0:01 All participants, thank you for standing by. The conference is ready to begin. Good day ladies and gentlemen. My name is Patrick, and I will be your conference operator today. At this time, I would like to welcome everyone to the NXT Energy Solutions Twenty Twenty One Third Quarter Operating and Financial Results Conference Call. All participants will be in listen-only mode. For the first part of the conference call. . 00:40 I would now like to turn the meeting over to Mr. George Liszicasz, President and CEO of NXT Energy Solutions. Please go ahead, Mr. Liszicasz.

00:51 Thank you, Patrick, welcome, and thank you, everyone for joining us today for NXT Energy Solutions third quarter twenty twenty one financial and operating results conference call. This is George Liszicasz and joining me today’s conference call is Eugene Woychyshyn, Vice President of Finance and Chief Financial Officer; Dr. Xiang Gui, Director of Research and Development; Rashid Tippu, Director of Geoscientists for Africa, Asia and Middle East; Enrique Hung, Director of Geosciences for the Americas; and Mohammad Saqib, Head of Interpretation and Project Engineering. 01:40 The purpose of today’s call is to briefly discuss the highlights of the release of NXT’s third quarter twenty twenty one financial and operating results. Following our update, we will open the line-up for questions. Please note all statements made by the company or management during this call are subject to the reader’s advisory regarding forward-looking information, and non-GAAP measures set forth in our to Q3 twenty twenty one release – press release and MD&A issued on November fifteenth. 02:03 All dollar amounts discussed in today’s conference call are in Canadian dollars unless otherwise stated. The complete financial and operating results and consolidated financial statements for the third quarter of twenty twenty one were published on November fifteen and are available on NXT’s website, SEDAR’s website, and soon will be available on EDGAR’s website. 02:47 Now over to Eugene for the financial review.

02:53 Thank you, George. As George mentioned, our third quarter twenty twenty one financial statements and management discussion and analysis were filed on SEDAR’s website yesterday and will shortly be available on EDGAR. From a financial perspective, the focus remained on supporting the execution of the business development effort continuing to control and optimize costs. For the third quarter, our financial results were as follows. 03:19 Cash and short-term investments were two point eight million dollars at September thirty twenty twenty one and net working capital was four point zero three million dollars. The company received seven and fifty thousand US dollars of payments on an outstanding accounts receivable in October twenty twenty one. 03:41 Operating activities used one point zero seven million dollars of cash during the quarter and one point two three million dollars year-to-date. There was no revenue in Q3, but year-to-date revenue was three point one four million dollars. For the quarter, NXT recorded a net loss of approximately one point four three million dollars or zero point zero two dollars per share based on sixty four point seven million weighted average common shares outstanding. This compares to a net loss of one point four nine million dollars in the third quarter of twenty twenty or zero point zero two dollars per share. 04:16 For year to date, NXT Recorded a net loss of approximately one point five five million dollars or zero point zero two dollars per share, based on sixty four point six million weighted average common shares outstanding. This compares to a net loss of four point three seven million dollars year-to-date twenty twenty or zero point zero seven dollars per share. 04:36 Total operating expenses for the third quarter were one point five one million dollars including survey costs. This included non-cash expenses of zero point five seven million dollars related to amortization and stock based compensation expenses. Total operating expenses for year-to-date were four point six three million dollars including survey costs. This includes non-cash of one point five four million dollars related to amortization and stock based compensation expense. 05:07 G&A expenses increased twenty two thousand dollars or three percent in the third quarter of twenty twenty one compared to twenty twenty for the following reasons. Salaries benefits and consulting charges increased seventy five thousand dollars due to the decreasing Canada emergency rate – subsidy rates offset by lower vacation expense in the third quarter. 05:28 Boarding professional fees of public company costs decreased ninety one thousand dollars or thirty five percent due to decrease legal fees. Premises, administrative and overhead costs decreased fifty two thousand dollars or twenty six percent through the receipt of the Canada emergency rent subsidy in twenty twenty one. 05:51 This development costs were minimal both periods as travel restrictions continue due to the COVID-19 pandemic. And stock based compensation expenses were higher in twenty twenty one versus twenty twenty by ninety one thousand dollars through the implementation of the RSU plan and the employee share purchase plan. 06:10 G&A expenses decreased two hundred thousand dollars or eight percent year-to-date in twenty twenty one compared to twenty twenty for the following reasons. Salaries benefits consulting charges increased seventy three thousand dollars due to the decreasing Canada emergency wage subsidy rate again offset by lower vacation expense. Order and professional fees of public company costs decreased one hundred and fifty six thousand dollars due to lower legal fees. 06:37 Premises administrative overhead decreased one hundred and thirty two thousand dollars due to receipt of the Canada Emergency rent subsidy in twenty twenty one. Business development costs decreased one hundred and twenty seven thousand dollars as travel restrictions continued due to the COVID-19 pandemic and stock based compensation expenses were higher in year-to-date twenty twenty one versus twenty twenty by one hundred and forty one thousand dollars again through the implementation of the RSU plan and the employees repurchase plan. 07:09 Summarize some of the key financial points, we ended the quarter with two point eight million dollars of cash and short-term investments on hand, networking capital down of four point zero three million dollars and we received seven hundred and fifty thousand US dollars in October for outstanding accounts receivable in respect to the pre-existing SFD’s data sales earlier in the year with remaining six hundred and fifty thousand US dollars expected to be received later in the fourth quarter. Our main focus continues to be on the execution of NXT’s commercial opportunities. 7:43 I would now like to hand the call back over to George further discuss our business update and forward plans.

