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UNITED
STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C.  20549
FORM 20-F/A

(Amendment No. 1)



(Mark One)

[    ]	   Registration Statement Pursuant To
Section 12(b) or (g) of the Securities Exchange Act of 1934

OR

[ X ]   	Annual
Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934
for the fiscal year ended December 31, 2017.

OR

[    ]   	Transition Report Pursuant to Section
13 or 15(d) of the Securities Exchange Act of 1934

OR

[    ]   	Shell Company Report Pursuant to Section
13 or 15(d) of the Securities Exchange Act of 1934



Commission file number 000-24027



NXT Energy
Solutions Inc.

(Exact Name
of Registrant as Specified in its Charter)

Alberta,
Canada
(Jurisdiction of incorporation or organization)



Suite 302,
3320 - 17th Avenue SW
Calgary, Alberta, Canada, T3E 0B4
(Address of principal executive offices)



Jakub Brogowski

Phone: 403-206-0807

Facsimile:
403-264-6442

Suite 302,
3320 - 17th Avenue SW
Calgary, Alberta, Canada, T3E 0B4
(Name, Telephone, E-mail and/or Facsimile number and address of Company Contact Person)



Securities registered or to be registered
pursuant to Section 12(b) of the Act: None

Securities registered or to be registered
pursuant to Section 12(g) of the Act:

Common Shares

(Title of Class)

Securities for which there is a reporting
obligation pursuant to Section 15(d) of the Act: None

Indicate the number of outstanding shares
of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report:

58,161,133 common shares outstanding
as of December 31, 2017 (62,832,843 common shares outstanding as of April 30, 2018)



Indicate by check mark if the registrant
is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.




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|Yes |  |  | No | X
|--- |  |  | -- | -



If this report is an annual or transition
report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934

|Yes | _ |  | No | X
|--- | - |  | -- | -

Note-Checking the box above will not
relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their
obligations under those Sections.

Indicate by check mark whether the
registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days.

|Yes | X |  | No | 
|--- | - |  | -- | 



Indicate by check mark whether the registrant
has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted
and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter
period that the registrant was required to submit and post such files).



|Yes | X |  | No | 
|--- | - |  | -- | 



Indicate by check mark whether the
registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated
filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

|Large accelerated filer |  |  | Accelerated filer |  |  | Non-accelerated filer   | X  
|----------------------- |  |  | ----------------- |  |  | ----------------------- | ---
|                        |  |  |                   |  |  | Emerging growth Company | ___



Indicate by check mark which basis
of accounting the registrant has used to prepare the financial statements included in this filing.

|U.S. GAAP | X |  | International Financial Reporting Standards as issued by the International Accounting Standards Board |  |  | Other | 
|--------- | - |  | ----------------------------------------------------------------------------------------------------- |  |  | ----- | 



If “Other” has been checked
in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.

|Item 17 |  |  | Item 18 | 
|------- |  |  | ------- | 



If this is an annual report, indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)

|Yes |  |  | No | X
|--- |  |  | -- | -



220-F/A for the year ended December 31, 2017


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Explanatory Note



This Amendment No. 1 to Annual Report on Form
20-F/A ("Form 20-F/A") is being filed by NXT Energy Solutions Inc. (the "Registrant") as an amendment to the
Registrant's Annual Report on Form 20-F for the fiscal year ended December 31, 2017 ("Form 20-F"), filed with the U.S.
Securities and Exchange Commission ("SEC") on May 1, 2018.



The Form 20-F/A is being filed to update
Item 15 to provide more detail and to update the Management’s Discussion and Analysis, which is attached as Exhibit 15.3. 
This Form 20-F/A makes no other changes to the Form 20-F of the Registrant. Other than what is stated above, this Form 20-F/A does
not in any way modify or update any other disclosures in, or amend, update or restate the information in any other part of, the
Form 20-F as originally filed on May 1, 2018 (including without limitation the financial statements originally provided under Item
18 in the Form 20-F). This Form 20-F/A does not reflect events occurring after the original filing of the Form 20-F on May 1, 2018
and should be read in conjunction with the originally filed Form 20-F, as well as the Registrant’s filings with the SEC subsequent
to the original filing of the Form 20-F.



TABLE OF CONTENTS

PART I

|ITEM
    1.    IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS                    | 5 
|--------------------------------------------------------------------------------------- | --
|ITEM
    2.   OFFER STATISTICS AND EXPECTED TIMETABLE                                   | 5 
|ITEM
    3.    KEY INFORMATION                                                          | 5 
|ITEM
    4.   INFORMATION ON THE COMPANY                                                | 15
|ITEM
    4A.  UNRESOLVED STAFF COMMENTS                                                 | 25
|ITEM 5.    OPERATING AND FINANCIAL REVIEW AND PROSPECTS                                 | 25
|ITEM 6.    DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES                                   | 39
|ITEM 7.    MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS                            | 49
|ITEM 8.    FINANCIAL INFORMATION                                                        | 51
|ITEM 9.    THE OFFER AND LISTING                                                        | 52
|ITEM 10.  ADDITIONAL INFORMATION                                                        | 53
|ITEM 11.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                    | 66
|ITEM 12.  DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES                        | 66
|PART II                                                                                
|ITEM 13.   DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES                              | 67
|ITEM 14.   MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS | 67
|ITEM 15.   CONTROLS AND PROCEDURES                                                      | 68
|ITEM 16A.  AUDIT COMMITTEE FINANCIAL EXPERT                                             | 68
|ITEM 16B.  CODE OF ETHICS                                                               | 68
|ITEM 16C.   PRINCIPAL ACCOUNTANT FEES AND SERVICES                                      | 68
|ITEM 16D.   EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES                  | 69
|ITEM 16E.   PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS      | 69
|ITEM 16F.   CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT                                | 69
|ITEM 16G.   CORPORATE GOVERNANCE                                                        | 69
|ITEM 16H.   MINE SAFETY DISCLOSURE                                                      | 69
|PART III                                                                               
|ITEM 17.    FINANCIAL STATEMENTS                                                        | 69
|ITEM 18.    FINANCIAL STATEMENTS                                                        | 69
|ITEM 19.    EXHIBITS                                                                    | 70



320-F/A for the year ended December 31, 2017


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FORWARD-LOOKING STATEMENTS

Except for any historical information
contained herein, the matters discussed in this Annual Report on Form 20-F/A contain certain “forward-looking statements”
within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to our financial condition, results of
operations and business. These statements relate to analyses and other information which are based on forecasts of future results
and estimates of amounts not yet determinable. These statements also relate to our future prospects, developments and business
strategies. These forward-looking statements are identified by their use of terms and phrases such as “anticipate”,
“believe”, “could”, “estimate”, “expect”, “intend”, “may”,
“plan”, “predict”, “will” and similar terms and phrases, including references to assumptions.
These forward-looking statements involve risks and uncertainties, including current trend information, projections for deliveries
and other trend projections, that may cause our actual future activities and results of operations to be materially different from
those suggested or described in this Annual Report on Form 20-F/A.

These risks include:

| | · | our ability to generate sufficient ongoing cash flow from operations or to raise adequate capital
to allow us to grow the business and continue operations;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | conducting operations in international markets;
| | - | -----------------------------------------------

| | · | the availability of suitable aircraft used in conducting our operations;
| | - | ------------------------------------------------------------------------

| | · | the emergence of alternative competitive technologies;
| | - | ------------------------------------------------------

| | · | protection of our intellectual property and rights to our Stress Field Detection (“SFD®”) technology;
| | - | -----------------------------------------------------------------------------------------------------

| | · | the loss of key personnel;
| | - | --------------------------

| | · | our dependence on a limited number of clients;
| | - | ----------------------------------------------

| | · | foreign currency and interest rate fluctuations may affect our financial position;
| | - | ----------------------------------------------------------------------------------

| | · | recent low commodity prices for oil and gas have impacted demand for our services and ongoing volatility
in oil and natural gas commodity prices may reduce demand for our services in the future; and
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | other factors described herein under “Risk Factors” (see Item 3. D.)
| | - | --------------------------------------------------------------------

If one or more of these risks or uncertainties
materialize, or if underlying assumptions prove incorrect, our actual results may vary materially from those expected, estimated
or projected. Given these uncertainties, users of the information included in this Annual Report on Form 20-F/A, including investors
and prospective investors, are cautioned not to place undue reliance on such forward-looking statements. We do not intend to update
the forward-looking statements included in this Annual Report on Form 20-F/A.

In this Annual Report on Form 20-F/A,
except as specified otherwise or unless the context requires otherwise, “we”, “our”, “us”,
the “Company”, and “NXT” refer to NXT Energy Solutions Inc. and its subsidiaries. All references to “fiscal”
in connection with a year shall mean the year ended December 31.

All financial information contained herein
is expressed in Canadian dollars (“Cdn$”) unless otherwise stated.





420-F/A for the year ended December 31, 2017


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PART I

ITEM
1.        IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not applicable.

ITEM
2.       OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable.

ITEM
3.       KEY INFORMATION

A.	           Selected financial data.

The following historical financial
information should be read in conjunction with the section entitled “Operating and Financial Review”
(see Item 5 herein) and our audited consolidated financial statements and related notes, which are included elsewhere in this document.
The consolidated statements of income (loss) data for the years ended December 31, 2017, 2016 and 2015 and selected consolidated
balance sheet data as of December 31, 2017 and 2016 are derived from, and qualified by reference to, our audited consolidated
financial statements that are included elsewhere in this Form 20-F/A. The selected consolidated balance sheet data as of December 31,
2015, 2014 and 2013, and the consolidated statements of income (loss) data for the years ended December 31, 2014 and 2013
is derived from our previously filed audited consolidated financial statements (which are not included in this Form 20-F/A).

INCOME (LOSS) & COMPREHENSIVE
INCOME (LOSS)





|                                                              | (expressed in Canadian Dollars)                  | 2017        | 2016         | 2015        | 2014        | 2013     
|------------------------------------------------------------- | ------------------------------------------------ | ----------- | ------------ | ----------- | ----------- | ---------
|Survey revenues                                               | $                 -                              | $1,447,269  | $ 17,422,151 | $ 3,913,367 | $ 2,684,095
|Operating expenses                                            |                                                  |             |              |             |            
|                                                              | Survey costs                                     | 1,289,429   | 1,157,185    | 5,095,691   | 431,518     | 1,632,159
|                                                              | General and administrative                       | 4,960,961   | 5,645,459    | 5,049,690   | 4,132,108   | 4,112,787
|                                                              | Stock based compensation expense                 | 581,356     | 790,500      | 1,081,000   | 658,000     | 492,000  
|                                                              | Amortization expense                             | 1,897,576   | 2,104,864    | 704,943     | 67,162      | 85,484   
|                                                              |                                                  | 8,729,322   | 9,698,008    | 11,931,324  | 5,288,788   | 6,322,430
|Other expense (income)                                        |                                                  |             |              |             |            
|                                                              | Interest expense (income), net                   | 4,485       | (17,254)     | (13,910)    | (50,824)    | (25,455) 
|                                                              | Foreign exchange (gain) loss                     | 69,676      | 272,713      | (712,480)   | (158,817)   | (150,350)
|                                                              | Other expense (income)                           | 91,370      | 218,853      | 529,081     | 354,781     | 107,985  
|                                                              | Increase (decrease) in fair value ofUS$ Warrants | -           | -            | -           | 42,800      | 1,371,500
|                                                              |                                                  | 165,531     | 474,312      | (197,309)   | 187,940     | 1,303,680
|Income (loss) before income taxes                             | (8,894,853)                                      | (8,725,051) | 5,688,136    | (1,563,361) | (4,942,015)
|Income tax expense (recovery)                                 | 75,545                                           | 374,511     | (4,852,092)  | -           | 399,546    
|Net income (loss) and comprehensiveincome (loss) for the year | (8,970,398)                                      | (9,099,562) | 10,540,228   | (1,563,361) | (5,341,561)
|Net income (loss) per share -Basic                            | (0.16)                                           | ($ 0.17)    | $0.22        | ($ 0.04)    | ($0.13)    
|Diluted (1)                                                   | (0.16)                                           | ($ 0.17)    | $0.21        | ($ 0.04)    | ($0.13)    
|Weighted average # of commonshares outstanding                |                                                  |             |              |             |            
|Basic                                                         | 54,523,113                                       | 53,526,155  | 47,782,647   | 44,375,540  | 41,660,190 
|Diluted (1)                                                   | 54,523,113                                       | 53,526,155  | 49,041,383   | 44,375,540  | 41,660,190 
|                                                              |                                                  |             |              |             |            
|# of common shares outstanding                                | 58,161,133                                       | 53,856,509  | 53,306,109   | 44,958,843  | 42,418,326 







(1)in periods with a loss, the diluted total excludes the 8,000,000 convertible preferred
shares which were outstanding until convertedon August 31, 2015, as their effect is anti-dilutive.





520-F/A for the year ended December 31, 2017


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Balance Sheet Data



(expressed in Canadian Dollars)



|                             | 2017                                   | 2016         | 2015         | 2014         | 2013        
|---------------------------- | -------------------------------------- | ------------ | ------------ | ------------ | ------------
|Working capital (deficiency) | $(318,166)                             | $1,703,510   | $ 7,534,128  | $ 5,029,013  | $ 1,618,719 
|                             |                                        |              |              |              |             
|Current assets               | 1,284,008                              | 2,316,341    | 10,691,918   | 5,811,639    | 6,577,175   
|Deposits                     | 518,765                                | -            | -            | -            | -           
|Property and equipment, net  | 778,685                                | 3,348,557    | 3,678,985    | 237,464      | 262,818     
|Intellectual property, net   | 21,339,533                             | 23,024,268   | 24,709,000   | -            | -           
|Total assets                 | 23,920,991                             | 28,689,166   | 39,079,903   | 6,049,103    | 6,839,993   
|                             |                                        |              |              |              |             
|Current liabilities          | 1,602,174                              | 612,831      | 3,157,790    | 782,626      | 4,958,456   
|Long-term liabilities        | 741,408                                | 264,775      | 300,462      | 50,000       | 64,560      
|Total liabilities            | 2,343,582                              | 877,606      | 3,458,252    | 832,626      | 5,023,016   
|                             |                                        |              |              |              |             
|Shareholders’ equity:        |                                        |              |              |              |             
|                             | Common shares                          | 88,121,286   | 85,966,393   | 85,051,553   | 65,792,307  
|                             | Preferred shares                       | -            | -            | -            | 232,600     
|Contributed capital          | 8,195,075                              | 7,613,719    | 7,239,089    | 6,400,789    | 5,889,914   
|                             | Deficit                                | (75,449,886) | (66,479,487) | (57,379,926) | (67,920,154)
|                             | Accumulated other comprehensive income | 710,934      | 710,935      | 710,935      | 710,935     
|Total equity                 | 21,577,409                             | 27,811,560   | 35,621,651   | 5,216,477    | 1,816,977   
|Total liabilities and equity | 23,920,991                             | 28,689,166   | 39,079,903   | 6,049,103    | 6,839,993   





Throughout the history of the Company there
have been no dividends declared.



The following table sets forth certain exchange
rates between our financial reporting currency, the Canadian dollar, and the United States dollar (“US$”) based on
the noon rate of exchange for the US$, expressed in Canadian dollars, as reported by the Bank of Canada (i.e. multiply by these
rates to convert Cdn$ to US$).





|Date                                       | US$ per Cdn$ Exchange Rates
|------------------------------------------ | ---------------------------
|                                           |                            
|Last 6 months ended                        | High                       
|                                           |                            
|March 31, 2018                             | 0.7794                     
|February 28, 2018                          | 0.8138                     
|January 31, 2018                           | 0.8135                     
|December 31, 2017                          | 0.7971                     
|November 30, 2017
        October 31, 2017 | 0.7759
        0.8018      
|                                           |                            
|                                           |                            
|Last Quarter & Last 5 Years                | Average                    
|Quarter ended March 31, 2018               | 0.7910                     
|Year ended December 31, 2017               | 0.7701                     
|Year ended December 31, 2016               | 0.7555                     
|Year ended December 31, 2015               | 0.7820                     
|Year ended December 31, 2014               | 0.9054                     
|Year ended December 31, 2013               | 0.9710                     
|                                           |                            
|                                           | Ending                     
|March 31, 2018                             | 0.7756                     









620-F/A for the year ended December 31, 2017


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B.           	Capitalization and indebtedness.

Not
applicable.

C.	           Reasons for the offer and
use of proceeds.

Not
applicable.

D.	           Risk factors.

Investing in our common shares involves
a high degree of risk. In addition to the other information included in this document, you should carefully consider the risks
described below before purchasing our common shares. If any of the following risks actually occur, our business, financial condition
and results of operations could materially suffer. As a result, the trading price of our common shares could decline and you might
lose all or part of your investment.

Our ability to continue operating
is not certain.

We are in the early stages
of realizing the goal of widespread industry acceptance of our SFD® technology, during which we may have a
significant economic dependency on a limited number of clients and prospects. As such, there is uncertainty about the timing and
magnitude of future revenues. We recognize that there is limited ability to support operations indefinitely without
generating sufficient new revenue sources or securing additional financing if such should become required.

The financial statements rely upon
estimates and assumptions that could be incorrect.

The preparation of financial statements
requires our management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets
and liabilities including the disclosure of contingent assets and liabilities as well as revenues and expenses recorded in our
financial statements. Estimates made relate primarily to the measurement of accrued liabilities, stock-based compensation expense,
valuation of future income tax assets, estimates for asset retirement obligations, and the useful lives of capital assets and intellectual
property.

The estimates and assumptions are reviewed
periodically and are based upon the best information available to management; however, we cannot provide assurance that future
events will not prove that these estimates and assumptions are inaccurate. Any revisions to our estimates and assumptions may have
a material impact on our future reported net income or loss and assets and liabilities.

Volatility in oil and natural gas
commodity prices may affect demand for our services.

We incur a risk of market changes in
oil and natural gas prices. Prospective revenues from the sale of our services can be impacted by oil and natural gas price changes.
The impact of price changes on our ability to enter into SFD® survey contracts cannot be readily determined; however, in general,
if commodity prices decline significantly, our opportunity to obtain and execute SFD® survey contracts will also likely decline.

Our financial position is affected
by foreign currency fluctuations.

We currently conduct cash transactions
and have holdings in Canadian dollars, U.S. dollars and periodically have holdings of local currency in other countries. We generally
contract to earn revenues in U.S. dollars and potentially may earn revenues in Canadian dollars and other foreign currencies.

720-F/A for the year ended December 31, 2017


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Our reporting currency is in Canadian
dollars. We currently do not engage in currency hedging activities, but are reviewing opportunities to do so. Our cash positions
and potential foreign currency revenue streams in currencies other than Canadian dollars exposes us to exchange rate fluctuations
between the Canadian dollar and foreign currencies.

Our financial position will be affected
by exchange rate fluctuations. We may earn revenue and incur expenses denominated in foreign currencies, yet report our financial
results in Canadian dollars. Furthermore, we intend to enter into contracts to provide services in foreign countries and may periodically
conduct business in other currencies such as the Euro. Changes in currency exchange rates could have an adverse effect on the Company's
business, financial condition and results of operations.

Our net income or loss is impacted
by interest rate fluctuations.

We periodically invest available cash
in short term investments that generate interest income that will be affected by any change in interest rates (See Item 11).

We rely upon the availability of
aircraft to conduct our survey operations.

In April, 2017, NXT completed a sale
and leaseback agreement of its aircraft with a Calgary based international aircraft services organization (the “Lessor”).
The terms of the agreement resulted in NXT selling its’ 1997 Cessna Citation Ultra 560 jet aircraft that was purchased in
2015. NXT has leased the aircraft over an initial term of 60 months and retains all existing operating rights and obligations.
NXT is required to make monthly payments to the Lessor of approximately US$40,000. NXT has the option to extend the term of the
lease by an additional two years. Should NXT want to repurchase the aircraft at the end of the initial lease term, the purchase
price is US$1,450,000. When the aircraft is not needed for use by NXT, we seek to earn charter hire revenues from the aircraft
through a 3rd party, Air Partners.

Air Partners also has access to an
alternate, similar model aircraft (certified for the use of our survey equipment) which could be charter hired for use by NXT if
needed.

In the event that NXT’s aircraft
is not available (due to damage, a need for extensive repairs, or other unforeseen events) to conduct survey projects, there is
a risk that suitable alternative aircraft may not be available on a timely basis from other charter operators when needed. This
inability to conduct survey operations could have a material adverse effect on the Company's business, financial condition and
results of operations.

We are a small business with limited
personnel and our inability to segregate duties between administrative staff is an internal control weakness.

Certain duties that are most appropriately
segregated between different employees are, due to our current limited staff, assigned to one individual.

Standard
internal control methodology involves the separation of incompatible functions by assigning these functions to separate individuals,
and in larger organizations, to separate departments. We often cannot allocate these functions to separate individuals because
our administrative staff is limited.

Although we
have adopted alternative control methods designed to compensate for the reduced ability to separate incompatible functions, these
alternative controls are not effective and there is more than a remote likelihood that our internal control over financial reporting
will not prevent or detect material misstatements if they should exist in our financial statements. This lack of separation of
duties exposes us to potential misappropriation of funds, embezzlement and other forms of fraud and could have a material adverse
effect on our business, financial condition and results of operations (see also Item 15).

We may periodically engage in transactions
with related parties.

We may periodically enter into related
party transactions with our officers and directors. The most significant transaction was a “Technology Transfer Agreement”
(the “TTA”) that was executed on December 31, 2006 between NXT and Mr. George Liszicasz, our CEO, President and Chairman
wherein we issued 10,000,000 convertible preferred shares to him in exchange for the rights
to the SFD® technology for use in hydrocarbon exploration. In 2013, a total of 2,000,000 of these preferred shares were converted
(on a one-to-one basis) into common shares, and the remaining 8,000,000 preferred shares were converted in August 2015.

820-F/A for the year ended December 31, 2017


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For a full history of the TTA see
also Item 4. part A, “Information on the Company - History and development of the Company”, and Item 4. part B. “Information
on the Company - Business Overview – Technology Transfer Agreement”.

Although we manage this potential conflict
of interest risk through maintenance of a strong independent board of directors (the “Board”), all related party transactions
have the potential for conflicts of interest that may compromise the ability of Board members to exercise their fiduciary responsibility
to NXT shareholders.

For the period December 1, 2017 to
January 31, 2018, Mr. Selby, one of the Company’s independent directors acted as the Interim CFO of the Company.

