ / shares | .00 |
Outstanding, ending | $ / shares | $ .79 |
Share based compensation (Det_7
Share based compensation (Details 6) | 12 Months Ended |
Dec. 31, 2020CAD ($)shares | |
Issuance for Employee Stock Purchase Plan | $ 14,059 |
Common Shares | |
Issuance for Employee Stock Purchase Plan, shares | shares | 30,899 |
Issuance for Employee Stock Purchase Plan | $ 14,059 |
Purchased by Employees | Common Shares | |
Issuance for Employee Stock Purchase Plan, shares | shares | 16,686 |
Issuance for Employee Stock Purchase Plan | $ 7,592 |
Matched by the Company | Common Shares | |
Issuance for Employee Stock Purchase Plan, shares | shares | 14,213 |
Issuance for Employee Stock Purchase Plan | $ 6,467 |
Share based compensation (Det_8
Share based compensation (Details Narrative) - CAD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Payment Arrangement [Abstract] | |||
Total stock based compensation expense | $ 168,416 | $ 43,809 | $ 386,154 |
Income tax expense (Details)
Income tax expense (Details) - CAD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||
Income (loss) before income taxes | $ (5,999,675) | $ 3,772,908 | $ (6,968,551) |
Canadian statutory income tax rate | 24.00% | 26.50% | 27.00% |
Income tax (recovery) at statutory income tax rate | $ (1,439,922) | $ 999,821 | $ (1,881,509) |
Effect of non-deductible expenses and other items: | |||
Stock-based compensation and other expenses | 44,225 | 11,609 | 99,919 |
Change in statutory tax rates | (131,242) | 918,821 | 0 |
Foreign exchange adjustments | 29,910 | 82,433 | (131,555) |
Other (expired losses) | 258,091 | 43,592 | (221,978) |
Effective income tax rate reconciliation, nondeductible expense | (1,238,938) | 2,056,276 | (2,135,123) |
Change in valuation allowance | 1,238,938 | (2,056,276) | 2,135,123 |
Income tax expense (recovery) | $ 0 | $ 0 | $ 0 |
Income tax expense (Details 1)
Income tax expense (Details 1) - CAD ($) | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Timing differences on property & equipment, right of use assets, lease obligations and financing costs | $ 1,944,011 | $ 1,810,789 | $ 2,109,557 |
SRED expenditures | 369,522 | 348,341 | 396,020 |
Foreign tax credit | 285,772 | 285,772 | 371,133 |
Deferred tax assets | 11,631,880 | 10,780,430 | 14,010,387 |
Intellectual property | (3,745,627) | (4,133,115) | (5,306,796) |
Deferred tax assets | 7,886,253 | 6,647,315 | 8,703,591 |
Less valuation allowance | (7,886,253) | (6,647,315) | (8,703,591) |
Total | 0 | 0 | 0 |
Canada | |||
Net operating losses carried forward | 7,809,363 | 6,840,817 | 9,563,701 |
USA | |||
Net operating losses carried forward | $ 1,223,212 | $ 1,494,711 | $ 1,569,976 |
Change in non-cash working ca_3
Change in non-cash working capital (Details) - CAD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Change In Non-cash Working Capital | |||
Accounts receivable | $ 406,114 | $ (1,339,408) | $ (1,252) |
Note receivable | 324,700 | (332,175) | 0 |
Prepaid expenses and deposits | 19,600 | (31,973) | 42,204 |
Accounts payable and accrued liabilities | (102,767) | 104,745 | (899,122) |
Contractual obligations | (3,878) | 134,116 | 0 |
Change in non-cash working capital balances | 625,769 | (1,464,695) | (858,170) |
Portion attributable to: | |||
Operating activities | 625,769 | (1,464,695) | (858,170) |
Financing activities | 0 | 0 | 0 |
Investing activities | 0 | 0 | 0 |
Total | $ 625,769 | $ (1,464,695) | $ (858,170) |
Geographic information (Details
Geographic information (Details) - CAD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Revenue | $ 136,566 | $ 11,976,149 | $ 0 |
Nigeria | |||
Revenue | 0 | 11,976,149 | 0 |
Other | |||
Revenue | $ 136,566 | $ 0 | $ 0 |
Survey expenses (Details)
Survey expenses (Details) - CAD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Aircraft Operations | |||
Charter hire reimbursements | $ (622,383) | $ (613,038) | $ (698,211) |
Lease payments | 433,618 | 400,847 | 454,729 |
Operating expenses | 1,320,352 | 1,459,536 | 1,347,428 |
Aircraft operations expense | 1,091,587 | 1,247,345 | 1,103,946 |
Survey projects | 0 | 1,363,741 | 0 |
Total survey expenses | $ 1,091,587 | $ 2,611,086 | $ 1,103,946 |
Government grants (Details)
Government grants (Details) - CAD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Government grants | $ 350,687 | $ 0 |
CEWS | ||
Government grants | 292,161 | 0 |
CERS | ||
Government grants | $ 58,526 | $ 0 |
Other related party transacti_3
Other related party transactions (Details) - CAD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |||
Legal fees | $ 224,479 | $ 276,261 | $ 249,218 |
Other related party transacti_4
Other related party transactions (Details Narrative) - CAD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Related Party Transactions [Abstract] | ||
Accounts payable and accrued liabilities | $ 1,570 | $ 146,197 |
Gain on extinguishment of lia_2
Gain on extinguishment of liability (Details Narrative) - CAD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Subscription [Member] | |||
Gain on extinguishment of liability | $ 0 | $ 0 | $ 185,661 |