07:50 Thank you, Eugene. First, I want to convey my sincere hope that everyone is well and continues to stay healthy at this time. As Eugene mentioned, although there were no survey revenues in Q3. We did receive seven and fifty thousand US dollars from existing data sales and the third quarter remained very productive for the company on most . Progress continues with respect to the development the SFDGT, which is the geothermal sensor family, for which NXT receiving advisory services and funding from the National Research Council of Canada's Industrial research Assistance program. 08:41 NXT tested existing SFD sensors under different operating parameters associated to subsurface conditions favorable for geothermal resources. This past results have demonstrated the development of a dedicated as have SFD geothermal sensor family can be accelerated. We have a number of companies that are interested in using SFD and currently in the process of negotiating two contracts, one domestic and one international. We are hopeful that the company will be able to update the market with more details very soon. 09:23 NXT is continuing the development and processing all our terms that we'll assist in that reviewed mapping interpretation and the integration of SFD data. SFD has big and NXT has begun preliminary work to extend these methods and processes to the raw data and the shown output and output shown to potential clients based and output show them potential clients. Based on the positive feedback now we are reflecting the value in commercial proposals. 10:04 As previously communicated, these enhancements will help drive the integration of SFD data and results into the overall upstream exploration cycle. We also recently announced that the patent in India has been offshore granted, which has already generated commercially interest in the country. And also among operators. 10:34 The company is currently engaged in discussion with these operators, and we'll update you as well. Africa business development, NXT is most promising opportunities still lies in the Nigeria frontier basis and remains our priority as we believe our business with the National company and other international explorers will continue. We recognized as Africa as one of the most important confidence for sustained hydrocarbon on geothermal exploration. 11:10 The utilization of SFD will mitigate or exploration risk provide time and cost effective solutions in a friendly ESG manner. Turning out redemption to Latin America and Asia with projects where we have made significant progress since our last call. We are optimistic the current negotiations will lead to new and repeat business in Latin America and Asia. We are pleased to report that NXT has made excellent progress with respect new survey opportunities in Q3 with companies in South and Southeast Asia. With hope to provide the market with further information and update in June course. 12:02 In summary, Hydrocarbon SFD survey opportunities continue to progress well within our core areas of focus in Africa, Mexico, Asia and South America. Additionally, multiple geothermal companies have inquired about our SFDGT services. We remain highly optimistic, about the prospects for new surveys and extremely focused on contract execution in order to deliver value to our shareholders. 12:36 In conclusion, on behalf of our Board of Directors and the entire NXT team, I want to thank you all of our shareholders for their continued support. We reached the best of health to you and your families. Now I ask Patrick to the line for a few questions.

12:59 Thank you. We will now take questions from the telephone lines. First question is from Gary DiStefano from ThinkEquity. Please go ahead.

13:39 Hey, George, Eugene, next team. Congratulations on your continued successes to date. Just wanted to ask a quick question and we have two quick questions, and I'll skip my follow-up. But just one around the general expectations for the split and revenue between service sales and data sales going forward? And the other question is do you have any anticipation around any other potential revenue verticals going forward as well? I appreciate your time. Thanks.

14:17 So I'll answer the first question. So, we are it's regards to our split on service revenue versus data sale, we're forecasting most of ours sales to be service revenue and but we're actively, we're always open to sales of out of our data library.

14:44 That was a second, it was different verticals? So yes, we are in the process of establishing the domestic and the international verticals. We have been approached with an buying a number of companies now also to join our special purpose vehicle for the domestic one and also, we are working on the international one currently as well. And as soon as we know, how things are going to progress, we are going to give an update. 15:23 But thank you again for your questions.

15:26 Great. Thank you.

15:29 Thank you. The next question question is from Michael Mork from More Capital Management. Please go ahead.

15:41 Yeah. Thanks for the update. As a good update. Yeah, two questions. One, once the client has used the SFD technology and has seen the time and the cost advantages like ten to one whatever it is, why does it take so long to get the second follow on contract.

16:03 Thank you, Mike. Good hear from you. You want to answer.

16:10 Yes.

16:11 Okay. You start and then I continue.