A single major shareholder who is
also a Board member and an officer of the Company retains the ability to influence or control the Company, and this influence or
control may result in a conflict of interest.

Mr. George Liszicasz, our CEO, is our
largest shareholder, and as of March 29, 2018 owns approximately 25% of our outstanding common shares and therefore has a substantial
influence in all shareholder matters.

Controls do exist to mitigate any potential
risks associated with this conflict of interest. Mr. Liszicasz adheres to a code of conduct which includes a fiduciary responsibility
to the Company and its shareholders and this conduct is governed by the independent Board of directors who collectively represent
a majority of the Board. Furthermore, all material related party transactions are disclosed publicly.

However, should these conflict of interest
controls not be effective, decisions could be made by the Company that may advantage Mr. Liszicasz and negatively impact other
shareholders.

Our rights to SFD® technology
may be challenged and we may need to defend our rights to the technology in the courts.

Our rights to ownership and use of
SFD® technology depended on Mr. Liszicasz having the lawful right to sell to NXT the exclusive rights to exploit the SFD®
technology for the exploration of hydrocarbons as agreed to in the TTA.

A risk exists that an unknown party
may claim some legal entitlement to our intellectual property, our rights to commercialize this intellectual property or our right
to create SFD® devices and processes. However, we believe that such a claim would be without merit.

The SFD®
technology is an essential component of our business plan. If a third party challenged our lawful entitlement to this technology,
the legal defense of our right to the technology may be expensive and could cause a loss of our right to the SFD® technology,
or a protracted legal process to assert our right to the technology would have a material adverse effect on the Company's business,
financial condition and results of operations.

We rely on specialized equipment,
including a limited number of SFD® sensors, and this limitation may affect our ability to conduct business.

We
rely on specialized data acquisition equipment, including a limited number of SFD® sensor devices, to conduct our aerial SFD®surveyoperations. We would be at risk if these survey sensors
were to become damaged, destroyed, worn out, stolen or in any way became unavailable for use in operations prior to us creating
and testing additional sensors. Should the sensors become unavailable for any reason, our ability to conduct surveys could be delayed
for several months as we built new sensors. During this period we may become unable to satisfy contractual obligations, which may
jeopardize future revenue opportunities and may potentially result in a client drawing on a contract performance bond posted by
the Company or otherwise making claims against the Company for breach of contract.

920-F/A for the year ended December 31, 2017


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In addition, an inability to satisfy
contractual obligations may have an adverse effect on our developing reputation within the oil and gas community.

NXT seeks to mitigate this risk by
researching new designs and constructing additional SFD® sensor devices.

As the Company is in the early commercialization
phase, SFD® surveys have not been tested over all potential geological conditions. Some geological conditions may subsequently
be proven to be unsuited for SFD® surveys thereby creating unforeseen limitations to the application of SFD® surveys.

Any limitation to the application of
SFD® surveys has the potential of restricting future revenue opportunities and if not properly disclosed to industry clients,
such limitations may impact the reputation of the Company with these clients.

Unless we pursue ongoing technological
improvement and development, we may be unable to respond to changes in customer requirements or new competitive technologies.

We must continue to refine and develop
our SFD® survey system to make it scalable for growth and to respond to potential future competitive pressures. These improvements
require substantial time and resources. Furthermore, even if resources are available, there can be no assurance that the Company
will be commercially or technically successful in enhancing the technology. Our inability to keep pace with new technologies and
evolving industry standards and demands could have a material adverse effect on our business, financial condition and results of
operations.

We rely on a limited number of key
personnel who collectively possess the knowledge and skills to conduct SFD® surveys and interpret SFD® data as required
to meet contract obligations. Additional or replacement personnel cannot be found and trained quickly. The loss of any of these
key persons or increased demand for our services from clients could impair our ability to meet contract obligations, thereby adversely
impacting our reputation and our ability to earn future revenue from clients.

We rely on a limited number of key
personnel who collectively possess the knowledge and skills to conduct SFD® surveys and interpret SFD® data as required
to meet contract obligations. Additional or replacement personnel cannot be found and trained quickly. The loss of any of these
key persons or increased demand for our services from clients could impair our ability to meet contract obligations, thereby adversely
impacting our reputation and our ability to earn future revenue from clients.

The Company's future success depends,
to a significant extent, on the continued service of its key technical and management personnel and on our ability to continue
to attract and retain qualified employees. The loss of the services of our employees or a failure to attract, retain and motivate
qualified personnel could have a material adverse effect on our business, financial condition and results of operations. We do
not have “key man” insurance on any of our personnel.

The Company put in place employment
agreements with all of its executive officers, including George Liszicasz, its President and CEO.

We have a dependence on Mr. Liszicasz
and three other staff members to be involved in theSFD® data interpretation process and to continue to enhance our
technology. We are working to minimize dependency on key personnel. Mr. Liszicasz has trained and continues to train a team of
signal interpreters to minimize our reliance on him to perform these functions. Currently, a total of four persons, two of which
are highly experienced, are trained to interpret SFD® signals.

Although we have engaged employees
with suitable credentials to work with Mr. Liszicasz to enhance our interpretation process and further develop the SFD® technology,
if we are unable to reduce dependence on Mr. Liszicasz and he becomes incapable of performing or unwilling to perform these functions,
then there may be an adverse effect on our ability to interpret the data from SFD® surveys or to enhance our technology.

Within the
province of Alberta, the skilled personnel that we require may periodically be in short supply and there is specialized training
required that can take several months in order for a new employee to become effective. If we cannot hire these
key personnel, we have inadequate time to train them or should we lose current personnel, then our ability to accept contracts
or meet contract commitments may be adversely affected, thereby restricting our ability to earn revenue.

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There is no certainty that an investor
can trade our common shares on public markets at a stable market price.

The Company has historically had a limited
public market for our common shares on the TSX Venture Exchange (the “TSX-V”), and the United States (“U.S.”)
OTC Markets Group’s Venture Stage Marketplace (the “OTCQB”) and there is a risk that a broader or more active
public trading market for our common shares will not develop or be sustained, or that current trading levels will not be sustained.
Effective March 22, 2016, the Company’s application to graduate from the TSX-V to the broader Toronto Stock Exchange (“TSX”),
Canada’s premier stock exchange listing, was approved.



The market price for the common shares
on the exchanges where our stock is listed has been, and we anticipate will continue to be, extremely volatile and subject to significant
price and volume fluctuations in response to a variety of external and internal factors. This is especially true with respect to
emerging companies such as ours. Examples of external factors, which can generally be described as factors that are unrelated to
the operating performance or financial condition of any particular Company, include changes in interest rates and worldwide economic
and market conditions, as well as changes in industry conditions, such as changes in oil and natural gas prices, oil and natural
gas inventory levels, regulatory and environment rules, and announcements of technology innovations or new products by other companies.
Examples of internal factors, which can generally be described as factors that are directly related to our consolidated financial
condition or results of operations, would include release of reports by securities analysts and announcements we may make from
time to time relative to our operating performance, clients exploration results, financing, advances in technology or other business
developments.

Because we have a limited operating
history and a limited history of profitability to date, the market price for the common shares is more volatile than that of a
seasoned issuer. Changes in the market price of the common shares, for example, may have no connection with our operating results
or the quality of services provided to clients. No predictions or projections can be made as to what the prevailing market price
for the common shares will be at any time, or as to what effect, if any, that the sale of shares or the availability of common
shares for sale at any time will have on the prevailing market price. Given the relatively low historic trading volumes, small
trades of NXT’s common shares can adversely and potentially dramatically affect the market prices for those shares.

Accordingly, investors in our common
stock should anticipate both volatile stock price and poor liquidity unless these conditions change.

You will be subject to the penny
stock rules to the extent our stock price on the OTCQB is less than $5.00.

Since the common shares are not listed
on a national stock exchange within the United States, trading in the common shares on the OTCQB is subject, to the extent the
market price for the common shares is less than $5.00 per share, to a number of regulations known as the "penny stock rules".
The penny stock rules, subject to certain exemptions, require a broker-dealer to deliver a standardized risk disclosure, the
form of which is developed by the U.S. Securities and Exchange Commission (the “SEC”) to provide the customer with
additional information, including current bid and offer quotations for the penny stock, the compensation of the broker-dealer
and its salesperson in the transaction, monthly account statements showing the market value of each penny stock held in the customer's
account, and to make a special written determination that the penny stock is a suitable investment for the purchaser and to receive
the purchaser's written agreement to the transaction. To the extent these requirements may be applicable, they will reduce the
level of trading activity in the secondary market for the common shares and may severely and adversely affect the ability of broker-dealers
to sell the common shares.

You should not expect to receive
dividends in the foreseeable future.

We have never paid any cash dividends
on our common shares and we do not anticipate that we will pay any dividends in the foreseeable future. Our current business plan
is to retain any future earnings to finance the expansion of our business. Any future determination to pay cash dividends will
be at the discretion of our Board of directors and will be dependent upon
our consolidated financial condition, results of operations, capital requirements and other factors as our Board of directors may
deem relevant at that time.

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Our right to issue additional capital
stock at any time could have an adverse effect on your proportionate ownership and voting rights.

We are authorized under our Articles
of Incorporation to issue an unlimited number of common shares and an unlimited number of preferred shares. We may issue these
shares under such circumstances and in such manner and at such times, prices, amounts and purposes as our Board of Directors may,
in its discretion, determine to be necessary and appropriate, subject to compliance with all applicable exchange regulations and
corporate and securities laws. Proportionate ownership and voting rights of common shareholders could be adversely affected by
the issuance of additional common shares which may result in common share value dilution.

We may not be able to protect our
trade secrets and intellectual property from competitors who would use this knowledge to eliminate or reduce our technological
advantage.

Our success and future revenue growth
will depend, in part, on our ability to protect our intellectual property (“IP”). We have commenced an IP strategy
process to obtain patents related to the SFD® technology, while also utilizing “trade secrets” protection of the
proprietary nature of our technology as applicable.

Initiatives to expand and protect our
IP (including patenting and new R&D initiatives) were very successful in 2017. Squire Patton Boggs LLP, a United States (“US”)
based leader in IP protection, has been advising NXT on our IP strategy, including the prior filing of an initial US provisional
patent application in May 2012. In November 2014, NXT filed a related patent amendment submission in the US and since that time
has undertaken new patent applications in select strategic international markets.

So far, SFD® patents have been
granted in Russia (January 2017), Japan (July 2017), Canada (August 2017), Europe (September 2017) and the United States (November
2017), and notices of allowance have been also received from Mexico (July 2017) and China (March 2018), which are areas of prime
commercial focus for the Company. As of the writing of this financial report, NXT has been granted patents, filed or received patent
allowance for SFD® in different 48 countries. The SFD® patents serve an important purpose beyond the protection they provide
to the proprietary SFD® technology. Our patents also serve as an independent third-party verification of the scientific principles
that form the basis of the SFD® process and its application.

The patent protection application process
requires disclosure of at least some aspects of our SFD® technology to third parties and ultimately public disclosure. This
disclosure could significantly increase the risk of unlawful use of our technology by third parties. Furthermore, we have no assurance
that, even if we seek patent protection, a patent could be registered to protect our IP in all or any jurisdictions within North
America or other countries throughout the world. If registered, there can be no assurance that it would be sufficiently broad to
protect our technology or that any potential patent would not be challenged, invalidated or circumvented or that any right granted
thereunder would provide meaningful protection or a competitive advantage to us. Finally, protection afforded by patents is limited
by the financial resources available to legally defend IP rights. We currently do not possess the required financial resources
to fund a lengthy defense of our rights if challenged by a much larger competitor or an oil and gas Company.

We do enjoy common and contract law
protection of our technology and trade secrets. Employees and contractors are governed by confidentiality agreements as well as
a fiduciary responsibility to protect our technology, supporting documentation and other proprietary information.

Our strongest protection of the SFD®
technology comes from restricting access to knowledge concerning the technology. Only a very limited number of NXT personnel have
access to or knowledge of the underlying SFD® technology and no one employee and only one officer has access or knowledge of
all aspects of the SFD® system. Currently, no third party has any significant knowledge of the technology. As further protection,
SFD® equipment does not leave the direct control of NXT employees, thereby preventing unauthorized replication of the equipment.

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The Company reassesses the appropriateness
of its IP protection strategy on an ongoing basis and seeks advice from IP advisors as necessary.

It is possible that a third party will
copy or otherwise obtain and use the Company's technology without authorization, develop a similar technology independently or
design around the Company's secrets. Accordingly, there can be no assurance that the steps taken by the Company to prevent misappropriation
or infringement of our IP will be successful.

An inability to protect our IP would
make it possible for competitors to offer similar products and services that could have a material adverse effect on our business,
financial condition and results of operations.

We experience operational hazards
in our flight operations that may subject us to potential claims in the event that an incident or accident occurs.

We experience operational hazards in
our flight operations that may subject us to potential claims in the event that an incident or accident occurs.

The flight operations of SFD® surveys
are subject to the hazards associated with general flight operations. An aircraft accident may cause personal injury and loss of
life, as well as severe damage to and destruction of property or the SFD® sensors and related equipment.

Independent third parties provide all
the services required to maintain and operate the aircraft; they bear the primary risks of flight operations. These services are
provided by an organization accredited by Transport Canada to operate aircraft in accordance with Transport Canada approved and
audited operating procedures. The aircraft operator employs the required pilots, aircraft maintenance engineers and support personnel
and ensures that they operate within their Transport Canada operating certificate. Our employees do not perform any airworthiness
or flight safety operations.

We require the flight contractor to
maintain appropriate insurance coverage for the risks associated with aircraft operations, and we obtain insurance coverage to
provide us with additional risk protection. In addition, we maintain general business insurance coverage, and believe that this
insurance and the policy limits are appropriate for the operational risks that we incur.

Despite our policy to not operate the
aircraft directly and our insurance coverage, we cannot avoid or alternatively be insured for all risks of flight operations. In
the event of an incident or accident we may be sued by injured parties in excess of our policy limits or for damages that are not
covered by our insurance policy. The magnitude of a lawsuit of this nature is not determinable. Furthermore, to the extent that
our SFD® equipment is damaged, we may be unable to conduct SFD® surveys for several months following an accident.

We are a Canadian Company and our
nationality may impair the enforceability of a judgment for any person resident outside Canada.

Since we are a Canadian Company and
most of our assets and key personnel are located in Canada, you may not be able to enforce a U.S. judgment for claims you may bring
against us, our assets, our key personnel or many of the experts named in this document. This may prevent you from receiving compensation
to which you may otherwise have a claim.

We are organized under the laws of
Alberta, Canada and substantially all of our assets are normally located in Canada. In addition, all but two of our current members
of our Board of directors and all of our officers are residents of Canada.As a
result, it may be impossible for you to affect service of process upon us or these individuals within the U.S. or to enforce any
judgments in civil and commercial matters, including judgments under U.S. federal securities laws. In addition, a Canadian court
may not permit you to bring an original action in Canada or to enforce in Canada a judgment of a U.S. court based upon civil liability
provisions of the U.S. federal securities laws.

We conduct operations in foreign countries,
which exposes us to several risks that may have a material adverse effect on the Company.

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We conduct operations in foreign countries,
which exposes us to several risks that may have a material adverse effect on the Company.

Criminal Activity and Social Instability
– we have operated in the past in foreign countries such as Colombia, which over the past two decades experienced significant
social upheaval and criminal activity relating to drug trafficking, kidnapping and terrorist acts. While the situation has improved
dramatically in recent years, there can be no guarantee that the situation will not deteriorate again, nor are these risks eliminated
as yet. Furthermore, other potential international survey locations may have similar or other indeterminate criminal or social
instability risks.

Systemic criminal activity in a country
or isolated criminal acts may disrupt operations, impact our ability to earn revenue, dramatically add to our cost of operations
or potentially prevent us from earning any survey revenue in a country.

In addition, foreign markets may be
susceptible to a higher risk of corruption and bribery. All of NXT’s employees, contractors, and independent sales agents
are required to adhere to the Company’s code of conduct and business ethics, which prohibits illegal activities, including
any acts of bribery or corruption.

Political Instability-Any
changes in regulations or shifts in political attitudes are beyond the control of the Company and may adversely affect our business.
Exploration may be affected in varying degrees by government regulations which have the effect of restricting exploration and production
activities. These changes may adversely impact the laws and policies governing price controls, export controls, foreign exchange
controls, income taxes, expropriation of property, environmental legislation, site safety or other areas.

Currently, there are no restrictions
(other than the payment of local with-holding taxes) on the repatriation back to Canada of our earnings in foreign countries in
which we have operated, such as Colombia and Bolivia; however, there can be no assurance that significant restrictions on repatriation
to Canada of earnings will not be imposed in the future.

Our operations may also be adversely
affected by changes in laws and policies in Canada impacting foreign travel and immigration, foreign trade, taxation and investment.

Commercial Disputes –
While operating in a foreign country, we are subjected to local commercial laws which often involve executing contracts in a foreign
language. Although every effort is made to ensure we have access to an accurate English translation, misunderstanding and potential
disputes between parties may arise.

In the event of a dispute arising in
connection with our foreign operations for any reason, we may be subject to the exclusive jurisdiction of foreign courts or may
not be successful in subjecting foreign persons to the jurisdictions of the courts of Canada or enforcing Canadian judgments in
such other jurisdictions. We may also be hindered or prevented from enforcing our rights with respect to a government instrumentality
because of the doctrine of sovereign immunity.

Accordingly, these risk factors have
the potential of adversely reducing the level of survey revenue from our clients, our ability to operate effectively or our ability
to be paid for our services and may have a material adverse effect on our financial position.

Where possible, NXT utilizes risk mitigation
products offered by entities such as Export Development Canada (“EDC”). EDC financial products include insurance coverage
of contract accounts receivable, guarantee support for contract performance bonds, and wrongful call insurance for such bonds.

We rely upon the right to conduct
airborne surveys in foreign countries. These foreign operations expose us to the risks that we will be prevented from conducting
surveys when requested by clients.

The operation of our business, namely
conducting aerial SFD® surveys and interpreting SFD® data, is not subject to material governmental or environmental regulation
in Canada and the United States with the exception of flight rules issued by Transport Canada and the U.S. Federal Aviation Administration
(“FAA”) governing the use of commercial aircraft, including rules relating to low altitude flights. The requirements
in other countries vary greatly and may require permits and/or provide other
restrictions to conducting flight operations in the country that may restrict our ability to perform SFD® surveys.

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For example, in South American countries
in which we have operated, such as Colombia and Bolivia, SFD® surveys must comply with additional requirements not encountered
in Canada and the United States, including customs obligations and bonds related to the importation and exportation of the aircraft
into the country, obtaining permits from the local aviation authority, and obtaining permits from the local Air Force. We have
successfully operated in South America and other global regions in accordance with these typical requirements.

With our North America and International
experience to date, we do not anticipate any government controls or regulations that will prevent timely completion of SFD®
surveys. However, we may encounter government restrictions in other countries that may impact or restrict our ability to conduct
surveys.

If we encounter government regulation
and restrictions that impact or prevent us from conducting surveys in any country, then we will not be able to earn revenue in
the country and we may be exposed to forfeiting any performance bonds which may have been issued.

We caution that the factors referred
to above and those referred to as part of particular forward-looking statements may not be exhaustive and that new risk factors
emerge from time to time in our rapidly changing business environment.



ITEM
4.        INFORMATION ON THE COMPANY

A.           	History and development of the Company.





We
are a technology company focused on providing a service to oil and natural gas exploration clients using our proprietary SFD®
remote sensing airborne survey system. SFD® and NXT®are both registered trademarks of NXT Energy Solutions Inc.





NXT’s corporate history is summarized
as follows:

| | · | NXT was incorporated under the laws of
the State of Nevada on September 27, 1994 as Auric Mining Corporation.
| | - | -------------------------------------------------------------------------------------------------------------

| | · | In January 1996, NXT acquired all of
the common stock of NXT Energy USA, Inc. (which was then known as Pinnacle Oil Inc.) from its shareholders in exchange for common
shares. As a consequence of this reverse acquisition, NXT Energy USA Inc. became a wholly owned subsidiary and its shareholders
acquired a 92% controlling interest in NXT’s common shares.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Prior to this reverse acquisition transaction,
NXT was a corporate shell conducting no active business, and NXT Energy USA Inc. was a development stage research and development
enterprise holding the worldwide rights to use what is now our SFD® technology for hydrocarbon exploration purposes.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Shortly thereafter, on February 23, 1996
we changed our name to Pinnacle Oil International, Inc. and on June 13, 2000, subsequently changed our name to Energy Exploration
Technologies.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | On October 24, 2003, our shareholders
approved the continuance of the Company from the State of Nevada to the Province of Alberta, Canada under the Business Corporations
Act (Alberta) (the “ABCA”). Also, our name was modified to Energy Exploration Technologies Inc. (“EETI”).
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | On September 22, 2008 EETI changed its
name to NXT Energy Solutions Inc. by way of Articles of Amendment filed pursuant to the ABCA.
| | - | ------------------------------------------------------------------------------------------------------------------------------------

Our registered office is located at 3700,
400 – 3rd Street SW, Calgary, Alberta, Canada and our telephone number is (403) 264-7020.

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We are a reporting issuer in Alberta,
Ontario, and British Columbia and are principally governed by the Alberta Securities Commission in accordance with the Securities
Act (Alberta) and the Business Corporations Act (Alberta).We are a foreign private issuer under United States
securities laws and are subject to the regulation of the US Securities in accordance with the Securities Exchange Act
of 1934, as amended (the “Exchange Act”).



The underlying technology employed by our
SFD® survey system was invented by George Liszicasz, our President and CEO, chairman and largest shareholder. The technology
was initially licensed to the Company by Mr. Liszicasz until December 31, 2006 through a series of consecutive license agreements.
On December 31, 2006 we obtained the rights to the technology from Mr. Liszicasz pursuant to the terms of the TTA.



Upon execution of the TTA, Mr. Liszicasz
transferred to us all his rights and entitlements to the SFD® technology for use in the field of hydrocarbon exploration.

SFD® technology for the purposes
of the TTA is defined as the theories of quantum physics and engineering which are utilized in the operation of stress field detectors
used by NXT for the reception, collection and recording of subsurface geological stresses for hydrocarbon exploration.