16:13 Historically. Mike this is how historically we have seen from the recommendation to the drilling of the exploration well, it takes about four years. And this is maybe the custom or the normal time of exploration. We are trying to facilitate it and we see that the environment of the market is being accelerated and that brings up to maybe more need for a new technology and in tools. And one of these new tools that it can be to play to accelerate this process of the time cycle.

16:51 Also the pandemic was a big part of accessing people because if you don't meet people face to face, it's much there.

17:03 But you can see in success where in general right took was done in twenty fifteen that this discovery well was this drilled in twenty twenty. Same with some of the twenty twelve early service and it was Mexico, it will drill in twenty sixteen and maybe later twenty eighteen and twenty eighteen. Also are the core success that we have had with our recommendations worldwide. 17:26 Similar to Argentina, which was maybe shorter timeframe I was not reached as the other ones in a half year.

17:33 Okay. That's very helpful. And my second question is, the national oil company’s analyses, they're take a little bit longer for obvious reasons. But I'll since you your last two board members have extensive private public company experience do you think we can attack the profit sector more now and have both the analysis nd the profit sector clients?

18:04 Both of our board members have expressed the last board meetings, the introduction of SFD in their domain one of them would be Africa, which would be further introduction of the technology when we are going to a Nigeria also in Indonesia and the surrounding countries there and which would include Asia, India and so on. One of the issues that we have with the repeat service is the procurement process is lengthy and is not only the EMP companies, but also the government agencies is government offices. And things become a little bit more political rather than commercial. And so as a result of that, you have to work very, very hard to make sure that we will secular these contact, which we believe that we have to wait and extremely hopeful that we are going to return to generating contract revenues as opposed to selling our current data that is existing, which is also very good because you have ninety nine percent growth on it, So it has been acquired and interpreted and so. So it's a good source of revenue and it's a wonderful recognition of the value of the SFD technology. 19:53 So, I hope that you question, Mike.

19:55 Yes, you did. It is very good. Thank you very much.

20:02 Thank you. The next question is from Thomas Wood Please go ahead.

20:09 Hey, George and Team. Thanks so much for the updates. I was just wondering if you guys could add a little bit more color to the geothermal stuff, it seems like that's a really exciting new venture and if nothing else very topical right now, and I'm wondering if you could talk about timeline of developing the technology kind of what some benchmarks are that you're looking for, any plans for marketing or talking about that just anything more on that realm? Thanks so much.

20:35 Thank you, Tom. Great to hear from you. Dr. William and I, we are working very hard on the sensor development and also for the geothermal and also testing the technology and evaluating it and so on. We are very pleased to have the national research console assistance, so and that is on the development side. Now the companies are interested and utilizing the technology, which is also very positive. I will ask all just to elaborate on the importance why these geothermal companies could benefit from utilizing the technology first.

21:34 Yes, pointed out, this happen a coming development for the SFD technology and it's very important because this is a more long term solution as we go forward, especially in the power space, which is becoming more important and overall energy mix. And geothermal is one of those few green or alternative power sources that is more non intermittent, it’s more base slowed, more predictable. So the sooner SFD occupies the space in that sector, the better it is going to be we have some very good results that we've seen from the test surveys that we have undertaken so far as part of the development. So, yes, we are quite excited about where this would go. And hopefully that comes into conclusion very soon.

22:30 Yes. We are hoping to secure the contract soon. Any follow-up questions Tom?

22:40 Yes. Just for clarity. So are you guys feeling as though the technology is working now? And now it's just a matter of trying it out with some first time clients, or are there still developmental benchmarks that you guys are looking to accomplish?

22:55 Both. So, that the technology as it stands today can be utilized, but we are working on also improving the technical side to suit the geothermal application more because there are several factors that are shared between and I'm speaking too much the extension.

23:23 It’s another example.

23:25

23:30 It's basically comes down from the fact that the hydrocarbon in the Geothermal technological requirements are very, very similar in fact at the end of the day. And that's what makes the current system usable with few modifications, of course, needed to make it fit appropriately into the geothermal space. But the current system, yes, it is deployable the way it is right now. And I think as George pointed out and We pointed out later working on finalizing some of the commercial opportunities. And at the same time, in know we were continues on having a dedicated sense of family for the geothermal, which is basically redesigned from the ground up specifically for geothermal applications. So, it would fit better. It would work better be faster, be more predictable and so, but that's not going to stop this pursuing the commercial opportunities in the meantime.

24:35 Thank you guys so much. Appreciate it.

24:40 Thank you. We have no further questions registered. At this time, I would like to turn meeting back over to Liszicasz.

24:50 In that case, if there are normal questions, I would like to thank everyone for participating our conference call today. And until next time, you're staying with good health and your families and if you have any other questions, please give us a call. We are always available unless we are going to be on the road, which I very much focused. Thank you very much.

25:22 Thank you. The conference has now ended. Please disconnect your lines at this time and thank you for your participation.