Our business does not normally rely on significant
capital expenditures. For the last three fiscal years, the Company made capital expenditures for property and equipment of $8,727
(2017), $89,702 (2016), and $3,380,717 (2015). These annual expenditures normally relate largely to upgrades to office computer
equipment and SFD® survey equipment. In 2015, capital expenditures included the purchase of a survey aircraft (which had previously
been charter-hired as needed from the owner / operator of the aircraft), as well as leasehold improvement costs incurred in a move
to a new office location in Calgary.



The Company does not currently have any significant
capital expenditures in progress, or planned for the short term, for Canada or other international operations.



B.	           Business overview.

Description of the nature of the
Company’s operations and principal activities

We utilize our proprietary, airborne
SFD® survey system to provide a service for the oil and gas exploration industry. NXT provides a rapid and cost-effective method
for our clients to evaluate large land areas for their exploration potential.

The underlying technology employed
by our SFD® survey system was invented by George Liszicasz, our President and Chief Executive Officer (“CEO”),
Chairman and largest shareholder. The technology was initially licensed to the Company by Mr. Liszicasz until December 31, 2006
through a series of consecutive license agreements. On December 31, 2006 we obtained the rights to the technology from Mr. Liszicasz
pursuant to the terms of a Technology Transfer Agreement (“TTA”).

Upon execution of the TTA, Mr. Liszicasz
transferred to us all his rights and entitlements to the SFD® technology for use in the field of hydrocarbon exploration.

SFD® technology for the purposes
of the TTA is defined as the theories of quantum physics and engineering which are utilized in the operation of stress field detectors
used by NXT for the reception, collection and recording of subsurface geological stresses for hydrocarbon exploration.

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SFD® sensors remotely respond to
gravity perturbations and changes in subsurface stress regimes that are meaningful for oil and gas exploration. These responses
are captured as raw data that, when interpreted, can provide an indirect method to detect the presence of geological features such
as structures, faults, fractures and reefs that are often associated with traps and reservoir accumulations. SFD® is highly
effective in frontier and under-explored areas, in offshore or onshore environments, and over any terrain. The SFD® survey
system has been demonstrated to quickly focus exploration resources, offering the benefit of reducing the risk, time and expense
associated with frontier exploration.

Following completion of the aerial
surveys, we deliver to our clients a detailed report and maps of the surveyed area that identifies, ranks and recommends areas
with SFD® indications of reservoir potential.

In 2006, we commenced our current business
model and began providing SFD® survey services to clients on a fee-for-service basis. In accordance with this model, we have
not invested either directly or indirectly in exploration or development wells or engaged in other exploration or production activities.
Our current business model minimizes our capital requirements, thereby conserving cash, and minimizes any perceived or real conflicts
between the interests of NXT and its survey clients.

NXT’s primary business model
is to earn revenues by conducting SFD® surveys for clients on a fee-for-service basis. Secondly, we may be able to negotiate
to earn revenue from gross overriding royalty income and/or other incentive fees from clients should they generate production on
areas recommended by SFD® surveys. Finally, in the future, we may earn a fee by providing other related geological and geophysical
integration services to clients.

We also continue to utilize high quality
local sales representatives with key knowledge of their respective areas, potential clients and the exploration potential of a
region allowing us to cover larger areas and more clients with minimum fixed cost. Our sales representatives continue to pursue
SFD® opportunities in numerous regions including Latin America, the Middle-East and Southeast Asia (Sri Lanka, Indonesia, Malaysia
and Pakistan). Furthermore, to ensure our sales representatives follow industry best practices, each representative is required
to annually certify they adhere to NXT's code of conduct and business ethics.

In support of these sales efforts,
NXT has also been effective in positioning the SFD® method as an established geophysical tool for oil & gas exploration
following the successful completion of projects in Latin America (Bolivia and Mexico) with the publication of technical papers,
creation of project case studies and the development of a strong list of references and recommendation letters. In addition, NXT
has now been granted patents or received patent allowance in 48 separate countries.

Our overall objective remains to continue
to increase industry awareness and appreciation of the value of our SFD® survey system and our strategy to achieve this includes
maximizing client endorsement opportunities (such as through joint case studies) and targeting the most appropriate markets (i.e.
where SFD® provides the maximum benefits). Our specific tactics include:

| | 1. | Focus the majority of sales resources
on high profile primary markets which offer the maximum opportunity for success;
| | -- | ----------------------------------------------------------------------------------------------------------------------



| | 2. | Build upon success in this initial market,
and step out to other markets (such as Argentina, Peru, Brazil) in Latin America, and in South Asia (Indonesia, Malaysia, Sri Lanka);
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 3. | Pursue requests of interest from qualified
potential client "bluebirds" from all other locations in the world. The bluebird model is defined as an opportunity that
arises, not from deliberate targeted sales initiatives, but in response to unsolicited client enquiries;
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 4. | Continue to conduct pilot surveys to
expand our knowledge base and provide documentation to support the use of SFD® in the development of additional revenue streams.
Each new application opens more market opportunities and provides valuable case studies to support our sales initiatives; and
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 5. | Respond to opportunities to present at
technical conferences, publish papers in periodicals and generally maximize our opportunities to educate the industry on SFD®
capabilities and document case study successes.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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As we continue to progress and grow
our project pipeline on a Fee for Survey Project basis, we remain optimistic given our progress during the year coupled with the
steadily improving oil & gas environment. Notwithstanding, NXT has concurrently sought the development of an alternative business
line though the sale of “Multi-Client Datasets” focused on IOCs and the development of their global exploration strategies.
The purpose of this strategy has been to integrate our SFD® technology into the standard exploration process of such organizations.
We believe this approach will be instrumental in helping us to build an independent and steady backlog of smaller scale data sales
enabling us to enhance and smooth our revenue flow while we continue to execute on larger Fee for Survey Projects.





Description of the principal markets
in which the Company competes

We have an opportunity to provide
our services in any region of the world where oil and gas exploration activities are conducted. However, we choose to be
strategic and focus our limited marketing and sales resources in a limited number of markets in the early stages of
commercialization.

A summary of revenues derived in our
primary geographic market segments for the last 3 fiscal years, and highlights of global survey operations, follows:



|Year ended December 31    | 2017 | 2016        | 2015        
|------------------------- | ---- | ----------- | ------------
|South
and Central America | $ -  | $ 1,447,269 | $ 17,422,151
|North America             | -    | -           | -           
|                          | -    | 1,447,269   | 17,422,151  



North America Market

We began marketing the SFD® survey
system in 2006 largely in Canada and continued with this market focus until the end of 2008.

Latin America and Central America
Markets

In 2008, exploration activity seriously
diminished in Canada because of the world-wide credit crisis and falling natural gas commodity prices. In response, in late 2008
we looked to international markets for new revenue opportunities, especially where there were emerging, frontier-type exploration
markets. Latin and Central America became a target market for us, with Colombia viewed as an attractive initial proving ground
due to its many characteristics desirable for achieving market success for our SFD® survey system.

Colombia’s business-friendly
approach and practical resource policies allowed it to attract many exploration and production companies from around the world.
In Colombia, there are obstacles to acquire geological and geophysical data as required to properly evaluate unexplored land. Obstacles
include rain forests, environmental and community restrictions, security concerns and the high cost and time required to shoot
seismic programs, particularly onshore. SFD® can be a very effective tool to help overcome these obstacles. NXT earned survey
revenue in Colombia of US$2.9 million in 2012.

Building on our initial Colombia success,
NXT began to also pursue survey business in other South America countries as oil and gas exploration activity expanded in the region.

In 2014, we invested significant marketing
efforts in seeking to expand into the emerging Bolivia market. We were able to leverage our experience in Colombia and Mexico,
and in 2015, we successfully secured our largest single survey project to date. The contract with Yacimientos Petrolíferos
Fiscales Bolivianos (“YPFB”), the National Oil Company of Bolivia, was based on the local Bolivianos currency (which
has an ongoing fixed rate to the US$) and had an equivalent value of US$13 million (net of local sales taxes included in the contract
price).

Our SFD® data acquisition operations
commenced in Bolivia in early June 2015, and the data acquisition phase was completed in August, with NXT’s related recommendations
reports delivered to YPFB in late October 2015. During the data acquisition phase, YPFB chose to undertake an additional survey
“expansion” project valued at approximately US$1.0 million. The decision for YPFB’s expansion was based on the
rapid delivery of preliminary SFD® results, which had excellent correlations noted between anomalies identified by SFD®
and the clients’ existing ones identified using seismic methods. A
contract amendment was finalized in October 2015 for this project, the final results for which were delivered by NXT in January
2016.

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NXT also had ongoing discussions concerning
potential SFD® survey project opportunities with several of YPFB’s affiliated, subsidiary companies which hold exploration
acreage in Bolivia. Two entities expressed interest in obtaining SFD® data for certain of their exploration lands in Bolivia:
YPFB Chaco and YPFB Andina (which is a partnership with Repsol, a major Spanish oil company). A contract with YPFB Chaco to purchase
initial SFD® data (which was acquired in summer 2015) in the amount of US$0.2 million was completed and delivered by NXT in
Q4 2015.  NXT had also been informed by YPFB Andina in writing of a potential purchase of further SFD data expected
to potentially occur in 2017, however, the purchase has not been finalized and discussions continue.

NXT completed the data
acquisition and interpretation of 37,596 line km for the first ever SFD® Multi-Client survey in the Gulf of Mexico in
June 2017. The airborne survey was conducted over the area that was identified by Comision Nacional de Hidrocarburos
(“CNH”) for the shallow water Bid Round 2.1 covering the Tampicao-Misantla, Veracruz and Cuencas del Sureste
exploration areas. The survey data provides 100% grid coverage over the offshore blocks offered in Bid Round 2.1 an area of
approximately 8,900 square kilometers and was completed ahead of time and budget. In addition, NXT acquired incidental data
over many of the 35 blocks offered in the recently concluded Bid Round 3.1. Based on the Five-Year Tender Program for the
Exploration and Extraction of Hydrocarbons 2015 - 2019 by the Mexican Secretary of Energy, much of the remaining data will
also be applicable to future bid rounds. NXT is currently working with CNH to make it available to bid round participants.

The resulting exposure that has
resulted from the marketing effort of this multi-client survey has provided insight into other areas in the region where
there is potential interest for SFD® datasets. The Company is therefore considering performing further SFD®
multi-client surveys in addition to sole-source projects in the future.

South East Asia Markets

In 2016, NXT continued to expand its
search to international frontier exploration markets in South East Asia which have desirable attributes for the utilization of
SFD® such as large tracts of under explored offshore acreage.

As announced on September 19th,
2016 NXT has submitted a proposal to SHINE Quests FZC (“SQ”) for a project where the SFD® survey method is the
lead technology in the proposed “Project SHINE”, currently under consideration by the Sri Lankan government. NXT has
agreed the terms of contract with SQ for the provision of SFD® survey services and this agreement will be signed and work on
the SFD® survey will begin once SQ and the Sri Lankan government have finalized a separate contract for a larger scale infrastructure
and resource development within the Mannar Basin which will include a commitment to use SFD®. There are political and practical
considerations governing SQ’s contract with the Sri Lankan government and no assurance can be given that the contract will
be finalized in the near future, or at all. SQ is partially owned by Generation Resource Discoveries FZC (“GRD”) a
private company. SQ and GRD are both companies that are registered with the Sharjah Airport International Free Zone Authority in
Sharjah, United Arab Emirates (“UAE”). The head office for GRD is P.O. Box 317919, Doha Qatar. GRD is an appointed
representative of NXT to solicit prospective clients and SFD survey projects in exchange for a floating scale commission (which
is 12.0% based upon delivery and execution of a currently expected net SFD® contract value of approximately $19.9 million with
no retainer). No other consideration has been exchanged, or is intended to be exchanged between NXT and GRD. Mr. Sajid Sayeed,
Director of Business Development at NXT, is the brother of Mr. Mohammed Salman Sayeed, who is the Chairman of SQ. Mr. Salman Sayeed
is also the principal shareholder and Chief Executive Officer of GRD and an indirect shareholder of SQ (though his shareholdings
in GRD). Mr. Sajid Sayeed is also cousin of Mr. Syed Saahil Saif who is a Managing Director and also a shareholder of SQ.

Once finally approved by the agencies
of the Government of Sri Lanka the performance of the contract and the payment for the achievement of milestones by SQ to NXT shall
be governed by the following schedule:

| | • | 40% within 15 days from agreement of
Contractual Terms and prior to project commencement and mobilization of the aircraft;
| | - | --------------------------------------------------------------------------------------------------------------------------

| | • | 15% on completion of all flight surveys;
| | - | ----------------------------------------

| | • | 15% on delivery of Final SFD® results to the Customer (estimated 6 months from Contractual Terms exe-cution); and
| | - | -----------------------------------------------------------------------------------------------------------------

| | • | 30% on completion and submission of technical
reports.
| | - | ------------------------------------------------------



The SFD® survey data is intended
to provide information on trap integrity (the simultaneous presence of trap, reservoir and seal). The purpose of the project is
to build a new multi-client data set for Sri Lanka. This will involve the integration of the SFD® survey data with all existing
Geological & Geophysical data, (which includes regional seismic data), that is available for the Mannar
Basin.

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The revenue from
the “Project SHINE” to NXT is estimated to be approximately US$28.7 million, of which an estimated US$19.9
million relates directly to SFD® services. The SFD® survey work includes the data acquisition, data interpretation
and data integration with seismic data. All these services will be provided utilizing the SFD® technology and NXT
personnel. The remaining revenue estimated to be approximately US$8.8 million relates to the additional work that may be
undertaken, for example, a geological engineering study, the purchase and reprocessing of existing seismic data, seismic data
integration and correlations studies, all of which will be outsourced by NXT to other local and international companies
respectively.

The timing of the project is uncertain
as it is dependent on a number of factors including government approval and execution of final sales agreements. Dealing with
government organizations is a slow and patient process. During our engagement with this project, the Sri Lankan
Government made certain changes that slowed down the process. These changes to critical staff engaged with our
project have been the primary reason for the delays.



Description of seasonality of the Company’s
main business



There is no seasonality to our business. NXT
does however, have a very cyclical business, as revenue activity is dependent upon the size and timing of a limited number of survey
contracts each year.



Description of the sources and availability
of raw materials



We do not foresee any constraints upon
materials or equipment that will impede our ability to execute our business plan or affect our ability to conduct and/or expand
our business. Our main direct project input costs are aircraft operating costs and data interpretation staff. None of these expenses
have been subject to significant price volatility.

In order to conduct our survey operations,
we require the following:



- Survey aircraft – Historically,
we have both owned aircraft and chartered aircraft from independent charter aircraft companies. From 2009 to December 2015, we
utilized an aircraft charter agreement with Air Partners, a Calgary-based air-charter operator, to provide aircraft, crew and maintenance
services for our survey operations worldwide In December 2015, we acquired from Air Partners a jet aircraft which was previously
charter hired to NXT. 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 1997 Cessna Citation Ultra 560 jet
aircraft. We currently rely on Air Partners as the manager / operator of the aircraft which we use in SFD® survey
operations.

- SFD® sensors - All of the survey sensors
are manufactured in-house. Certain machining is required by third party machine shops, with final assembly performed by our technical
staff. The sensors, once assembled, require flight testing prior to being considered acceptable for operational use. Not all sensors
meet the performance criteria for operational use; however, we have demonstrated our ability to manufacture new functional SFD®
sensors.
- SFD® assembly - The units in which
the sensors are incorporated are custom designed, fabricated and assembled in-house or through subcontracted vendors. We utilize
the services of Transport Canada approved Design Approval Representatives to prepare subsequent type certificates (“STC”)
for the installation of our SFD® units in each aircraft that we utilize for surveys. The time to obtain an STC approval for
the installation of our SFD® units into any proposed aircraft type may require several months.
- Computer hardware and software - (Data
Acquisition System, SFD® Signal Conditioning Unit, and data Interpretation software). During 2016, a new data acquisition
system completed final testing. The software was developed by in-house personnel and will be utilized on future surveys. The hardware
we use in our SFD® survey systems (other than the SFD® unit), and the balance of the computer software we use, are all
readily available from retail or wholesale sources.

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We are not dependent upon any other third-party
contract manufacturers or suppliers to satisfy our technology requirements.



Description of marketing channels



We largely use direct sales methods with some
use of independent commissioned sales representatives in international markets.











Summary information on dependence on patents,
licenses and contracts



Patents

Initiatives to expand and protect
our IP (including patenting and new R&D initiatives) were very successful in 2017. Squire Patton Boggs LLP, a United States
(“US”) based leader in IP protection, has been advising NXT on our IP strategy, including the prior filing of an initial
US provisional patent application in May 2012. In November 2014, NXT filed a related patent amendment submission in the US and
since that time has undertaken new patent applications in select strategic international markets.

NXT’s patent applications have
been filed in nine (9) jurisdictions.  Thus far five (5) patents have been granted: U.S.A., Canada, Japan, Russia, and Mexico;
one (1) allowance was received in China (the examination has been completed, and the Letters Patent document will be issued shortly);
three (3) are pending: European Patent Office (38 countries), Brazil, and India. In total NXT has been granted patents or received
patent allowance for SFD® in 48 separate countries. SFD® patents granted in the U.S.A. and many other countries serve an
important purpose beyond protection of our proprietary SFD® technology. They also provide multiple independent third-party
recognitions of the technological invention in terms of the practical applicability, conceptual novelty, and knowledge advancement.



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Basis for
statements made regardingcompetitive position



Our SFD® airborne survey service
is based upon a proprietary technology, which is capable of remotely identifying, from a survey aircraft, subsurface anomalies
associated with potential hydrocarbon traps with a resolution that we believe is technically superior to other airborne survey
systems. To our knowledge there is no other company employing technology comparable to our SFD® survey system for oil and natural
gas exploration.

Seismic is the standard technology
used by the oil & gas industry to image subsurface structures. It is our view that the SFD® survey system is highly complementary
to seismic analysis. Our system may reduce the need for seismic in wide-area reconnaissance but will not replace the role of
seismic in verifying structure, closure and selecting drilling locations. The seismic industry is very competitive with many international
and regional service providers.

The SFD® system can be used as
a focusing tool for seismic. With an SFD® survey a large tract (i.e. over 5,000 square kilometers) of land can be evaluated
quickly to identify locations with indications of reservoir potential. Seismic surveys, although effective in identifying these
locations, are much more expensive, require significantly more time and impose a much greater negative impact on local communities
and the environment. An SFD® survey deployed first can provide necessary information to target a seismic program over a limited
area of locations selected by SFD®. This approach can result in a more effective seismic program and reduce the overall cost,
time, community resistance and environmental impact required to locate and qualify a prospect.

The industry uses other technologies for wide
area oil and natural gas reconnaissance exploration, such as aeromagnetic and gravity surveys. These systems can provide regional
geological information, such as basement depth, sedimentary thickness and major faulting and structural development; however, these
other airborne techniques are not as suitable for identifying areas with reservoir potential as the SFD® system.



Description of material effects
of governmental & environmental regulation

SFD®
Survey Flight Operations

The operation of our business, namely
conducting aerial SFD® surveys and interpreting SFD® data, is not subject to material governmental or environmental regulation
in Canada and the United States with the exception of flight rules issued by Transport Canada and the Federal Aviation Authority
governing the use of commercial aircraft, including rules relating to low altitude flights. The requirements in other countries
vary greatly and may require permits and/or provide other restrictions to conducting flight operations in the country that may
restrict our ability to perform SFD® surveys as freely as in Canada and the United States.

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For example, in Colombia, SFD®
surveys must comply with three requirements not encountered in Canada and the United States. These requirements are; customs obligations
and bonds related to the importation and exportation of the aircraft into Colombia, obtaining permits from the local aviation authority,
and obtaining permits from the Colombian Air Force. NXT has successfully operated in the past in Colombia in accordance with these
requirements.

With our past experience in Canada, the United
States, Bolivia, Mexico, Colombia and other countries, we do not anticipate any unusual government controls or regulations that
might significantly prevent timely completion of SFD® surveys. However, we may encounter unforeseen government regulations
or restrictions in other countries that may impair or restrict our ability to conduct surveys, which could limit our ability to
earn revenue or potentially expose us to forfeiture of performance bonds.



C.	Organizational structure.

The following table provides a list
of all subsidiaries and other companies controlled by NXT:

|Subsidiaries                                                                                                          | Date
        and Manner of Incorporation                          | Authorized
        Share Capital               | Issued
        and Outstanding Shares | Nature
        of the Business | %
        of each Class of Shares owned by NXT
|--------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------- | ---------------------------------------------- | ------------------------------------- | ------------------------------ | ----------------------------------------------
|NXT Energy USA, Inc.                                                                                                  | October 20, 1995 by Articles of Incorporation – State of Nevada   | 20,000,000 common                              | 5,000,000 common                      | Inactive                       | 100%                                          
|NXT Aero USA, Inc.                                                                                                    | August 28, 2000 by Articles of Incorporation – State of Nevada    | 1,000 common
        4,000 preferred           | 100 common                            | Inactive                       | 100%                                          
|Cascade Petroleum Inc. (Formerly Survey ServicesInternational Inc.)1                                                  | September 6, 2011by Articles ofIncorporation –Province of Alberta | Unlimitednumber of common shares               | 100 common                            | Inactive                       | 100%                                          
|NXT Energy Services (SFD) Inc.                                                                                        | December 2008by Federal Articles ofIncorporation –Canada          | Unlimitednumber of common shares               | 100 common                            | Inactive                       | 100%                                          
|PetroCazaExploration Inc.                                                                                             | May 2015 by Articles of Incorporation –Province of Alberta        | Unlimitednumber of common and preferred shares | 100 common                            | Inactive                       | 100%                                          
|1On January 16th,
        2017 the name of Survey Services International Inc. was changed to “Cascade Petroleum Inc.”



In February 2010, NXT registered a
wholly owned “Branch” entity with the tax administration and Chamber of Commerce authorities in Colombia, (NXT Energy
Solutions Inc. Sucursal Colombia). The formation of this branch became a Colombian legal requirement following the Company commencing
permanent activity in Colombia in 2010 while conducting commercial survey operations. This branch was closed in 2017.



In addition, in March 2015, NXT registered
NXT Energy Solutions Inc. (Sucursal Bolivia) as a wholly owned “Branch” entity under the laws of the Plurinational
State of Bolivia, to contract and conduct survey operations in Bolivia. Operations have now ceased in Bolivia and the Branch was
closed in November 2017.



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D.	Property, plant and equipment.

Oil and Gas Properties

We have minor historical interests
in a limited number of acreage holdings of undeveloped lands in western Canada. These assets are not a material asset and have
been written off in our financial statements. Additionally, we may in the future become entitled to receive gross over-riding royalty
(“GORR”) interests on production from portions of certain lands where we conducted past surveys for clients in Canada,
such as in the Horn River shale gas basin in British Columbia, Canada. There is no certainty that wells on these lands will become
placed on production, or that future royalty revenues will be earned from these entitlements prior to the expiry of the landowners’
related mineral leases. No asset value has been recorded in the financial statements for these GORRs.

Facilities

In August 2015, NXT moved to a new, larger
office premises at 3320 – 17th Avenue SW in Calgary under a 10-year lease at an initial estimated
minimum monthly lease payment of $44,624 (including building operating costs) commencing in October 2015. See also Item 5.F “Contractual
Obligations”.



Aircraft

In order to perform our survey
services, NXT requires to fly the survey area in a jet aircraft. In April, 2017, NXT completed a sale and leaseback agreement
of its aircraft with a Calgary based international aircraft services organization (the “Lessor”). The terms of
the agreement resulted in NXT selling its’ 1997 Cessna Citation Ultra 560 jet aircraft that was purchased in 2015. NXT
has leased the aircraft over an initial term of 60 months and retains all existing operating rights and obligations. NXT is
required to make monthly payments to the Lessor of approximately US$40,000. NXT has the option to extend the term of the
lease by an additional two years. Should NXT want to repurchase the aircraft at the end of the initial lease term, the
purchase price is US$1,450,000. When the aircraft is not needed for use by NXT, we seek to earn charter hire revenues from
the aircraft through a  third party, Air Partners.

Air Partners also has access to an
alternate, similar model aircraft (certified for the use of our survey equipment) which could be charter hired for use by NXT if
needed.

Equipment

Our SFD® technology is comprised of three
main components, detailed below, which we collectively refer to as our SFD® survey system. This system is generally stored
at our Calgary office facility unless deployed during survey operations when this equipment would travel with the aircraft or be
stored in a locked facility at the survey location when not in use. In addition, there is extensive interpretation equipment located
in Calgary. The main categories of equipment we use are:



|· | Stress Field Detector -the stress
        field detector, or SFD® system, including a unit which houses the SFD® sensors, is the principal component of our technology.
        SFD® sensors respond to changes in subsurface stress. These responses are transformed through a passive transducer into electronic
        digital signals. Airborne surveys are normally conducted utilizing an array of 22 SFD® sensors, consisting of 6 primary, 8
        secondary and 8 development sensors, allowing the acquisition of multiple independent SFD® signals responses at all points
        of a survey.
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|· | Data Acquisition System -used in conjunction
        with the SFD® sensor array on surveys, our data acquisition system is a compact, portable computer system which concurrently
        acquires the electronic digital signals from the SFD® sensor array and other pertinent client data, including the GPS location
        information of the data.                                                                                                                                                                                                                                                    
|· | SFD® Signal Conditioning Unit -this
        self-contained unit contains electronic circuits for stabilizing and conditioning electronic signals. All sensor output is directly
        connected to this unit and after signal conditioning is completed, all output is forwarded to the computer system.                                                                                                                                                                                                                                                                                                   

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|· | Interpretation Theatre -once returned
        to our home base, the SFD® data collected is processed and converted into a format that can be used by our interpretation staff
        using systems consisting of generally off-the-shelf computer equipment, high definition monitors, projectors and screens. This
        equipment is generally permanently set up at our Calgary office facility. A remote SFD® data interpretation theater is available
        and may be deployed during survey operations and would be set up in a facility at the survey client’s city.
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

We are not affected by any significant
environmental concerns, nor is there any planned significant capital additions contemplated.



ITEM
4A.     UNRESOLVED STAFF COMMENTS

None.

ITEM
5.       OPERATING AND FINANCIAL REVIEW AND PROSPECTS

The following discussion of our
financial condition and results of operations should be read in conjunction with the “Selected Financial Data” and
the accompanying Consolidated Financial Statements and the notes to those statements incorporated by reference elsewhere in this
Form 20-F/A. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual
results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute
to such differences include, but are not limited to, those discussed below and elsewhere in this annual report, particularly under
the caption “Risk Factors”.

A.	           Operating results.



Overall Operational Performance





|Selected Annual Information                          | For the year ended December 31
|---------------------------------------------------- | ------------------------------
|                                                     | 2017                          
|                                                     |                               
|Survey revenue                                       | $ -                           
|Net comprehensive income (loss)                      | (8,970,398)                   
|Net income (loss) per common share - basic           | (0.16)                        
|Net income (loss) per common share - diluted         | (0.16)                        
|Net cash generated by (used in) operating activities | (5,464,679)                   
|Cash and short term investments                      | 1,116,618                     
|Total assets                                         | 23,920,991                    
|Long term liabilities                                | 741,408                       







Summary financial highlights for the
last three fiscal years are as follows:

Financial Highlights for 2017



| | · | No survey revenues were recorded for
2017.
| | - | ------------------------------------------

| | · | NXT completed its first ever SFD®
Multi-Client survey in the Gulf of Mexico.
| | - | ----------------------------------------------------------------------------

| | o | Acquired 37,596 line km of SFD® data
in June 2017 for the shallow water Bid Round 2.1 covering the Tampicao-Misantla, Veracruz and Cuencas del Sureste exploration areas.
The SFD® survey data provides 100% grid coverage over the offshore blocks, an area of approximately 8,900 km2. In addition,
NXT acquired incidental data over many of the 35 blocks offered in the recently concluded Bid Round 3.1 and believe the remaining
data will also be applicable to future bid rounds.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Successfully tested the upgraded SFD®
Data Acquisition System during the Gulf of Mexico survey.
| | - | -----------------------------------------------------------------------------------------------

| | · | Significantly expanded protection of
IP through multiple patent grants globally.
| | - | --------------------------------------------------------------------------------

| | o | SFD® patents granted in
Russia (January 2017), Japan (July 2017), Mexico (July 2017), Canada (August 2017) and the United States (November 2017); and notices
of allowance received from China (February 2018).
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | A net loss of $8,970,398 for the year
including amortization expense of $1,897,576.
| | - | -----------------------------------------------------------------------------------

| | · | Operating activities used $5,464,679
of cash during the year and net cash utilization was $323,878.
| | - | ---------------------------------------------------------------------------------------------------

| | · | Losses per common share were $0.16(basic and diluted).
| | - | ------------------------------------------------------

| | · | Significant progress made in 2017 and
the first quarter of 2018 to reduce corporate costs and execute on financing options significantly strengthening the Company’s
liquidity and working capital position.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | o | $2.7 million sale and leaseback arrangement
on our airplane completed in April 2017.
| | - | ------------------------------------------------------------------------------------

| | o | Rights offering completed on November
3rd for gross proceeds of $2,093,645.
| | - | ---------------------------------------------------------------------------

| | o | On February 16, 2018 announced a three-tranche
Private Placement of 10,905,212 Units at a price of $0.924 per Unit for total gross proceeds of approximately $10,076,416.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Cash and short-term investments at the
end of 2017 were $1,116,618.
| | - | -------------------------------------------------------------------

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Financial Highlights for
2016

| | · | While conducting operations in Bolivia
during the summer of 2015, NXT acquired additional proprietary SFD® data flight lines requested by YPFB Andina and minor additional
SFD® data for YPFB Chaco. Additional YPFB Chaco data resulted in a total revenue amount of $1.45m CAD recognized in 2016. At
present, we are uncertain as to the timing of the YPFB Andina data sale and receipt of the associated funds.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Survey costs were $1,157,185, we experienced
a net loss of $9,099,562 for 2016, compared to net income of $10,540,228 in 2015.
| | - | ------------------------------------------------------------------------------------------------------------------------------

| | · | Cash flow from operating activities was
$(7,587,614) for 2016, compared to $6,984,922 for 2015.
| | - | -----------------------------------------------------------------------------------------------

| | · | Capital expenditures in 2016 resulted
in net cash use of $89,702 which is primarily associated with the purchase of computer hardware and software.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------

| | · | We had cash and short-term investments
of $1,943,587 at the end of 2016.
| | - | ------------------------------------------------------------------------

Financial Highlights for 2015

| | · | In the Q4-15 period, we completed US$17,422,151
million of survey projects for two new clients in Bolivia, primarily for YPFB, the National Oil Company of Bolivia. A separate
project expansion for YPFB, valued at US$1 million, was started in mid-2015 and delivered to the client in January 2016 (to be
recognized in revenue in Q1-16).
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Survey costs were $5,095,691, and with
completion of this large survey project, we generated overall net income of $10,540,228 for 2015, compared to net loss of $1,563,361
for 2014.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Cash flow from operating activities generated
net cash of $6,984,922 in 2015, compared to a $3,581,186 net use of cash in 2014.
| | - | -------------------------------------------------------------------------------------------------------------------------------

| | · | We undertook significant capital expenditures
in 2015, with the net cash use of $3,380,717 including $2,734,611 for the purchase of a survey aircraft in December 2015, and most
of the remainder for net costs of leasehold improvements at a new office premises.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | We had cash and short-term investments
of $9,141,281 at the end of 2015.
| | - | ------------------------------------------------------------------------



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Net Income
(Loss)





|                                  | 2017                             | 2016        | 2015        
|--------------------------------- | -------------------------------- | ----------- | ------------
|                                  |                                  |             |             
|Survey revenue                    | $                 -              | $1,447,269  | $ 17,422,151
|Expenses                          |                                  |             |             
|                                  | Survey costs                     | 1,289,429   | 1,157,185   
|                                  | General and administrative       | 4,960,961   | 5,645,459   
|                                  | Stock based compensation expense | 581,356     | 790,500     
|                                  | Amortization expense             | 1,897,576   | 2,104,864   
|                                  |                                  | 8,729,322   | 9,698,008   
|Other expense (income), net       | 165,531                          | 474,312     | (197,309)   
|                                  |                                  |             |             
|Income (loss) before income taxes | (8,894,853)                      | (8,725,051) | 5,688,136   
|Income tax expense (recovery)     |                                  |             |             
|                                  | Current                          | 75,545      | 374,511     
|                                  | Deferred                         |             | -           
|                                  |                                  | 75,545      | 374,511     
|Net income (loss) for the year    | (8,970,398)                      | (9,099,562) | 10,540,228  







|
|



Expenses for the years ended December
31 2017, 2016 and 2015

Survey costs –
these costs depend on the number of survey projects conducted and completed in each fiscal year. We apply the completed contract
basis of revenue recognition, with survey revenue and expenses recognized in the quarterly period in which our overall survey recommendations
report is delivered to our client. Survey costs may also periodically include expenses related to some R&D and equipment test
flights (as was the case in 2016 and 2014) as well as aircraft maintenance charges, which are not necessarily directly related
to projects undertaken.

For
most of 2017, the survey costs related entirely to the aircraft lease and maintenance costs, net of charter hire revenue. During
Q2 2017, NXT completed itsfirst ever SFD® Multi-Client surveyin the Gulf of Mexico. There have been no sales for the SFD® data that was recorded and therefore the direct costs of the survey
have been expensed. Survey costs only represent the direct costs that were incurred during operations of this survey and exclude
any indirect costs associated with the use of the technology.

Survey expenses in 2016 include the
net costs related to maintaining our survey aircraft, which was acquired in December 2015. The aircraft is available for charter
to third parties through our aircraft manager when it is not being used by NXT.

2015 survey costs related to the projects
which commenced in May 2015 and were completed in Q4-15 for two new clients in Bolivia. These survey costs include a minor level
of expenses incurred for a new local office which was opened in Bolivia in 2015 for administration and servicing of the projects.

General and administrative (“G&A”)
expense - G&A is a major component of NXT's total expenses. All salaries and overhead costs related to SFD® data
interpretation staff (other than out of country per diem allowances) are included in G&A, and not included with direct survey
expenses. The categories included in G&A expense are as follows:

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|For the year ended December 31                     |  | 2017        | 2016       | 2015      
|-------------------------------------------------- |  | ----------- | ---------- | ----------
|Salaries, benefits and consulting charges          |  | $ 2,709,194 | $3,192,304 | $2,563,445
|Board, professional fees, and public company costs |  | 873,864     | 908,086    | 881,299   
|Indirect financing costs                           |  | 35,865      | -          | -         
|Premises and administrative overhead               |  | 842,994     | 886,795    | 862,052   
|Business development                               |  | 257,465     | 589,300    | 369,087   
|Bolivia/Colombia overhead                          |  | 241,579     | 68,973     | 20,807    
|                                                   |  | 4,960,961   | 5,645,459  | 4,696,690 
|Bonus expense                                      |  |             | -          | 353,000   
|Total G&A                                          |  | 4,960,961   | 5,645,459  | 5,049,690 





Total G&A for 2017 was 5.0
million which was 0.7 million lower than 2015. G&A within the six individual expense categories noted above reflect several
factors:

| | · | 2017 salaries, benefits and consulting
charges are lower than 2016 levels due to lower staffing levels.
| | - | -------------------------------------------------------------------------------------------------------

| | · | For 2017 the full year costs were slightly
down due to 2 less board members and other cost controls.
| | - | ----------------------------------------------------------------------------------------------------

| | · | Indirect financing costs in 2017 were
higher due to work focused on obtaining new financing and negotiating the aircraft leaseback.
| | - | -----------------------------------------------------------------------------------------------------------------------------------

| | · | Premises and administrative overhead
where lower in 2017 versus the 2016 due to cost reduction and deferred spending efforts.
| | - | -----------------------------------------------------------------------------------------------------------------------------

| | · | Business development costs were lower
for the year as marketing costs were reduced.
| | - | -----------------------------------------------------------------------------------

| | · | Before 2017 Bolivian overhead costs were
classified as consolidated survey costs as the sole purpose of the office opening was to administer the YPFB survey. At the beginning
of Q1 2017, Bolivian overhead costs were presented as G&A to reflect the fact the office has been maintained to facilitate
periodic operating activities in Bolivia that are anticipated from time to time. In Q2 2017 a previously held “fiscal tax
credit” of $127,798 was expensed as the recoverability of this receivable was no longer considered certain. The credit related
to the Bolivian equivalent of input sales tax and is usually offset against output sales tax. It is not refundable if input tax
exceeds output tax.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Total G&A for 2016 was $5.6 million,
which was $0.6 million higher than the 2015 total, and the overall net changes in G&A within the five individual expense categories
noted above reflect several factors:

| | · | 2016 salaries, benefits and consulting
charges are higher than 2015 levels as NXT incurred termination fees of $280k in Q2-16.
| | - | ------------------------------------------------------------------------------------------------------------------------------

| | · | Business development expenses increased
in 2016 as a result of an extensive marketing campaign carried out by senior members of NXT.
| | - | ------------------------------------------------------------------------------------------------------------------------------------

| | · | Premises and administrative overhead
has decreased in 2016 YTD as the moving costs incurred in 2015 were not repeated. Spending on office supplies, printing, international
calls and computer equipment were reduced by more than half in comparison to 2015.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Board, professional and legal fees, were
higher in 2016 primarily due to investor relations activities and additional legal and regulatory charges arising from moving onto
the TSX from the TSX-V.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | 2016 noted an increase in Columbia office
costs resulting from an income tax expense of $39k, as well as consulting fees totaling $24k for the year.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------

| | · | No bonus pools were expensed during year.
| | - | -----------------------------------------



Total G&A for 2015 of $5.0 million
was $0.9 million higher than the 2014 total, and the overall net changes in G&A within the five individual expense categories
noted above reflect several factors:

| | · | Staff levels were higher in 2015, leading
to an increase salaries and related benefits.
| | - | ---------------------------------------------------------------------------------------

2820-F/A for the year ended December 31, 2017


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| | · | In the Q4-14 period, public company costs
were much lower than the normal rate for each quarter based on the timing of discretionary investor relations activities.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Board, professional fees, & public
company costs were higher in 2015 primarily due to a higher level of spending on investor relations activities, and in 2014, a
higher percentage of the total fees for NXT Board members were settled in the form of stock options granted, rather than paid in
cash.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Premises and overhead costs rose in Q4-15,
and for 2015 YTD, following the move to new, larger office premises in August, 2015. The increase included an overlap of office
rent on two locations for one month in Q3-15, and the effect of amortizing the initial “rent-free” period at the new
location to G&A expense over the 10 year term of the new lease (which resulted in a “deferred charge” being recorded
in long-term liabilities).
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Business development costs were slightly
lower for 2015 YTD, although they are somewhat discretionary each quarter, as they are a function of the timing of activity in
developing new client opportunities. Costs incurred in 2015 related to opportunities being pursued in the Latin America, Africa
and south Asia regions.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | A decrease in costs in 2015 for the Colombia
office following the lay off in summer 2014 of the office administrator.
| | - | ---------------------------------------------------------------------------------------------------------------------

| | · | A corporate bonus pool of $353,000 was
expensed in Q4-15 based on financial results of the Bolivia survey project.
| | - | ------------------------------------------------------------------------------------------------------------------





Stock-Based Compensation Expense
(“SBCE”) - this expense varies in any given quarter or year, as it is a function of several factors, such as
the number of stock options issued in the period, and the period of amortization (based on the term of the contract and / or number
of years for full vesting of the options, which is normally 3 years) of the resultant expense. Also, SBCE is a function of periodic
changes in the inputs used in the Black-Scholes option valuation model, such as volatility in NXT's trailing share price.

There was a lower average number of
options outstanding at the end of 2017 (total of 1,648,667 as compared to 3,321,001 at the end of 2016).

Total SBCE also includes additional
expense recognized related to the “Rights” which were personally issued by NXT’s CEO in January 2014 (see prior
discussion in “Item 4.B – Technology Transfer Agreement” related to the convertible preferred shares), and for
which the term to expiry was extended by one year to December 31, 2016 in 2015, as follows:



|                            | 2017                               | 2016            | 2015         
|--------------------------- | ---------------------------------- | --------------- | -------------
|SBCE recognized related to: |                                    |                 |              
|                            | Rights – grant in 2014             | $             - | $           -
|                            | Rights – extension of term in 2015 | -               | -            
|                            |                                    |                 | -            
|                            | Stock options                      | 581,356         | 790,500      
|                            |                                    | 581,356         | 790,500      





Amortization expense
– consists of the following amounts:

2920-F/A for the year ended December 31, 2017


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|                 | 2017                   | 2016      | 2015     
|---------------- | ---------------------- | --------- | ---------
|Amortization of: |                        |           |          
|                 | Property and equipment | $ 212,841 | $ 420,131
|                 | Intellectual property  | 1,684,735 | 1,684,733
|                 |                        | 1,897,576 | 2,104,864







Most of our capital investment in property
and equipment is in computer hardware, which is amortized on a 30% declining balance basis, such that amortization is high in the
initial year of capital investment. Prior to 2015, annual capital spending has been minimal, resulting in declining levels of amortization
expense.

Capital expenditure in 2017 was $8,727,
and this related mainly to a new data acquisition system and other IT upgrades. Although significant capital expenditures were
incurred in 2015 for the purchase of a survey aircraft (in December, 2015) and for leasehold improvements (completed in August
2015), amortization on such applied for only a portion of 2015, whereas in 2016 a full year of amortization was charged. The aircraft
was sold in April 2017 in the sales leaseback transaction and therefore amortization expense of equipment is lower for 2017.

Amortization expense for 2017 also
relates to intellectual property, which was acquired by NXT upon the August 31, 2015 conversion (the “Conversion”)
of the final 8 million NXT preferred shares.

The Conversion gave rise to the application
of “fair-value” accounting in Q3-15, whereby the 8 million common shares issued were assigned an estimated fair-value
of $18.5 million. An intellectual property (“IP”) asset related to the technology acquired was recognized at approximately
$25.3 million, which included a tax effect gross-up of $6.8 million (as the IP acquired has no corresponding deferred tax pool
deduction for ongoing Canadian current income tax purposes).

The IP assets December 31, 2017 net
book value of $21.3 million is amortized on a straight line basis over a 15-year period and will also be subject to ongoing tests
of potential impairment of the recorded net book value.



Other Expense (Income)

|                                                  | 2017    | 2016       | 2015      
|------------------------------------------------- | ------- | ---------- | ----------
|Interest expense (income), net                    | $ 4,485 | $ (17,254) | $ (13,910)
|Foreign exchange (gain) loss                      | 69,676  | 272,713    | (712,480) 
|Feasibility study and other expenses              | 91,370  | 218,853    | 529,081   
|Increase (decrease) in fair value of US$ Warrants | -       | -          | -         
|                                                  | 165,531 | 474,312    | (197,309) 





Interest income - Interest income,
generated by short term investments, is offset by interest expense incurred on such items as capital lease obligations for leasehold
improvements, and varies by year based on the level of cash available for investment. For 2017 interest includes interest income
on short-term investments & interest expense from capital lease obligations. Interest expense as at the end of 2017 was $4,485
as compared to interest income in 2016 and 2015.

Foreign exchange (gain) loss– gains and losses on foreign exchange are caused by changes in the relative exchange values of the US$ and Canadian
dollar. For example, when the Canadian dollar trades higher relative to the US$, cash held in US$ will decline in value and this
decline will be reflected as a foreign exchange loss in the period. We normally hold cash and short-term investments in Canadian
dollars to reduce the effect of market volatility; however, we occasionally are contractually obligated to hold certain restricted
cash funds in US$ instruments to support performance bond commitments issued for projects in certain foreign countries.

The value of net US$ monetary assets
can vary widely each period, based on such factors as the extent of US$ revenue contracts in process, and the level of US$ cash
and short-term investments on hand.

3020-F/A for the year ended December 31, 2017


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The valuation is also affected by the
relative strength of the US$ at each period end, resulting in both realized and unrealized net exchange movements on the net holdings
of US$ cash and other working capital items. The foreign exchange loss for the year was primarily caused by the translation of
assets and liabilities in the Canadian Company which were held in US$.

Feasibility study and other expenses– this total includes costs incurred for the following:



|                              | 2017          | 2016           | 2015     
|----------------------------- | ------------- | -------------- | ---------
|Feasibility study             | $           - | $            - | $ 400,104
|Intellectual property and R&D | 86,604        | 60,143         | 121,348  
|TSX Listing                   | -             | 147,099        | -        
|Other, net                    | 4,766         | 11,611         | 7,629    
|                              | 91,370        | 218,853        | 529,081  





For 2017 Intellectual property and
R&D costs consisted primarily of costs incurred to secure a patent for SFD® in the United States and to continue
to develop SFD® technology.

In March 2016, NXT graduated from the
TSX Venture Exchange to the main TSX Exchange. There were certain costs incurred associated with this move which totaled $147,099.

In the Q4-14 period, NXT commenced
a feasibility study undertaken with the aim of monetizing the value of specific portions of our proprietary SFD® data library,
and started to incur significant geotechnical and consulting costs related to this project, which continued through mid-2015.

Other expenses includes primarily discretionary
costs related to intellectual property / patent filings and R&D activity related to the SFD® technology. Also, minor net
expenses are incurred related to pre-2009 minority interests in oil & gas activities.

NXT has certain asset abandonment and
reclamation obligations (“ARO”) related to our historical minority working interests in various oil and gas wells in
which NXT had participation prior to 2005. At December 31, 2017, the ARO is estimated to be $56,702, based on obligations which
are estimated to be settled in the next three years. The net present value of the ARO is estimated based on inflation of 2.0% and
discounted using a credit-adjusted risk-free interest rate of 1.6%.

We currently have no other outstanding
derivative financial instruments, such as foreign currency hedges.

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 subsidiary companies in certain countries may be subject to foreign income tax with-holdings. Such taxes incurred
are only recoverable in certain limited circumstances, including potential utilization in Canada as a foreign tax credit against
future taxable earnings from the foreign jurisdictions.

In 2017, NXT expensed foreign withholding
tax of $75,545 (2016 - $159,990, 2015 – $1,755,678) which was incurred in connection with the Bolivia survey project.

A total net income tax recovery was
recognized in 2017 as follows:



|                                       | 2017                 | 2016      | 2015       
|-------------------------------------- | -------------------- | --------- | -----------
|Foreign with-holding taxes incurred    | $             75,545 | $ 159,990 | $ 1,755,678
|                                       | 75,545               | 159,990   | 1,755,678  
|Foreign corporate taxes incurred       | -                    | 446,925   | 215,230    
|Less portion accrued at Dec 2015       | -                    | (232,404) | -          
|Corporate income tax expense – foreign | 75,545               | 214,521   | 215,230    
|                                       | 75,545               | 374,511   | 1,970,908  
|Deferred tax recovery                  | -                    | -         | (6,823,000)
|Net tax expense (recovery)             | 75,545               | 374,511   | (4,852,092)





3120-F/A for the year ended December 31, 2017


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At the end of 2017, NXT has available
for future Canadian income tax deduction purposes significant unrecorded deferred income tax assets, the benefit of which has not
been recorded in the Company’s financial statements due to uncertainty regarding the amount and timing of their potential
future utilization. These deferred income tax assets include non-capital losses carried-forward (expiring in 2027 to 2038) and
other resource deductions totaling approximately $38.5 million.

Summary of Quarterly Results (Unaudited)

A summary of operating results for each of
the trailing 8 quarters (including a comparison to each respective prior quarter) follows. The extent of the profit or loss each
quarter is mainly due to the timing and the number of survey contracts that are underway, and variances in such non-cash items
as SBCE, which can occasionally be a significant expense in any given quarter.



|                                  | Q4-17                | Q3-17                | Q2-17                | Q1-17               
|--------------------------------- | -------------------- | -------------------- | -------------------- | --------------------
|                                  | Dec 31, 2017         | Sep 30, 2017         | Jun 30, 2017         | Mar 31, 2017        
|Survey revenue                    | $                  - | $                  - | $                  - | $                  -
|Net income (loss)                 | (2,096,360)          | (1,935,356)          | (2,723,956)          | (2,214,726)         
|Income (loss) per share - basic   | (0.04)               | (0.04)               | (0.05)               | (0.04)              
|Income (loss) per share - diluted | (0.04)               | (0.04)               | (0.05)               | (0.04)              





|                                  | Q4-16                | Q3-16                | Q2-16                | Q1-16       
|--------------------------------- | -------------------- | -------------------- | -------------------- | ------------
|                                  | Dec 31, 2016         | Sep 30, 2016         | Jun 30, 2016         | Mar 31, 2016
|Survey revenue                    | $                  - | $                  - | $                  - | $ 1,447,269 
|Net income (loss)                 | (2,356,848)          | (2,142,834)          | (2,643,938)          | (1,955,942) 
|Income (loss) per share - basic   | (0.04)               | (0.04)               | (0.05)               | (0.04)      
|Income (loss) per share - diluted | (0.04)               | (0.04)               | (0.05)               | (0.04)      



Q4-17 to Q3-17 comparison
– NXT had survey revenue of $nil ($nil in Q3-17), survey costs of $252,212 ($261,658 in Q3-17) related to aircraft maintenance
costs and SBCE of $84,351 ($162,724 in Q3-17).

Q3-17 to Q2-17 comparison
- NXT had survey revenue of $nil ($nil in Q2-17), survey costs of $261,658 ($612,342 in Q2-17) related to aircraft lease and maintenance
costs, and SBCE of $162,724 ($169,033 in Q2-17).

Q2-17 to Q1-17 comparison
– NXT had survey revenue of $nil ($nil in Q1-17), survey costs (related to the Gulf of Mexico Multi-Client survey, and aircraft
lease and maintenance costs) of $612,342 ($163,217 in Q1-17), and SBCE of $169,033 ($165,248 in Q1-17).

Q1-17 to Q4-16 comparison
– NXT had survey revenue of $nil ($nil in Q4-16), survey costs (related to equipment test flights and aircraft maintenance
costs) of $163,217 ($9,998 in Q4-16), and SBCE of $165,248 ($287,500 in Q4-16).

Q4-16 to Q3-16 comparison–
NXT had survey revenue of $nil ($nil in Q3-16), survey costs (related to overseas branch costs, equipment test flights and aircraft
maintenance costs) of $9,998, ($200,443 in Q3-16), and SBCE of $287,500 ($218,000 in Q3-16).

Q3-16 to Q2-16 comparison–
NXT had survey revenue of $nil ($nil in Q2-16), survey costs of $200,443 ($157,365 in Q2-16), SBCE of $218,000 ($135,000 in Q2-16),
and total amortization expense of $521,945 ($520,493 in Q2-16).

Q2-16 to Q1-16 comparison–
NXT had survey revenue of $nil ($1,447,269 in Q1-16), survey costs of $157,365 ($789,379 in Q1-16), SBCE of $135,000 ($150,000
in Q1-16), and total amortization expense of $520,493 ($514,258 in Q1-16).

3220-F/A for the year ended December 31, 2017


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Q1-16 to Q4-15 comparison–
NXT had survey revenue of $1,447,269 ($17,422,151 in Q4-15), survey costs of $789,379 ($5,070,023 in Q4-15), SBCE of $150,000 ($490,000
in Q4-15), and total amortization expense of $514,258 ($523,760 in Q4-15).





B.	           Liquidity and capital resources.



NXT's cash and cash equivalents plus
short-term investments at the end of 2017 was $ $1,116,618.

NXT's longer-term success remains dependent
upon our ability to continue to attract new client projects and expand the revenue base to a level sufficient to far exceed G&A
expenses, and generate excess net cash flow from operations. Equity financings have been used to supplement working capital as
required.

Risks related to having sufficient
ongoing working capital to execute survey project contracts are mitigated through our normal practice of obtaining progress payments
from prospective clients throughout the course of the projects, which often span 3 to 4 months. In addition, where possible, risk
of default on client billings is mitigated through the use of export insurance programs offered via Export Development Canada (“EDC”).

During 2017 NXT made significant progress
in strengthening its liquidity and working capital position through a series of corporate actions described below.

The Company began by securing of a
$2,700,000 sale and leaseback arrangement of its airplane.  Following this transaction, NXT took steps to reduce corporate
costs; the most significant included the deferral of a portion of the employees’ cash compensation, deferral of all of the
Board and Advisory Board members’ cash compensation and a reduction in non-essential staff. In addition, the Company completed
a Rights Offering to its existing shareholders on November 3rd, 2017 for aggregate gross proceeds of $2,093,645. Finally
on February 16, 2018 the Company entered into an agreement to complete a three-tranche PrivatePlacement under which the
Subscriber has committed to purchase 10,905,212 Units at a price of $0.924 per Unit for total gross proceeds of approximately $10,076,416.

Sale Lease Back: In order to
enhance the short-term cash flow of the business, NXT completed a sale and leaseback agreement with a Calgary based international
aircraft services organization on April 28th, 2017. The terms of the agreement involve 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 back for
a minimum period of 60 months and retains all existing operating rights and obligations. Net proceeds to NXT from the sale were
approximately CAD $2,700,000, after payment of all commissions and fees. The net book value of the asset of $2,400,000 was derecognized
and the resulting gain on disposition of $776,504 was deferred ($621,203 included in long term liabilities and $155,301 included
in accounts payable and accrued liabilities). The gain will be recognized as a reduction to the Company’s lease expense over
the 60 month term of the lease. The resulting leaseback transaction is an operating lease. NXT is required to make monthly payments
to the lessor of approximately US$40,000. NXT has the option to extend the term of the lease by an additional two years. Should
NXT want to repurchase the aircraft at the end of the initial lease term, the purchase price is US$1,450,000.

Reduction in Corporate Costs:Following
the completion of the sale and leaseback, NXT took steps to reduce corporate costs; the most significant included the deferral
of a portion of the employees’ cash compensation, deferral of all of the Board and Advisory Board members’ cash compensation
and a reduction in non-essential staff.

Rights Offering: On September
26th, 2017 the Company announced a Rights Offering to its existing shareholders.

The Rights Offering closed on
November 3rd 2017 with the following results:



|                       | Non Insiders | Insiders | Total       | Percentage
|---------------------- | ------------ | -------- | ----------- | ----------
|Basic Subscription     | 1,556,751    | 680,856  | 2,237,607   | 53%       
|Over Subscription      | 1,949,683    | -        | 1,949,683   | 47%       
|Total Shares Purchased | 3,506,434    | 680,856  | 4,187,290   | 100%      
|Total Proceeds         |              |          | $ 2,093,645 |           





3320-F/A for the year ended December 31, 2017


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Private Placement: On February
16, 2018 the Company entered into an agreement to complete a three-tranche PrivatePlacement under which the Subscriber
has committed to purchase 10,905,212 Units at a price of $0.924 per Unit for total gross proceeds of approximately $10,076,416.
Each Unit consists of one CommonShare and one-third of one Warrant. Each Warrant entitles the holder to acquire one Warrant
Share at an exercise price of $1.20 for twelve (12) months from closing of the first tranche of the Private Placement.

Closing of First Tranche of Private
Placement

The first tranche of the Private Placement
was completed on February 16, 2018 and the Company received $4,310,500 in connection with the issuance of 4,665,043 Units. The
Subscriber now holds approximately 9.9% of the Company’s outstanding Common Shares (including the Common Shares to be issued
upon exercise of the Warrants).

Additional Tranches of Private Placement

Closing of the second tranche of 5,538,203
Units for gross proceeds of approximately $5,117,300, is expected to occur prior to the Company’s annual and special meeting
of common shareholders scheduled to be held on Wednesday, May 16. 2018. The Company received the necessary TSX clearance of Personal
Information Forms submitted by certain principals of the Subscriber in late March 2018 and has commenced the process of closing
this tranche. No shareholder approval is required to close the second tranche of the financing. Following the completion of the
second tranche of the Private Placement, closing of the third tranche of the Private Placement, consisting of issuance of 701,965
Units for gross proceeds of approximately $648,616, will cause the Subscriber to be deemed a “Control Person” of the
Company under applicable securities laws and is subject to approval by the shareholders of the Company (other than the Subscriber
and its associates or affiliates) on or before May 17, 2018.

Other Material Agreements

In conjunction with closing the second
tranche, the Company and the Subscriber have agreed to enter into an Investor Rights Agreement pursuant to which: (a) the Subscriber
will have the right to nominate one director for election to the board of directors of the Company (subject to maintaining any
equity ownership of at least 10% in the Company); (b) the Subscriber will be entitled to participate in future equity or convertible
security offerings of the Company in order to maintain its pro rata equity interest in the Company (subject to maintaining any
equity ownership of at least 10% in the Company); (c) the Subscriber will be entitled to a similar equity offering participation
right in connection with certain new entities that may be created by the Company to expand the application of its proprietary technologies;
and (d) the Subscriber has agreed to a 18 month standstill from the closing date of the second tranche of the Private Placement
and a 12 month restriction on dispositions of 75% of the securities acquired in the Private Placement.

Following the proceeds received as a result
of the Rights Offering and the Private Placement, NXT has estimated that it will have sufficient funds to meet its ongoing obligations
for a period of approximately 24 months.



We do not presently have any legal or economic
restrictions that would affect the ability of any subsidiaries to transfer funds to us. As of the last fiscal year end, and the
present date, we do not have any material outstanding commitments for capital expenditures that require funding.



NXT's longer term success remains dependent
upon our ability to continue to attract new client projects and expand the revenue base to a level sufficient to far exceed G&A
expenses, and generate excess net cash flow from operations. Equity financings have been used on a limited basis in recent years
to supplement working capital as required.

Risks related to having sufficient
ongoing working capital to execute survey project contracts are mitigated through our normal practice of obtaining progress payments
from clients throughout the course of the projects, which often span 3 to 4 months. In addition, where
possible, risk of default on client billings is mitigated through the use of export insurance programs offered via Export Development
Canada (“EDC”).

3420-F/A for the year ended December 31, 2017


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EDC can also be utilized by NXT for
financial support in the form of guarantees of specific bank letters of credit required to be issued by NXT as performance guarantees
on international projects, such as was utilized on our project for YPFB in Bolivia. This aids in reducing restrictions on working
capital that is needed to initiate and undertake projects.

NXT has minimal secured debt and had
total “net working capital deficit” of $0.3 million as at December 2017 as follows:



|                                      | December 31,                                | December 31, | net change 
|------------------------------------- | ------------------------------------------- | ------------ | -----------
|                                      | 2017                                        | 2016         | in 2017    
|Current assets (current liabilities): |                                             |              |            
|                                      | Cash and cash equivalents                   | $ 166,618    | $ 490,496  
|                                      | Short-term investments                      | 950,000      | 1,453,091  
|                                      |                                             | 1,116,618    | 1,943,587  
|                                      | Accounts receivable                         | 60,027       | 205,952    
|                                      | Prepaid expenses and deposits               | 107,363      | 166,802    
|                                      | Accounts payable and accrued liabilities    | (1,562,394)  | (575,964)  
|                                      | Income taxes payable                        | (201)        | (98)       
|                                      | Current portion of capital lease obligation | (39,579)     | (36,769)   
|Net working capital                   | (318,166)                                   | 1,703,510    | (2,021,676)





The $2.0 million year to date decrease
in net working capital is primarily due to the net outflow of cash due to no revenues offset by cash provided by the aircraft sales
leaseback transaction, the Rights Offering an increase in payables due to deferral of cash payments.

NXT applies the "completed contract"
method of revenue recognition - revenues and related project costs are deferred until the period in which the survey contract is
completed. At each period end, if applicable, deferred revenue (a current liability) represents progress billing amounts that are
to be recognized in revenue in future periods. Similarly, WIP relates to deferred survey costs which will be expensed in future
periods upon completion of the related contracts. As these amounts will not result in additional future cash inflows or outflows
to the Company, they are excluded (in periods in which applicable) from NXT’s above noted table / analysis of net working
capital.

This discussion includes references
to terms such as “net working capital” and “net working capital before the undernoted items”, which do
not have a standardized meaning prescribed by U.S. GAAP and may not be comparable to similar measures presented by other entities. 
NXT management uses this non-GAAP measure to improve our ability to assess liquidity at a point in time.  Net working
capital is defined as total current assets less total current liabilities, excluding amounts accumulated in work in progress and
deferred revenue.  Management excludes these amounts from the calculation as they do not represent future cash inflows or
outflows to the Company.



3520-F/A for the year ended December 31, 2017


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Sources and uses of cash

The following table, and the narrative below,
summarizes NXT’s net cash flows, and the total cash plus short-term investments held at the end of the periods, for the last
three fiscal years:





|For the year ended December 31             | 2017                 | 2016          | 2015         
|------------------------------------------ | -------------------- | ------------- | -------------
|Cash provided by (used in):                |                      |               |              
|                                           | Operating activities | $ (5,464,679) | $ (7,587,614)
|                                           | Financing activities | 2,022,943     | 464,811      
|                                           | Investing activities | 3,117,858     | 527,496      
|Net cash inflow (outflow)                  | (323,878)            | (6,595,307)   | 7,035,168    
|Cash & cash equivalents, start of the year | 490,496              | 7,085,803     | 50,635       
|Cash & cash equivalents, end of the year   | 166,618              | 490,496       | 7,085,803    
|                                           |                      |               |              
|Cash & cash equivalents                    | 166,618              | 490,496       | 7,085,803    
|Short-term investments                     | 950,000              | 1,453,091     | 2,055,478    
|Total                                      | 1,116,618            | 1,943,587     | 9,141,281    



Operating Activities

Net cash flow from operating activities
listed above is a function of net income (loss) for the year, an add back of the net non-cash revenue and expense items (such as
SBCE, amortization expense, deferred tax expense / (recovery), and the net change in year-end working capital items (for example,
a net decrease in working capital in the year gives rise to a source of cash), with these components each year as follows:



|For the year ended December 31                 | 2017          | 2016          | 2015        
|---------------------------------------------- | ------------- | ------------- | ------------
|Comprehensive income (loss) for the year       | $ (8,970,398) | $ (9,099,562) | $ 10,540,228
|Add back net non-cash expense and income items | 2,676,705     | 2,896,447     | (4,948,061) 
|                                               | (6,293,693)   | (6,196,585)   | 5,592,167   
|Change in non-cash working capital balances    | 829,014       | (1,384,499)   | 1,392,755   
|Total cash provided by (used in) in operations | (5,464,679)   | (7,587,614)   | 6,984,922   





For all periods, changes in operating
cash flow was driven by the lack of revenue and incurred operating costs for the period.

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Financing Activities

2017- NXT recorded a cash
inflow of $2,019,865 in 2017 related mostly from the Rights Offering.

2016 - The only financing
activity was related to proceeds from exercise of NXT stock options. Q4-16 reflects a $34,159 cash use for repayments of the capital
lease obligation and $498,970 proceeds from the exercise of NXT stock options.

2015 – The overall net
cash from financing activities of $327,824 reflects:

| | · | $335,946 of proceeds from exercise of
a total of 347,266 NXT stock options. $8,122 used for repayment of the new capital lease obligation which was entered into in 2015.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Investing Activities

2017 - The overall net cash
source in investing activities of $3,117,858 for 2017 reflects these components:

| | · | On April 28th, 2017 NXT completed
a sale and leaseback transaction on its’ Cessna Citation aircraft for $3,142,260 (US$2,300,000). The aircraft was originally
purchased for $2,734,610 (US$2,000,000) in December2015 and at the date of sale accumulated amortization of $368,854. The sale
resulted in a gain of $776,504, which was deferred and will be amortized over the term of the lease (5 years).
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | A use of $518,765 for deposits on the
aircraft and building leases.
| | - | -------------------------------------------------------------------

| | · | A source of $503,091 from a net decrease
in cash invested in short-term investments.
| | - | ------------------------------------------------------------------------------------



2016– The overall
net cash source in investing activities of $527,496 for 2016 reflects these components:

| | · | A use of $89,702 for net capital additions,
which relate primarily to $45,725 for computer equipment, $16,178 for SFD Equipment – non computer, $15,141 for computer
software, $8,102 for SFD computer hardware and, $4,555 for leaseholds.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | A source of $602,387 from a net decrease
in cash invested in short-term investments.
| | - | ------------------------------------------------------------------------------------

| | · | A source of $75,000 related to a decrease
in restricted cash balance.
| | - | ---------------------------------------------------------------------

| | · | A use of $60,187 arising from a decrease
in non – cash working capital balances related to investing activities.
| | - | ----------------------------------------------------------------------------------------------------------------



2015 – The overall net
cash used in investing activities of $277,578 for 2015 reflects these components:

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| | · | A use of $3,380,717 for net capital additions,
which relate primarily to $2.7 million for a survey aircraft acquired in December 2015 and $0.6 million net cash paid for leasehold
improvement costs incurred ($0.8 million costs net of a tenant leasehold improvement allowance received, and less $0.2 million
of capital lease financing) for construction of the new office facility, which NXT moved to in August, 2015.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | A source of $3,117,952 from a net decrease
in cash invested in short-term investments.
| | - | --------------------------------------------------------------------------------------

| | · | A use of $75,000 related to an increase
in restricted cash balances (issued for bank security purposes).
| | - | --------------------------------------------------------------------------------------------------------

| | · | A source of $60,187 arising from an increase
in non-cash working capital balances related to investing activities.
| | - | ------------------------------------------------------------------------------------------------------------------



C.           	Research and development,
patents and licenses, etc.

There was no separate R&D expense
reported in the financial statements in the years 2017, 2016 and 2015. In these three years, expenditures related to R&D were
included within general and administrative expense (related to a portion of staff salaries and overhead) and in other expense (for
patent filings and related costs).

D.	           Trend information.

We have historically conducted a limited
number of service contracts each year, the dollar value and timing of securing and ultimate delivery of which are subject to numerous
external factors. As at April 30, 2018 we do not have a significant committed “backlog” or order book of contracts
to be performed.

We are not aware of any current external
trends (such as in commodity prices, etc.) which could affect our operations for the next fiscal year. As noted previously, the
amount and timing of our annual revenues can vary widely year to year, as we derive our revenues from a limited number of service
contracts each year, and each individual contract may have a large effect on the aggregate annual revenues and profits. For example,
in 2012, we conducted our first contract with PEMEX, the National Oil Company of Mexico. This project was completed in 2012 and
was our largest to that time, at US$5.8 million. In 2015, projects totaling US$13 million were completed in Bolivia for YPFB.

We continue to seek future business
projects with large exploration clients such as PEMEX and YPFB, with the aim of having each new client become an ongoing repeat
customer.

E.            	Off-balance sheet arrangements.

We do not have any off-balance sheet
arrangements.

F.	            Tabular disclosure of contractual
obligations.

The following table sets forth our
outstanding contractual obligations as at December 31, 2017:



|                                    |                                 | less than    | 2 to 3        | 4 to 5             | more than          
|----------------------------------- | ------------------------------- | ------------ | ------------- | ------------------ | -------------------
|                                    | Total                           | 1 year       | years         | years              | 5 years            
|Long-term debt                      | $            -                  | $          - | $           - | $                - | $                 -
|Capital (finance) lease obligations | 124,697                         | 39,579       | 85,118        | -                  | -                  
|Operating lease obligations:        |                                 |              |               |                    |                    
|                                    | Premises rent / operating lease | 4,334,019    | 551,553       | 1,106,079          | 1,126,900          
|                                    | Aircraft Lease                  | 2,527,190    | 594,633       | 1,189,266          | 743,291            
|Purchase obligations                | -                               | -            | -             | -                  | -                  
|Other long term liabilities:        |                                 |              |               |                    |                    
|                                    | Asset retirement obligation     | 56,702       | -             | 56,702             | -                  







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ITEM
6.       DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

A.	           Directors and senior management.



Our articles of incorporation provide
for a minimum of one director and a maximum of 15 directors comprising our Board of directors. At present, our Board of directors
consists of five members.

Our directors are elected by our shareholders
at our annual meeting of shareholders and hold the position either until the next annual shareholders’ meeting, the date
of their resignation or until a successor is appointed.

The following sets forth information,
including directorships in other reporting issuers, as of April 30, 2018, for our directors, executive officers and key employees:

|                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|George
                                         Liszicasz
        Age
        64
        Director,
        Chairman and Chief
        Executive
        Officer since January
        1996;
        President since July 2002 | Mr. Liszicasz is the inventor of the SFD®
        Technology and has been Chairman and Chief Executive Officer since the Corporation's inception in 1996. Mr. Liszicasz’ primary
        responsibilities, as the President and CEO, are to oversee all operations and to further develop the SFD® technology.
        
        He holds an Electronics Engineer degree from
        the Landler Jeno Technitken in Hungary in 1973 and studied general sciences at the University of British Columbia between 1979
        and 1983. Mr. Liszicasz has extensive R&D body of work with various technologies, and 52 inventions.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Charles
                                         Selby
        Age 61
        Director since
        January 2006                                                                                                             | Mr. Selby holds a B.Sc. (Hons) in Chemical
        Engineering, a J.D. degree and is a registered Professional Engineer in the Province of Alberta. He previously practiced law for
        two large Canadian law firms specializing in securities and corporate finance matters and remains a member of good standing with
        the Bar. He has served on the board and in management of a number of reporting issuers including Arakis Energy, which had operations
        in the Sudan, and other issuers in the oil and natural gas industry.
        He is currently the Chairman and CEO
        of Montana Exploration Corp. (formerly AltaCanada Energy Corp.), an oil and gas company listed on the TSX-V, and is the president
        of Caledonian Royalty Corporation, Caledonian Global Corporation and Caledonian Midstream Corporation, private entities which are
        involved in oil & gas production and the midstream business.
        Mr. Selby is the Lead Independent Director
        of NXT.  He is also Chair of NXT’s Compensation Committee and a member of the Audit, Disclosure, and Strategic Planning
        Committees.
        
        Mr. Selby also served as the Company’s
        interim CFO from December, 2017 to January, 2018.

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|John
                                         Tilson
        Age 74
        Director since
        February 2015                                                               | Mr. Tilson is retired, and after obtaining
        MBA and CFA designations, had a distinguished career as an analyst, portfolio manager, and advisor in the US investment and
        financial industry with such firms as Sutro & Company and EF Hutton & Company. Mr. Tilson joined Roger Engemann and
        Associates in 1983 when assets under management were roughly US$160 million. During his tenure there, the Pasadena Group of
        Mutual Funds was started, with Pasadena Capital Corporation formed as the holding company for the mutual funds and investment management
        business. After working as an analyst and portfolio manager, John later became Executive Vice President & Managing Director
        of Pasadena Capital Corporation. Assets under management had grown to over US$5 billion by the time the firm was sold to Phoenix
        Companies in 1997. Mr. Tilson later retired in 2005.
        From 2006 to 2012 Mr. Tilson was a
        member of the Board of Trustees, including three years serving as VP and Chairman of the long-range planning committee, for Lotusland,
        a Santa Barbara non-profit organization established by Madame Ganna Walska.
        Mr. Tilson is the Chair of the Board’s
        Strategic Planning Committee, and a member of the Compensation, Governance and Audit Committees.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Thomas
                                         E. Valentine
        Age 56
        Director since
        November 2007
        Corporate Secretary since 
        April 2014 | Mr. Valentine is a Partner with Norton
        Rose Fulbright Canada LLP, where he has practiced law, both as a Barrister and a Solicitor, since his call to the Bar in 1987.
        Mr. Valentine is a Partner with Norton Rose Fulbright Canada LLP, where he has practiced law, both as a Barrister and a Solicitor,
        since his call to the Bar in 1987. He is a member of the firm’s Energy and Infrastructure Practice Group and is involved
        in energy and energy related matters throughout the Middle East, North Africa, the CIS, Asia and South America.
        Mr. Valentine is a member of the Board of
        Directors of Touchstone Exploration Inc., and formerly was a director of two other Canadian public companies, Calvalley Petroleum
        Inc. (to May 2015) and Veraz Petroleum Ltd.
        
        Mr. Valentine holds a BA from the University
        of British Columbia, a LLB from Dalhousie University, and a LL.M. from the London School of Economics.
        
        Mr. Valentine is the Chair of the Governance
        Committee and a member of the Compensation Committee.                                                                                                                                                                                                                                     

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|Bruce
    G. WilcoxAge 63Director sinceJune 2015                                                                                        | Mr. Wilcox
        has had a long career as an investment company CEO, analyst and portfolio manager. He spent most of his career with Cumberland
        Associates, LLC, a New York equity fund, from 1986 through retirement in 2010, progressing from analyst / portfolio manager to
        partner, and Chairman of the Management Committee. Mr. Wilcox specialized in Cumberland’s investments in the energy industry
        (E&P and service companies), with an emphasis on value and long-term holdings. During his tenure, the fund’s assets under
        management ranged from US$0.7 to $1.5 billion.
        From 1984
        to 1986, Mr. Wilcox was with Central National-Gottesman, Inc. as an analyst and portfolio manager on a team responsible for a $500
        million listed equity portfolio.
        Mr. Wilcox
        is presently CEO of E Street Management, LLC which manages a long/short equity fund of funds. He is also one of the managing members
        of Xiling Fund III, LLC, part of a series of private equity funds (US$100+ million) which specialize in investing in museum quality
        Chinese art and collectibles.
        Mr. Wilcox
        obtained a BA (Honors), in Modern Chinese from the University of California, Santa Barbara, and a Master of International Management
        from the American Graduate School of International Management in Phoenix.
        Mr. Wilcox
        is a member of several Boards, including the Teachers College of Colombia University (2003 to date, including acting as the Chair
        of the Investment Committee), the University of California Santa Barbara Foundation (2003 to date, including as former Chair of
        the Board, Investment and Finance Committees), and is a Trustee (2001 to date) of the Manhattan Institute For Policy Research,
        a leading urban, state, and national policy institution, which works on matters such as energy policy.
        Mr. Wilcox is the
        chair of the Board’s Audit Committee and a member of the Disclosure, Governance and Strategic Planning Committees.
|--------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Jakub
                                         Brogowski
        Age
        38
        V-P Finance and CFO
        since February 2018 | Mr. Brogowski has over 16 years of prior experience
        in oil & gas investment banking experience spanning capital markets in North America, Europe, Middle East, Africa and Asia.
        Beginning his career with TD Securities in Calgary, he was instrumental in expanding their oil & gas advisory operations to
        London, UK in 2010. In 2011, Mr. Brogowski joined RBC Capital Markets in London as a senior member of the European Energy team
        and has extensive experience in financings, mergers, acquisitions and structuring transactions in Canada and internationally. He
        also holds a Bachelor of Commerce (Honors) degree from the University of Calgary.
        
        Mr. Brogowski
        is a member of the Disclosure Committee.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           



None of our executive officers or directors
have been involved in any bankruptcy proceedings within the last five years, been convicted of or have pending any criminal proceeding,
been subject to any order, judgment or decree enjoining, barring, suspending or otherwise limiting involvement in any type of business,
securities or banking activity or been found to have violated any federal, state or provincial securities or commodities laws.

Charles Selby was previously a member
of the board of directors of Wellpoint Systems Inc. (“Wellpoint”, a reporting issuer on the TSX-V), which in 2011 had
a Receiver appointed by the Court of Queen’s Bench of the Province of Alberta on behalf of the holders of secured debts.
Wellpoint was subsequently wound up following a restructuring and sale of its operating assets. Charles Selby was previously a
member of the board of directors of Idaho Natural Resources Corp., which was cease-traded by the TSX Venture Exchange in December
2012 for failing to meet listing requirements.

Messrs. Selby, Tilson, Valentine, and
Wilcox are considered "independent" within the meaning of Canadian National Instrument 58-101.



B.	           Compensation

Executive
Compensation

The following
table sets out certain information regarding the annual and long-term compensation of the Chief Executive Officer, the Chief
Financial Officer at December 31, 2017, as well as any additional individuals for whom disclosure would have been provided pursuant
to the above criteria except that the individual was not serving as an officer of the Company at the end of 2017. All officers
of the Company are based in the Calgary, Canada head office and are paid in Canadian dollars.



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Summary compensation table for the year ended
December 31, 2017:





|Name & Principal Position                   | Salary    | Termination(1) | Vacation(2) | Other(3) | Total    
|------------------------------------------- | --------- | -------------- | ----------- | -------- | ---------
|                                            |           |                |             |          |          
|George Liszicasz, President & CEO (4)       | $ 274,800 | $-             | $ -         | $ 11,294 | $ 286,094
|Charles Selby, Interim CFO (5)              | 22,671    | -              | -           | -        | 22,671   
|Beverly Stewart, Chief Financial Officer(5) | 164,083   | -              | 4,131       | 1,902    | 170,116  





|(1) None in 2017.
        (2) “vacation” represents
        a cash payout in the year of a portion of unused vacation entitlements carried forward.
        (3) “other” consists
        of any vehicle allowance paid ($9,000 for Mr. Liszicasz) plus the taxable portion of company paid amounts for group health benefits
        and parking.
        (4) salary and other totals exclude
        the cash portion of fees earned as Board Members, $35,000 for Mr. Liszicasz and $30,000 for Mr. Selby which was earned in 2017,
        but not paid.
        (5) Ms. Stewart resigned as CFO
        on November 30, 2017. Mr. Selby was the interim CFO from December 1, 2017 until January 31, 2018.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



(See Item 6.E “Share Ownership”
for details regarding stock options granted to officers).



No amount is set aside or accrued by the Company
or its subsidiaries to provide pension, retirement or similar benefits to officers or directors.



Director Compensation

NXT compensates directors for serving
on our Board by paying a combination of an annual cash retainer as well granting stock options to purchase NXT common shares. New
members who join the Board receive a separate grant of stock options (with entitlement to exercise vesting over a 3 year period)
in the year of joining the Board.

In 2017, $170,000 of board fees remained outstanding
at December 31, 2017. In 2016, the directors group each individually elected to receive a mix of cash and / or stock option grants
as payment of Board fees earned for the year. The annual cash retainer was based on $30,000 ($35,000 in the case of each of the
Chairman of the Board and the Audit Committee. The lead Director receives an additional $30,000 per year.) Compensation payable (including pro-rated amounts for periods of partial service
in the year) for 2017 and 2016 is summarized as follows:



|                                                                    | 2017      | 2016     
|------------------------------------------------------------------- | --------- | ---------
|Payable in cash                                                     | $ 170,000 | $ 145,000
|                                                                    |           |          
|# of stock options granted as part of annual Board fee compensation | -         | 75,000   



The amount and terms of any stock options
granted as compensation for Board member services is determined by the Board. We do not provide additional compensation for committee
participation (other than as noted previously re the minor additional amount for service as the Chairman of the Board and of the
Audit Committee) or for special assignments of the Board. (See Item 6.E “Share ownership” for details regarding stock
options granted to directors.)



During 2017 Mr. Charles Selby was paid $22,671
in respect of his being the  Interim Chief Financial Officer.



The Company reimburses directors for out-of-pocket
expenses for attending Board and committee meetings. We do not provide termination benefits for directors.



C.	           Board practices.

Expiration Dates

No director or member of our administrative,
or supervisory bodies has an expiration date for their current term of office. Directors are elected by shareholders at the annual
meeting of shareholders and hold the position either until the next annual shareholders’ meeting or until a successor is
appointed. The period during which each individual has served as a director is set out in the table under Item 6.A – “Directors
and senior management”.

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Service Contracts

No directors (other than an employment
contract for the CEO, Mr. Liszicasz) have service contracts with the Company or any of its subsidiaries that provide benefits upon
termination of employment.

Board of Directors Mandate

The principal role of the Board is
stewardship of the Company through the creation of shareholder value, including the protection and enhancement of the value of
its assets, as the fundamental objective. The stewardship responsibility means that the Board oversees the general operation of
the business and management, which is responsible for the day-to-day conduct of the business. The Board must assess and ensure
systems are in place to manage the risks of the Company’s business with the objective of preserving the Company’s assets.
The Board, through the CEO, sets the attitude and disposition of the Company towards compliance with applicable laws, environmental,
safety and health policies, financial practices and reporting. In addition to its primary accountability to shareholders, the Board
is also accountable to employees, government authorities, other stakeholders and the public. The Mandate of the Board of directors
is posted on the Company website and may viewed at www.nxtenergy.com or you may request a copy be mailed to you by writing to our
offices at Suite 302, 3320 - 17th Avenue SW Calgary, Alberta, Canada, T3E 0B4.

Board Committees

Corporate
Governance Committee

The Company and the Board recognize
the importance of corporate governance to the effective management of the Company and to its shareholders. The Company’s
approach to significant issues of corporate governance is designed with a view to ensuring that the business and affairs of the
Company are effectively managed so as to enhance shareholder value. The Mandate of the Corporate Governance Committee is posted
on the Company website and may be viewed at www.nxtenergy.com or you may request a copy be mailed to you by writing to our offices
at Suite 302, 3320 - 17th Avenue SW Calgary, Alberta, Canada, T3E 0B4.

The Board and management endorse the
need to establish forward-looking governance policies and to continuously evaluate and modify them to ensure their effectiveness.



Composition of the Corporate Governance
Committee

Messrs. Valentine (Chair), Wilcox and
Tilson are the current members of the Corporate Governance Committee. All members of the Corporate Governance Committee are independent
within the meaning of Canadian National Instrument 58-101.

Responsibilities
of the Corporate Governance Committee

The Corporate Governance Committee’s
duties, as outlined in its charter, are to deal with the Company’s approach to corporate governance and the promotion of
compliance with industry and regulatory standards. The committee is responsible for overseeing and assessing the functioning of
the Board and the committees of the Board and for the development, recommendation to the Board, implementation and assessment of
effective corporate governance principles and guidelines. The Committee’s responsibilities also include identifying new candidates
for director and recommending that the Board select qualified director candidates for election at the next annual meeting of shareholders.



Disclosure
Committee



Composition
of the Disclosure Committee

The Disclosure Committee currently consists
of Mr. Selby, Mr. Wilcox (Chair) and Mr. Brogowski (the VP Finance and CFO of the Company).



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Responsibilities
of the Disclosure Committee

The Disclosure Committee duties are
to ensure that the Company provides timely, accurate and balanced disclosure of all material information about the Company and
to provide fair and equal access to such information. All news releases, including but not limited to releases of material information,
are managed by the Disclosure Committee. If the information has been determined by the Disclosure Committee to be material, news
releases will be prepared, reviewed and then disseminated through a news-wire service that provides simultaneous service to widespread
news services and financial media. Additionally, the Committee is responsible for ensuring public disclosure through filing these
news releases on SEDAR and EDGAR as well as the Company’s website.



STRATEGIC
PLANNING COMMITTEE

Composition of the Strategic Planning
Committee

Messrs. Tilson (Chair), Wilcox and
Selby are the current members of the Strategic Planning Committee. All members of the Strategic Planning Committee are independent.

Responsibilities
of the Strategic Planning Committee

The Strategic Planning
Committee's duties are to set out the long-term goals of the Company and to take an active role in the development and execution
of plans to achieve those goals. The Committee participates in establishing priority areas of Company business, assessment of strategic
initiatives from Company senior executives with regard to development and implementation control of the Company Strategy and business
area specific strategies of the Company. The Committee also makes recommendations regarding the overall organization and management
structure including areas where management needs to be strengthened, reviewing the organizational job descriptions and requirements
and also procedures for coordination of organizational management and board resources. The Committee is actively involved in the
Company’s strategic planning process and reviews all materials relating to the strategic plan with management. The Board
is responsible for reviewing and approving the strategic plan. At least one board meeting each year is centered on discussing and
considering the strategic plan, which takes into account the risks and opportunities of the business. Management must seek the
Board’s approval for any transaction that would have a significant impact on the strategic plan.





AUDIT
COMMITTEE

Composition
of the Audit Committee

The Audit Committee consists of Messrs.
Wilcox (Chair), Selby and Tilson. All members of the Audit Committee are independent and each member is financially literate. The
Company’s Audit Committee Charter is posted on our website and may be viewed at www.nxtenergy.com or you may request a copy
be mailed to you by writing to our offices at Suite 302, 3320 – 17th Avenue SW, Calgary, Alberta, Canada, T3E
0B4.

Bruce Wilcox

Mr. Wilcox holds a Master of International
Management from the American Graduate School of International Management, and has extensive experience in financial statement analysis,
through his career serving as an analyst, fund manager and CEO in the investment management industry. He
has previously served as audit committee chair of a publicly traded company.

Charles Selby

Mr. Selby is both a lawyer and Professional
Engineer, holding B.Sc. (Hons) and JD degrees. He previously practiced law for two large Canadian law firms specializing in securities
and corporate finance matters and remains a member of good standing with the Bar. He has served
on the board and in management of a number of reporting issuers including Arakis Energy, which had operations in the Sudan, and
other issuers in the oil and natural gas industry. He is currently the CEO of Montana Exploration Corp. (formerly AltaCanada Energy
Corp.), an oil and gas company listed on the TSX, and is the president of Caledonian Royalty Corporation and Caledonian Global
Corporation, both private entities.

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Mr. Selby was also formerly the Chairman
and CEO of Canadian Star Energy Limited, and was formerly the Chief Financial Officer of AltaCanada Energy Corp. He also formerly
served as the Vice President and Corporate Secretary of Pengrowth Corporation, the administrator of Pengrowth Energy Trust. Mr.
Selby has previously served on the audit committee and as audit chairman of several reporting issuers.

John Tilson

Mr. Tilson has both MBA and CFA designations,
He previously served as an analyst, portfolio manager, and advisor in the US investment and financial industry with such firms
as Sutro & Company and EF Hutton & Company, and Roger Engemann. After working as an analyst and portfolio manager,
Mr. Tilson later became Executive Vice President & Managing Director of Pasadena Capital Company.

All members of the Audit Committee
have the educational background and experience that provides them with the knowledge and ability to understand accounting policies
and related financial reporting and disclosure issues, in order to fulfill their duties and responsibilities as an Audit Committee
member.

Audit Committee
Oversight - The Company’s Board has adopted all recommendations by the Audit Committee with respect to the nomination
and compensation of the external auditor.

Pre-Approval Policies
and Procedures - The Audit Committee has adopted a formal policy requiring the pre-approval of all audit and non-audit related
services to be provided by the Company’s principal auditor prior to the commencement of the engagement, subject to the following:

| | · | The Audit Committee will review annually
a list of audit, audit related, recurring tax and other non-audit services and recommend pre-approval of those services for the
upcoming year. Any additional requests will be addressed on a case-by-case specific engagement basis;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | For engagements not on the pre-approved
list, the Audit Committee has delegated to the Chair of the Committee the authority to pre-approve individual non-audit service
engagements with expected costs of up to $50,000 (annual aggregate total) subject to reporting to the Audit Committee, at its next
scheduled meeting; and
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | For engagements not on the pre-approved
list and with expected costs greater than $350,000 (annual aggregate total), the entire Audit Committee must approve this service,
generally at its next scheduled meeting.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



COMPENSATION
COMMITTEE

Composition
of the Compensation Committee

Messrs. Selby (Chair), and Tilson and
Valentine are members of the Compensation Committee, and are all independent. The charter or mandate of the Compensation Committee
is posted on the Company website and may viewed at www.nxtenergy.com or you may request a copy be mailed to you by writing to our
offices at 302, 3320 – 17th Avenue SW, Calgary, Alberta, Canada, T3E 0B4.



Responsibilities
of the Compensation Committee

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The Compensation Committee's duties,
as outlined in its charter, are to deal with the assessment of management and succession to key positions and compensation within
the Company. The Compensation Committee shall assist the Board in discharging the Board’s oversight responsibilities relating
to the compensation and retention of key senior management employees, and in particular the CEO, with the skills and expertise
needed to enable the Company to achieve its goals and strategies at fair and competitive compensation and appropriate performance
incentives. In discharging its responsibilities, the Compensation Committee will report and, where appropriate, make recommendations
to the Board in respect of the matters identified in the charter.



D.	           Employees

Fiscal year ended December 31, 2017

As
of the fiscal year ended December 31, 2017 we had a total of 9 employees and one part-time independent contractor. NXT has no employees
that are members of a labor union. The following summarizes the number of employees and independent contractors by main job function
as at December 31, 2017:





|Function                             | employees | contractors | total
|------------------------------------ | --------- | ----------- | -----
|Senior management team               | 1         | -           | 1    
|Finance, administration and sales    | 3         | 1           | 4    
|Operations and technical development | 5         | -           | 5    
|Total                                | 9         | 1           | 10   





All of the above noted staff are based
in Calgary, Canada. The 5 operations and technical development staff includes one research scientist holding a Ph.D. and 4 geoscientists.
We periodically engage other technical and administrative contract personnel as required on a project basis.

Fiscal year ended December 31, 2016

As at December 31, 2016, we had a staff
of 23 and one contractor, all based in Calgary, as follows:



|Function                             | employees | contractors | total
|------------------------------------ | --------- | ----------- | -----
|Senior management team               | 4         | -           | 4    
|Finance, administration and sales    | 6         | 1           | 7    
|Operations and technical development | 13        | -           | 13   
|Total                                | 23        | 1           | 24   





All
of the above noted staff are based in Calgary, Canada except for 2 based in the Santa Cruz, Bolivia. The 13 operations and technical
development staff includes one research scientist holding a Ph.D. and 5 geoscientists.

E.	            Share ownership.

Information on the ownership of our
common shares is given under Item 7, Major Shareholders and Related Party Transactions.



Summary of Stock Options, Restricted Share
Units and Stock Appreciation Rights Granted To Executive Officers and Directors



All stock options have been granted pursuant
to the Stock Option Plan (the “Plan”) of the Company or predecessor plans with substantially the same terms. The Plan
is approved and ratified by shareholders annually at the Company’s annual general meeting (“AGM”). The Plan,
as was re-approved and ratified at the Company’s last AGM held on June 4, 2016. Pursuant to this Plan, all stock option grants
must be approved by the Board of directors of the Company. Stock options may be granted to the directors, officers and employees
of NXT and to consultants retained by the Company. The aggregate number of common shares reserved for issuance under this Plan,
and any other plan of the Corporation, shall not, at the time of the stock option grant, exceed ten percent of the total number
of issued and outstanding shares (calculated on a non-diluted
basis) unless the Company receives the permission of the stock exchange or exchanges on which the shares are then listed to exceed
such threshold. No stock option shall be exercisable for a period exceeding five (5) years from the date the stock option is granted
unless the Company receives the permission of the stock exchange or exchanges on which the shares are then listed and as specifically
provided by the Board and as permitted under the rules of any stock exchange or exchanges on which the shares are then listed,
and in any event, no stock option shall be exercisable for a period exceeding ten (10) years from the date the option is granted.

4620-F/A for the year ended December 31, 2017


Table of Contents






Stock options are generally issued with a
three year vesting period wherein entitlement to exercise one third of the options granted shall vest at the end of each of the
first three years following the grant date. The exercise price for an option grant is set at the last trade price on the date preceding
the grant or some higher price at the discretion of the Board.



The Restricted Share Unit Plan (the”RSU”)
was approved and ratified by the shareholders at the Company’s last annual meeting on June 21, 2017. Pursuant to the RSU,
all grants must be approved by the Board of directors of the Company. Stock options may be granted to the directors, officers and
employees of NXT and to consultants retained by the Company. The aggregate number of common shares reserved for issuance under
this Plan, and any other plan of the Corporation, shall not, at the time of the RSU grant, exceed ten percent of the total number
of issued and outstanding shares (calculated on a non-diluted basis).



The RSU’s are issued with a three year
vesting where they shall vest at the end of each of the first three years following the grant date. The price is determined on
the vesting date.



The following stock options were granted to
NXT’s executive officers and directors in the three prior fiscal years ended December 31, 2016, 2015, and 2014 and to date
to April 30, 2018. No RSU’s have been granted to date.



In 2017 and to date in 2018:

| | · | No options were granted in 2017.
| | - | --------------------------------



| | · | A total of 1,000,000 stock options with
an exercise price of $1.13 per common share were granted in February 2018 to the new Chief Financial Officer.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------



In 2016:

| | · | A total of 150,000 stock options with
an exercise price of $1.49 per common share were granted in May 2016 to the new Chief Financial Officer.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------

| | · | A total of 37,500 stock options with
an exercise price of $1.48 per common share were granted in July 2016 to three directors as part of their elected form of payment
of the Board of director fees earned for 2016. All of these options had immediate vesting at the grant date.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | A total of 50,000 stock options with
an exercise price of $1.50 per common share were granted in July 2016 to a directors as part of their Advisory Board of director
fees earned for 2016.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | A total of 37,500 stock options with
an exercise price of $1.45 per common share were granted in December 2016 to three directors as part of their elected form of payment
of the Board of director fees earned for 2016. All of these options had immediate vesting at the grant date.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

In 2015:

| | · | A total of 300,000 stock options with
an exercise price of $2.10 per common share were granted in September 2015 to two persons who joined the NXT Board of Directors
in 2015.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

4720-F/A for the year ended December 31, 2017


Table of Contents


| | · | A total of 42,600 stock options with
an exercise price of $1.73 were granted in December 2015 to two directors as part of their elected form of payment of their Board
of director fees earned for 2015. All of these options had immediate vesting at the grant date
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The following table sets forth information
regarding outstanding stock options which have been granted to our directors and officers as of April 30, 2018. All options are
issued at an exercise price set at the closing trade price on the trading date prior to the grant. Each option entitles the option
holder to acquire one common share of the Company.



Issued and outstanding stock options held
by directors and officers of the Company(as of April 30, 2018)

|Name andPosition  | ExercisePrice                                                |  | OptionGrantDate | OptionExpiryDate | # of
        options
        held | %  of totaloutstanding options
|----------------- | ------------------------------------------------------------ |  | --------------- | ---------------- | --------------------------------- | ------------------------------
|George Liszicasz  | $ 0.86                                                       |  | 5-Jul-2013      | 5-Jul-2018       | 7,500                             |                               
|CEO & Director    | $ 1.83                                                       |  | 18-Dec-2013     | 18-Dec-1018      | 7,500                             |                               
|                  | $ 1.39                                                       |  | 9-Jul-2014      | 9-Jul-2019       | 7,500                             |                               
|                  | $ 1.35                                                       |  | 9-Jan-2015      | 9-Jan-2020       | 7,500                             |                               
|                  |                                                              |  |                 |                  | 30,000                            | 1.3 %                         
|                  |                                                              |  |                 |                  |                                   |                               
|Jakub Brogowski   | $ 1.13                                                       |  | 01-Feb-2018     | 01-Feb-2023      | 1,000,000                         |                               
|V-P Finance & CFO |                                                              |  |                 |                  |                                   |                               
|                  |                                                              |  |                 |                  | 1,000,000                         | 43.6%                         
|                  |                                                              |  |                 |                  |                                   |                               
|Charles Selby     | $ 0.86                                                       |  | 5-Jul-2013      | 5-Jul-2018       | 7,500                             |                               
|Director          | $ 1.83                                                       |  | 18-Dec-2013     | 18-Dec-2018      | 7,500                             |                               
|                  | $ 1.39                                                       |  | 9-Jul-2014      | 9-Jul-2019       | 7,500                             |                               
|                  | $ 1.35                                                       |  | 9-Jan-2015      | 9-Jan-2020       | 7,500                             |                               
|                  | $ 1.50                                                       |  | 22-Jul-2016     | 22-Jul-2021      | 50,000                            |                               
|                  |                                                              |  |                 |                  | 80,000                            | 3.5 %                         
|                  |                                                              |  |                 |                  |                                   |                               
|John Tilson       | $ 2.10                                                       |  | 16-Sep-2015     | 16-Sep-2020      | 150,000                           |                               
|Director          | $ 1.73                                                       |  | 10-Dec-2015     | 10-Dec-2020      | 25,600                            |                               
|                  | $ 1.48                                                       |  | 14-Jul-2016     | 14-Jul-2021      | 15,000                            |                               
|                  | $ 1.45                                                       |  | 22-Dec-2016     | 22-Dec-2021      | 15,000                            |                               
|                  |                                                              |  |                 |                  | 205,600                           | 9.0 %                         
|                  |                                                              |  |                 |                  |                                   |                               
|Thomas Valentine  | $ 0.86                                                       |  | 5-Jul-2013      | 5-Jul-2018       | 7,500                             |                               
|Director          | $ 1.83                                                       |  | 18-Dec-2013     | 18-Dec-2018      | 7,500                             |                               
|                  | $ 1.39                                                       |  | 9-Jul-2014      | 9-Jul-2019       | 7,500                             |                               
|                  | $ 1.35                                                       |  | 9-Jan-2015      | 9-Jan-2020       | 7,500                             |                               
|                  | $ 1.48                                                       |  | 14-Jul-2016     | 14-Jul-2021      | 7,500                             |                               
|                  | $ 1.45                                                       |  | 22-Dec-2016     | 22-Dec-2021      | 15,000                            |                               
|                  |                                                              |  |                 |                  | 52,500                            | 2.3 %                         
|                  |                                                              |  |                 |                  |                                   |                               
|Bruce Wilcox      | $ 2.10                                                       |  | 16-Sep-2015     | 16-Sep-2020      | 150,000                           |                               
|Director          | $ 1.73                                                       |  | 10-Dec-2015     | 10-Dec-2020      | 17,000                            |                               
|                  | $ 1.48                                                       |  | 14-Jul-2016     | 14-Jul-2021      | 15,000                            |                               
|                  | $ 1.45                                                       |  | 22-Dec-2016     | 22-Dec-2021      | 7,500                             |                               
|                  |                                                              |  |                 |                  | 189,500                           | 8.3 %                         
|                  |                                                              |  |                 |                  |                                   |                               
|                  | Total number of stock options held by officers and directors |  | 1,557,600       | 68.0 %          
|                  |                                                              |  |                 |                  |                                   |                               





4820-F/A for the year ended December 31, 2017


Table of Contents


ITEM
7.       MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS



A.	           Major
shareholders.

The following table sets forth information
concerning the beneficial ownership of our common shares as of
April 30, 2018 by persons who beneficially own 5% or more of the outstanding common shares of NXT, each person who is a director
of NXT, each executive officer named in this Form 20-F/A, each individual referenced in Item 6.E above and all directors and executive
officers as a group. For the purposes of this Form 20-F/A, a person is considered to be a “beneficial owner” of common
shares in the Company if that person has, or shares with another person, the power to direct the vote or disposition of the common
shares or to receive the economic benefit of ownership of the common shares.

A person is also deemed to be a beneficial
owner of a common share if that person has the right to acquire the share within 60 days by option or other agreement (whether
or not, in the case of a stock option, the current market price of the underlying common share is below the stock option exercise
price). Therefore, the table below also reflects, for each such beneficial owner, the number of options exercisable into common
shares within 60 days of April 30, 2018 that are owned by each beneficial owner, but, in determining the percentage ownership and
general voting power of such person, does not assume the exercise of options or the conversion of securities owned by any other
person.

We believe that the beneficial owners
of common shares listed below, based on information they furnished, have sole voting and investment power over the number of shares
listed opposite their names. The percentage of beneficial ownership is based on 62,826,176 common shares issued and outstanding
as of April 30, 2018. This total of 62,826,176 excludes all outstanding options and warrants that are exercisable within 60 days
of April 30, 2018 (which is adjusted for each individuals’ % purposes as noted in footnote 5 below).

|Beneficial Ownership of Directors and Officers (“D&O”)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | BeneficiallyOwned as atApril 30, 2018 | Percent of Common Shares6
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------- | -------------------------
|Directors and Officers:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                       |                          
|George Liszicasz 1 & 2                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                       | 15,832,490               
|Charles Selby 1                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                       |                          
|John Tilson 1                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                       |                          
|Thomas E. Valentine 1                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                       |                          
|Bruce Wilcox 1                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                       |                          
|Jakub Brogowski 2                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                       |                          
|Total D & O Common Shares                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                       | 20,188,758               
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                       |                          
|Major Shareholders (> 5%):
        Alberta Green Ventures Limited Partnership6                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                       | 6,220,057                
|Mork Capital Management,
        LLC., and Michael Mork4                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 5,644,420                             | 9.0 %                    
|1  	Director of NXT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                       |                          
|2  	Officer of NXT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                       |                          
|3 	Beneficially
        owns less than one percent of the total outstanding common shares.
        4 	based on information provided to the Company as atMarch 28, 2018 byMork Capital Management, LLC. and its principal, Mr. Michael Mork.
        5
        Alberta Green Ventures Limited partnership includes shares and warrants.
        6 For
        each beneficial owner’s percentage of common shares calculation, it is assumed that any stock options that they hold which
        are or will become exercisable within 60 days of April 30, 2018 have been exercised (while also assuming that no one else similarly
        exercises), and such options are thus included in both the numerator and denominator for purposes of each of their own individual
        calculations as follows: |                                      
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                       |                          

4920-F/A for the year ended December 31, 2017


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|          | common     | vested &    |           
|--------- | ---------- | ----------- | ----------
|          | shares     | exercisable | Pro forma 
|          | held       | options     | total     
|          |            |             |           
|Liszicasz | 15,802,490 | 30,000      | 15,832,490
|Selby     | 408,161    | 80,000      | 488,161   
|Tilson    | 2,833,748  | 155,600     | 2,989,348 
|Valentine | -          | 52,500      | 52,500    
|Wilcox    | 215,253    | 139,500     | 354,753   
|Brogowski | 138,176    | 333,330     | 471,506   
|          |            |             |           
|          | 19,397,828 | 790,930     | 20,188,758





Major changes in the last 3 years in the percentage
ownership of persons who beneficially own (as at the respective December 31, year-end dates) 5% or more of the outstanding common
shares of NXT were:



| | · | In May 2013, George Liszicasz acquired
2,000,000 common shares upon conversion of an initial total of 2,000,000 of the 10,000,000 preferred shares which he held. In August
2015, the remaining 8,000,000 preferred shares were converted into 8,000,000 common shares issued to George Liszicasz pursuant
to completion of the acquisition of the SFD® technology under the terms of the TTA.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | On February 16, 2018 the Company entered
into an agreement to complete a three-tranche PrivatePlacement under which the Alberta Green Ventures Limited Partnership
has committed to purchase 10,905,212 Units at a price of $0.924 per Unit for total gross proceeds of approximately $10,076,416.
Each Unit consists of one CommonShare and one-third of one Warrant. Each Warrant entitles the holder to acquire one Warrant
Share at an exercise price of $1.20 for twelve (12) months from closing of the first tranche of the Private Placement. The first
tranche of the Private Placement was completed on February 16, 2018 and the Company received $4,310,500 in connection with the
issuance of 4,665,043 Units.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The following information is taken
from the records of Computershare Trust Company of Canada, located in Calgary, Alberta, Canada, the Company's transfer agent for
its common shares. As of April 30, 2018 there were 131 registered holders of record of the Company's common shares, including 73
in the United States who collectively held 2,226,659 common shares, representing 3.5% of NXT’s 62,826,176 total issued and
outstanding common shares.

NXT is a foreign private issuer for its current
fiscal year. As of the last business day of the Company’s first fiscal quarter, the majority of the Company’s executive
officers and directors are Canadian citizens who reside in Canada, the majority of the Company’s assets are in Canada, and
the Company is administered principally in Canada. The Company’s major shareholders in common shares have the same voting
rights as other holders of common shares. The Company is not directly or indirectly owned or controlled by another corporation,
a foreign government or any other natural or legal persons severally or jointly. There are no arrangements known to the Company
which may result in a change of control of the Company.



B.	           Related
party transactions



Summarized below are certain other transactions
and business relationships between NXT and persons who are related parties, for the current fiscal year ended December 31, 2017
through the current date, April 30, 2018:



5020-F/A for the year ended December 31, 2017


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| | · | Details of stock options which have been
granted to related parties during the above noted period are included with Item 6.E above. Details of stock options which have
been exercised by related parties are noted below.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | One of the members of NXT’s Board
of directors is a partner in a law firm which provides legal advice to NXT. In 2017, NXT incurred legal expenses of $172,199 with
this firm, for which a total of $120,479 is included in accounts payable as at December 31, 2017. In 2018 as of the report date
total fees incurred are $20,893, for which $75,415 is still outstanding.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | In 2017 one board member received $22,671
in compensation for services provided as the Interim CFO. During 2018 he received $22,671 as compensation as the Interim CFO.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Accounts payable and accrued liabilities
at December 31, 2017 includes a total of $14,210 related to re-imbursement of expenses owing to persons who are directors and officers
of NXT. As of the report date $21,789 was outstanding to persons who are directors and officers of NXT.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | There were no stock options to acquire
common shares of the Company exercised in 2017 by persons who were directors or officers of NXT as at the date of their exercise.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------







C.            	Interests of experts and counsel.



Not applicable.

ITEM 8.
      FINANCIAL
INFORMATION



A.           	Consolidated statements and other financial
information.

The Company’s consolidated financial
statements are stated in Canadian dollars and are prepared in accordance with U.S. generally accepted accounting principles.

The financial statements and notes
thereto as required under Item 8 are attached as Exhibit 15.1 to this annual report and are incorporated by reference herein. The
audit report of KPMG LLP is included therein immediately preceding the consolidated financial statements and is also incorporated
by reference herein.

No significant events or changes have
occurred subsequent to the date of the December 31, 2017 consolidated financial statements, except as otherwise disclosed therein.

Legal Proceedings

To the best of the Company's knowledge,
there are no legal or arbitration proceedings existing or pending which have had or may have, significant effects on the Company's
financial position or profitability and no such proceedings are pending or known to be contemplated by governmental authorities.

Dividend Policy

The Company does not pay dividends.



B.           	Consolidated statements and other financial
information.

As of April 30, 2018, there have not
been any significant subsequent events which have occurred subsequent to the date of consolidated financial statements for the
year ended December 31, 2017. NXT’s interim, unaudited consolidated financial statements for the 3-month period ended March
31, 2018 will be released in mid-May, 2018.

5120-F/A for the year ended December 31, 2017


Table of Contents


ITEM 9.       THE
OFFER AND LISTING

A.	           Offer and listing details.



The following tables set forth the price history
of the Company’s common shares listed on the OTC in the United States and on the TSX-V and the TSX in Canada.1



|                                                                                    |                         | OTC QB   | TSX-V & TSX |          
|----------------------------------------------------------------------------------- | ----------------------- | -------- | ----------- | ---------
|Period                                                                              | High                    | Low      | High        | Low      
|                                                                                    | (in US$)                | (in US$) | (in Cdn$)   | (in Cdn$)
|5 prior fiscal years                                                                |                         |          |             |          
|Year ended                                                                          | December 31, 2017       | $1.19    | $0.32       | $1.57    
|Year ended                                                                          | December 31, 2016       | $1.41    | $0.90       | $1.92    
|Year ended                                                                          | December 31, 2015       | $ 2.17   | $ 0.99      | $ 2.73   
|Year ended                                                                          | December 31, 2014       | $ 1.80   | $ 0.84      | $ 1.93   
|Year ended                                                                          | December 31, 2013       | $ 1.99   | $ 0.56      | $ 2.04   
|                                                                                    |                         |          |             |          
|Prior Quarters                                                                      |                         |          |             |          
|Quarter ended                                                                       | Q1 - March 31, 2018     | $1.04    | $0.75       | $1.34    
|Quarter ended                                                                       | Q4 - December 31, 2017  | $0.96    | $0.32       | $1.20    
|Quarter ended                                                                       | Q3 - September 30, 2017 | $0.98    | $0.32       | $1.23    
|Quarter ended                                                                       | Q2 - June 30, 2017      | $0.99    | $0.64       | $1.33    
|Quarter ended                                                                       | Q1 - March 31, 2017     | $ 1.19   | $ 0.82      | $ 1.57   
|Quarter ended                                                                       | Q4 - December 31, 2016  | $1.22    | $0.96       | $1.59    
|Quarter ended                                                                       | Q3 - September 30, 2016 | $1.25    | $1.02       | $1.65    
|Quarter ended                                                                       | Q2 - June 30, 2016      | $1.21    | $0.95       | $1.55    
|Quarter ended                                                                       | Q1 - March 31, 2016     | $ 1.41   | $ 0.90      | $ 1.92   
|                                                                                    |                         |          |             |          
|For each of the last 6 months                                                       |                         |          |             |          
|Month ended                                                                         | March 31, 2018          | $1.04    | $0.85       | $1.34    
|Month ended                                                                         | February 28, 2018       | $1.00    | $0.75       | $1.27    
|Month ended                                                                         | January 31, 2018        | $1.02    | $0.79       | $1.25    
|Month ended                                                                         | December 31, 2017       | $0.96    | $0.49       | $1.20    
|Month ended                                                                         | November 30, 2017       | $0.90    | $0.44       | $1.15    
|Month ended                                                                         | October 31, 2017        | $0.74    | $0.32       | $0.92    
|(1)See section C. “Markets” below for further information on share trading history. |                         |         



B.	           Plan of distribution.

Not applicable.

C.           	Markets.

Our common shares are currently quoted
in the United States on the OTC Markets QB Exchange under the symbol “NSFDF”, in Canada on the TSX-V under the symbol
“SFD.V” (to March 21, 2016) and on the TSX under the symbol “SFD” effective from March 22, 2016, and in
Europe on the Frankfurt and Berlin Exchanges (both of these listings are inactive) under the symbol “EFW”.

The Company’s common shares commenced
trading on the US Over-The-Counter Bulletin Board pursuant to a reverse takeover transaction in 1996, and were approved for listing
on the Frankfurt and Berlin Exchanges in January 2004, and on the TSX-V in December 2007. Effective March 22, 2016, NXT upgraded
its Canadian listing from the TSX-V to the TSX.

5220-F/A for the year ended December 31, 2017


Table of Contents


D.	           Selling shareholders.

Not applicable.

E.	            Dilution.

Not applicable.

F.            	Expenses of the issue.

Not applicable.

ITEM
10.     ADDITIONAL INFORMATION

A.	           Share capital.

Not applicable.

B.	           Memorandum and articles of
association.

NXT was incorporated in the State of
Nevada. With respect to the foregoing items, the law applicable to NXT in the Province of Alberta is not significantly different
from that in the State of Nevada. NXT was established in Alberta pursuant to a Certificate of Continuance issued October 24, 2003
by the Registrar of Corporations of the Province of Alberta. NXT’s Alberta Corporate Access Number is 2010730915. The Articles
of Continuance of NXT were amended to create the Series 1 Preferred Shares on December 28, 2006, and provide that there are no
restrictions on the nature of the business that may be carried on by NXT. On September 19, 2008, pursuant to Articles of Amendment,
the name of the Company was changed from Energy Exploration Technologies Inc. to NXT Energy Solutions Inc.

Quorum

The Board of directors of NXT may fix the
quorum for meetings of the Board or of a committee of the Board, but unless so fixed, a majority of the directors or of a committee
of directors holding office at the time of the meeting constitutes a quorum provided that no business may be transacted unless
at least half of the directors present are resident Canadians. Business cannot be transacted without a quorum. A quorum of directors
may vote on any matter of business properly brought before the meeting provided that where a director is a party to a material
contract or proposed material contract or is a director or an officer of or has a material interest in any person who is a party
to a material contract or proposed material contract with NXT, such director must disclose his or her interest at the earliest
possible date, request the conflict be noted in the minutes of the meeting and, with few exceptions, refrain from voting on the
matter in which the director has a conflict of interest. There is no limitation on the Board of directors to vote on matters of
their remuneration as a director, officer, employee or agent of NXT or of an affiliate of NXT.



Borrowing Powers

The Board of directors may, without authorization
of the shareholders of NXT:

| | (a) | borrow money on the credit of NXT;
| | --- | ----------------------------------

| | (b) | issue, reissue, sell or pledge debt obligations
of NXT;
| | --- | -------------------------------------------------------

| | (c) | subject to restrictions respecting financial
assistance prescribed in the ABCA, guarantee, on behalf of NXT, the performance of an obligation of any person; and
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (d) | mortgage, hypothecate, pledge or otherwise
create a security interest in all or any property of NXT, owned or subsequently acquired, to secure any obligation of NXT.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------



The Board of directors of NXT may, by resolution,
delegate to a director, a committee of directors or an officer all or any of the foregoing borrowing powers.



Directors

A person is qualified to be or stand for election
as a director provided such person is at least 18 years of age, is not bankrupt and is not mentally incapacitated pursuant to applicable
mental health legislation of the Province of Alberta or pursuant to an order of the courts of the Province of Alberta. There is
no provision in NXT’s Articles or By-Laws relating to the retirement or non-retirement
of directors under an age limit requirement. There is also no requirement in NXT’s Articles or By-Laws for a director to
hold securities of NXT.

5320-F/A for the year ended December 31, 2017


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Pursuant to the ABCA, a director or officer
shall not be disqualified by his office, or be required to vacate his office, by reason only that he is a party to, or is a director
or officer or has a material interest in any person who is a party to, a material contract or proposed material contract with NXT
or subsidiary thereof. Such a director or officer shall, however, disclose the nature and extent of his interest in the contract
at the time and in the manner provided by the ABCA. Any such contract or proposed contract shall be referred to the Board of directors
of NXT or shareholders for approval even if such contract is one that in the ordinary course of NXT's business would not require
approval by the Board or shareholders. Subject to the provisions of the ABCA, a director shall not by reason only of his office
be accountable to NXT or to its shareholders for any profit or gain realized from such a contract or transaction, and such contract
or transaction shall not be void or voidable by reason only of the director's interest therein, provided that the required declaration
and disclosure of interest is properly made, the contract or transaction is approved by the directors or shareholders, and it is
fair and reasonable to NXT at the time it was approved and, if required by the ABCA, the director refrains from voting as a director
on the contract or transaction and absents himself from the director's meeting at which the contract is authorized or approved
by the directors, except attendance for the purpose of being counted in the quorum.









Rights Attached to Common Shares

The holders of the common shares are entitled
to dividends as and when declared by the directors of NXT, to one vote per share at meetings of shareholders of NXT, and upon liquidation,
subject to the rights of the holders of preferred shares, are entitled to share rateably with the holders of the common shares
in all distributions of assets of NXT.



Rights Attached to Preferred Shares

Preferred shares may be issued from time to
time in one or more series. The Board of directors of NXT is expressly authorized to provide by resolution duly adopted prior to
issuance, for the creation of each such series and to fix the designation, rights, privileges, restrictions and conditions attached
to the shares of each such series, including the rate or amount of dividends or the method of calculating dividends, the dates
of payment of dividends, the redemption, purchase and/or conversion prices and terms and conditions of redemption, purchase and/or
conversion, and any sinking fund or other provisions.



The preferred shares of each series shall,
with respect to the payment of dividends and the distribution of assets or return of capital in the event of liquidation, dissolution
or winding-up of NXT, whether voluntary or involuntary, or any other return of capital or distribution of the assets of NXT among
its shareholders for the purpose of winding up its affairs, rank on a parity with the preferred shares of every other series and
be entitled to preference over the common shares and over any other shares of NXT, if any, ranking junior to the preferred shares.
The preferred shares of any series may also be given other preferences, not inconsistent with the articles of continuance of NXT
(the "Articles"), over the common shares and any other shares of NXT ranking junior to the preferred shares of a series
as may be fixed by the Board of directors of NXT.



If any cumulative dividends or amounts payable
on the return of capital in respect of a series of preferred shares are not paid in full, all series of preferred shares shall
participate rateably in respect of accumulated dividends and return of capital.



Unless the Board of directors of NXT otherwise
determine in the articles of amendment designating a series of preferred shares, the holder of each share of a series of preferred
shares shall not, as such, be entitled to receive notice of or vote at any meeting of shareholders, except as otherwise specifically
provided in the ABCA.





Alteration of the Rights of Shareholders

Under the ABCA, any substantive change to
the Articles (including, but not limited to, change of any maximum number of shares that NXT is authorized to issue, creation of
new classes of shares, add, change or remove any rights, privileges, restrictions and conditions in
respect of all or any of its shares, whether issued or unissued, change the shares of any class or series, whether issued or unissued,
into a different number of shares of the same class or series or into the same or a different number of shares of other classes
or series) or other fundamental changes to the capital structure of NXT, including a proposed amalgamation or continuance of NXT
out of the jurisdiction, requires shareholder approval by not less than 2/3 of the votes cast by shareholders voting in person
or by proxy at a shareholders’ meeting called for that purpose. In certain prescribed circumstances, holders of shares of
a class or of a series are entitled to vote separately as a class or series on a proposal to amend the Articles whether or not
shares of a class or series otherwise carry the right to vote. The holders of a series of shares of a class are entitled to vote
separately as a series only if the series is affected by an amendment in a manner different from other shares of the same class.

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Meetings of Shareholders

NXT’s By-Laws provide that the Board
of directors shall call an annual meeting of shareholders to be held not later than fifteen months after holding the last preceding
annual meeting. NXT’s By-Laws provide that the Board of directors may at any time call a special meeting of shareholders.
Only the registered holders of shares are entitled to receive notice of and vote at annual and special meetings of shareholders,
except to the extent that:



| | (a) | if a record date is fixed, the person
transfers ownership of any of the person’s shares after the record date; or
| | --- | -----------------------------------------------------------------------------------------------------------------



| | (b) | if no record date is fixed, the person
transfers ownership of any of the person’s shares after the date on which the list of shareholders is prepared; and
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------

| | (c) | the transferee of those shares;
| | --- | -------------------------------

| | § | produces properly endorsed share certificates;
or
| | - | -------------------------------------------------

| | § | otherwise establishes ownership of the
shares; and
| | - | --------------------------------------------------

| | § | demands, not later than ten (10) days
before the meeting, that the transferee’s name be included in the list before the meeting;
| | - | --------------------------------------------------------------------------------------------------------------------------------



in which case
the transferee is entitled to vote the shares.



The ABCA also permits the holders of not less
than 5% of the issued voting securities of NXT to give notice to the Board of directors requiring them to call and hold a meeting
of NXT.



The only persons entitled to be present at
a meeting of shareholders are:



| | (a) | the shareholders entitled to vote at
the meeting;
| | --- | -------------------------------------------------

| | (b) | the Board of directors of NXT;
| | --- | ------------------------------

| | (c) | the external auditor of NXT; and
| | --- | --------------------------------

| | (d) | any others who, although not entitled
or required under the provisions of the ABCA, any unanimous shareholder agreement, or the Articles or the By-Laws, are allowed
to be present at the meeting.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Any other person may be admitted only on the
invitation of the Chairperson of the meeting or with the consent of the meeting.



There are no restrictions in NXT’s Articles
or By-Laws as to the number of shares that may be held by non-residents other than restrictions set out in the Investment Canada
Act (the “ICA”) (Canada), as further described under Item 10.D – “Exchange Controls” below.





Change of Control

There are no specific provisions in the Articles
or By-Laws of NXT that have the effect of delaying, deferring or preventing a change of control of NXT and that would operate only
with respect to a merger, acquisition or corporate restructuring involving NXT (or any of its
subsidiaries). Notwithstanding this, the Board of directors, under the general powers conferred to it under NXT’s By-Laws,
have the authority to approve and invoke a shareholders rights plan that will protect shareholders from unfair, abusive or coercive
take-over strategies, including the acquisition or control of NXT by a bidder in a transaction or series of transactions that does
not treat all shareholders equally or fairly or that does not afford all shareholders an equal opportunity to share in any premium
paid upon an acquisition of control. NXT has not adopted such a plan.

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Shareholder Ownership Disclosure

There are no provisions in NXT’s By-Laws
regarding public disclosure of individual shareholdings.



C.	           Material contracts.



Each material contract, other than contracts
entered into in the ordinary course of business, to which the Company has been a party, for the two years immediately preceding
publication of this annual report, is summarized elsewhere herein.



D.	           Exchange controls.

There are no governmental laws, decrees or
regulations in Canada relating to restrictions on the export or import of capital, or affecting the remittance of interest, dividends
or other payments to non-residents. Dividends paid to U.S. residents, however, are subject to a 15% withholding tax or a 5% withholding
tax for dividends if the shareholder is a corporation owning at least 10% of the outstanding voting shares of NXT pursuant to Article
X of the reciprocal tax treaty between Canada and the U.S.



Except as provided in the ICA, which has provisions
that restrict the holding of voting shares by non-Canadians, there are no limitations specific to the rights of non-Canadians to
hold or vote the common shares under the laws of Canada or the Province of Alberta, or in the charter documents of NXT or its subsidiaries.



Management of NXT believes that the following
summary fairly describes those provisions of the ICA pertinent to an investment in NXT by a person who is not a Canadian resident
(a “non-Canadian”).



The ICA requires a non-Canadian making an
investment which would result in the acquisition of control of a Canadian business (i.e. the gross value of the assets of which
exceed a certain monetary threshold) to identify, notify, or file an application for review with the Investment Review Division
of Industry Canada (“IRD”).



The notification procedure involves a brief
statement of information about the investment on a prescribed form which is required to be filed with the IRD by the investor at
any time up to 30 days following implementation of the investment. It is intended that investments requiring only notification
will proceed without government intervention unless the investment is in a specific type of business activity related to Canada’s
cultural heritage and national identity.



If an investment is reviewable under the ICA,
an application for review in the form prescribed is normally required to be filed with the IRD prior to the investment taking place
and the investment may not be implemented until the review has been completed and the Minister of Industry Canada (the “Minister”)
(the Minister responsible for Investment Canada) is satisfied that the investment is likely to be of net benefit to Canada. The
Minister has up to 75 days to make this determination. If the Minister is not satisfied that the investment is likely to be of
net benefit to Canada, the non-Canadian must not implement the investment or, if the investment has been implemented, may be required
to divest himself of control of the business that is the subject of the investment.



The following investments by non-Canadians
are subject to notification under the ICA:

| | 1. | An investment to establish a new Canadian
business; and
| | -- | -------------------------------------------------------

| | 2. | An investment to acquire control of a
Canadian business that is not reviewable pursuant to the Act.
| | -- | ---------------------------------------------------------------------------------------------------



The following investments by a non-Canadian
are subject to review under the ICA:

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| | 1. | An investment is reviewable if there
is an acquisition of a Canadian business and the asset value of the Canadian business being acquired equals or exceeds the following
thresholds:
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (a) | For non-World Trade Organization (“WTO”)
investors, the threshold is $5 million for a direct acquisition and $50 million for an indirect acquisition; the $5 million threshold
will apply however for an indirect acquisition if the asset value of the Canadian business being acquired exceeds 50% of the asset
value of the global transaction;
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | Except as specified in paragraph (c)
below, a threshold is calculated annually for reviewable direct acquisitions by or from WTO investors. The threshold for 2012 was
$330 million. Pursuant to Canada’s international commitments, indirect acquisitions by or from WTO investors are not reviewable;
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (c) | The limits set out in paragraph (a) apply
to all investors for acquisitions of a Canadian business that:
| | --- | --------------------------------------------------------------------------------------------------------

(i)engages in the production of uranium and owns an interest in a
producing uranium property in Canada;

(ii)provides any financial service;

(iii)provides any transportation services; or

(iv)is a cultural business.



Notwithstanding the above, any investment
which is usually only notifiable, including the establishment of a new Canadian business, and which falls within a specific business
activity, including the publication and distribution of books, magazines, newspapers, film or video recordings, audio or video
music recordings, or music in print or machine-readable form may be reviewed if an Order-in-Council directing a review is made
and a notice is sent to the investor within 21 days following the receipt of a certified complete notification.



Generally speaking, an acquisition is direct
if it involves the acquisition of control of the Canadian business or of its direct or indirect Canadian parent and an acquisition
is indirect if it involves the acquisition of control of a non-Canadian direct or indirect parent of an entity carrying on the
Canadian business. No change of voting control will be deemed to have occurred if less than one-third of the voting control of
a Canadian corporation is acquired by an investor.



A WTO investor, as defined in the ICA, includes
an individual who is a national of a member country of the WTO or who has the right of permanent residence in relation to that
WTO member, a government or government agency of a WTO investor-controlled corporation, a limited partnership, trust or joint venture
that is neither WTO-investor controlled or Canadian controlled of which two-thirds of its Board of directors, general partners
or trustees, as the case may be, are any combination of Canadians and WTO investors.



The ICA exempts certain transactions from
the notification and review provisions of ICA, including, among others, (a) an acquisition of voting shares if the acquisition
were made in the ordinary course of that person’s business as a trader or dealer in securities; (b) an acquisition of control
of the Company in connection with the realization of a security interest granted for a loan or other financial assistance and not
for any purpose related to the provisions of the ICA; (c) the acquisition of voting interests by any person in the ordinary course
of a business carried on by that person that consists of providing, in Canada, venture capital on terms and conditions not inconsistent
with such terms and conditions as may be fixed by the Minister; and (d) acquisition of control of the Company by reason of an amalgamation,
merger, consolidation or corporate reorganization, following which the ultimate direct or indirect control in fact of the Company,
through the ownership of voting interests, remains unchanged.



E.            	Taxation.



Certain United States Federal Income Tax
Considerations



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The following is a general summary
of certain material U.S. federal income tax considerations applicable to a U.S. Holder (as defined below) arising from and relating
to the acquisition, ownership and disposition of common shares of the Company.

This summary is for general information
purposes only and does not purport to be a complete analysis or listing of all potential U.S. federal income tax considerations
that may apply to a U.S. Holder arising from and relating to the acquisition, ownership, and disposition of common shares. In addition,
this summary does not take into account the individual facts and circumstances of any particular U.S. Holder that may affect the
U.S. federal income tax consequences to such U.S. Holder, including, without limitation, specific tax consequences to a U.S. Holder
under an applicable income tax treaty. Accordingly, this summary is not intended to be, and should not be construed as, legal or
U.S. federal income tax advice with respect to any U.S. Holder. This summary does not address the U.S. federal alternative minimum,
U.S. federal estate and gift, U.S. state and local, and non-U.S. tax consequences to U.S. Holders of the acquisition, ownership,
and disposition of common shares. In addition, except as specifically set forth below, this summary does not discuss applicable
tax reporting requirements. Each prospective U.S. Holder should consult its own tax advisors regarding the U.S. federal, U.S. federal
alternative minimum, U.S. federal estate and gift, U.S. state and local, and non-U.S. tax consequences relating to the acquisition,
ownership and disposition of common shares.

No legal opinion from U.S. legal counsel
or ruling from the Internal Revenue Service (the “IRS”) has been requested, or will be obtained, regarding the U.S.
federal income tax consequences of the acquisition, ownership, and disposition of common shares. This summary is not binding on
the IRS, and the IRS is not precluded from taking a position that is different from, and contrary to, the positions taken in this
summary. In addition, because the authorities on which this summary is based are subject to various interpretations, the IRS and
the U.S. courts could disagree with one or more of the conclusions described in this summary.

Scope of this Summary



Authorities



This summary is based on the Internal
Revenue Code of 1986, as amended (the “Code”), Treasury Regulations (whether final, temporary, or proposed), published
rulings of the IRS, published administrative positions of the IRS, the Convention Between Canada and the United States of America
with Respect to Taxes on Income and Capital, signed September 26, 1980, as amended (the “Canada-U.S. Tax Convention”),
and U.S. court decisions that are applicable, and, in each case, as in effect and available, as of the date of this document. Any
of the authorities on which this summary is based could be changed in a material and adverse manner at any time, and any such change
could be applied retroactively. This summary does not discuss the potential effects, whether adverse or beneficial, of any proposed
legislation.

U.S. Holders



For purposes of this summary, the term
"U.S. Holder" means a beneficial owner of common shares that is for U.S. federal income tax purposes:

| | · | an individual who is a citizen or resident
of the United States;
| | - | ----------------------------------------------------------------

| | · | a corporation (or other entity treated
as a corporation for U.S. federal income tax purposes) organized under the laws of the United States, any state thereof or the
District of Columbia;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | an estate whose income is subject to
U.S. federal income taxation regardless of its source; or
| | - | ----------------------------------------------------------------------------------------------

| | · | a trust that (1) is subject to the primary
supervision of a court within the U.S. and the control of one or more U.S. persons for all substantial decisions or (2) has a valid
election in effect under applicable Treasury Regulations to be treated as a U.S. person.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

U.S. Holders Subject to Special U.S. Federal
Income Tax Rules Not Addressed



This summary does not address the U.S.
federal income tax considerations applicable to U.S. Holders that are subject to special provisions under the Code, including,
but not limited to, U.S. Holders that: (a) are tax-exempt organizations, qualified retirement plans, individual retirement accounts,
or other tax-deferred accounts; (b) are financial institutions, underwriters, insurance
companies, real estate investment trusts, or regulated investment companies; (c) are broker-dealers, dealers, or traders in securities
or currencies that elect to apply a mark-to-market accounting method; (d) have a “functional currency” other than the
U.S. dollar; (e) own common shares as part of a straddle, hedging transaction, conversion transaction, constructive sale, or other
arrangement involving more than one position; (f) acquire common shares in connection with the exercise of employee stock options
or otherwise as compensation for services; (g) hold common shares other than as a capital asset within the meaning of Section 1221
of the Code (generally, property held for investment purposes); (h) are required to accelerate the recognition of any item of gross
income with respect to common shares as a result of such income being recognized on an applicable financial statement; or (i) own,
have owned or will own (directly, indirectly, or by attribution) 10% or more of the total combined voting power or value of the
outstanding shares of the Company. This summary also does not address the U.S. federal income tax considerations applicable to
U.S. Holders who are: (a) U.S. expatriates or former long-term residents of the U.S.; (b) persons that have been, are, or will
be a resident or deemed to be a resident in Canada for purposes of the Income Tax Act (Canada) (the “Tax Act”); (c)
persons that use or hold, will use or hold, or that are or will be deemed to use or hold common shares in connection with carrying
on a business in Canada; (d) persons whose common shares constitute “taxable Canadian property” under the Tax Act;
or (e) persons that have a permanent establishment in Canada for the purposes of the Canada-U.S. Tax Convention. U.S. Holders that
are subject to special provisions under the Code, including, but not limited to, U.S. Holders described immediately above, should
consult their own tax advisors regarding the U.S. federal, U.S. federal alternative minimum, U.S. federal estate and gift, U.S.
state and local, and non-U.S. tax consequences relating to the acquisition, ownership and disposition of common shares.

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If an entity or arrangement that is
classified as a partnership (or other “pass-through” entity) for U.S. federal income tax purposes holds common shares,
the U.S. federal income tax consequences to such entity or arrangement and the partners (or other owners or participants) of such
entity or arrangement generally will depend on the activities of the entity or arrangement and the status of such partners (or
owners or participants). This summary does not address the tax consequences to any such partner (or owner or participants). Partners
(or other owners or participants) of entities or arrangements that are classified as partnerships or as “pass-through”
entities for U.S. federal income tax purposes should consult their own tax advisors regarding the U.S. federal income tax consequences
arising from and relating to the acquisition, ownership and disposition of common shares.

Passive Foreign Investment Company Rules



PFIC Status of the Company



If the Company were to constitute a
“passive foreign investment company” under the meaning of Section 1297 of the Code (a “PFIC”, as defined
below) for any year during a U.S. Holder’s holding period, then certain potentially adverse rules may affect the U.S. federal
income tax consequences to a U.S. Holder as a result of the acquisition, ownership and disposition of common shares. [The Company
believes that it was classified as a PFIC for the tax year ended December 31, 2017, but based on current business plans and financial
expectations, the Company does not anticipate that it will be a PFIC for its current tax year.] [NTD: Company to confirm.]
No opinion of legal counsel or ruling from the IRS concerning the status of the Company as a PFIC has been obtained or is currently
planned to be requested. The determination of whether any corporation was, or will be, a PFIC for a tax year depends, in part,
on the application of complex U.S. federal income tax rules, which are subject to differing interpretations. In addition, whether
any corporation will be a PFIC for any tax year depends on the assets and income of such corporation over the course of each such
tax year and, as a result, cannot be predicted with certainty as of the date of this document. Accordingly, there can be no assurance
that the IRS will not challenge any determination made by the Company (or any subsidiary of the Company) concerning its PFIC status.
Each U.S. Holder should consult its own tax advisors regarding the PFIC status of the Company and each subsidiary of the Company.

In any year in which the Company is
classified as a PFIC, a U.S. Holder will be required to file an annual report with the IRS containing such information as Treasury
Regulations and/or other IRS guidance may require. In addition to penalties, a failure to satisfy such reporting requirements may
result in an extension of the time period during which the IRS can assess a tax. U.S. Holders should consult their own tax advisors
regarding the requirements of filing such information returns under these rules, including the requirement to file an IRS Form
8621.

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The Company generally will be a PFIC
if, for a tax year, (a) 75% or more of the gross income of the Company is passive income (the “PFIC income test”) or
(b) 50% or more of the value of the Company’s assets either produce passive income or are held for the production of passive
income, based on the quarterly average of the fair market value of such assets (the “PFIC asset test”). “Gross
income” generally includes all sales revenues less the cost of goods sold, plus income from investments and from incidental
or outside operations or sources, and “passive income” generally includes, for example, dividends, interest, certain
rents and royalties, certain gains from the sale of stock and securities, and certain gains from commodities transactions.

For purposes of the PFIC income test
and PFIC asset test described above, if the Company owns, directly or indirectly, 25% or more of the total value of the outstanding
shares of another corporation, the Company will be treated as if it (a) held a proportionate share of the assets of such other
corporation and (b) received directly a proportionate share of the income of such other corporation. In addition, for purposes
of the PFIC income test and PFIC asset test described above, and assuming certain other requirements are met, “passive income”
does not include certain interest, dividends, rents, or royalties that are received or accrued by the Company from certain “related
persons” (as defined in Section 954(d)(3) of the Code) also organized in Canada, to the extent such items are properly allocable
to the income of such related person that is not passive income.

Under certain attribution rules, if
the Company is a PFIC, U.S. Holders will generally be deemed to own their proportionate share of the Company’s direct or
indirect equity interest in any company that is also a PFIC (a ‘‘Subsidiary PFIC’’), and will generally
be subject to U.S. federal income tax on their proportionate share of (a) any “excess distributions,” as described
below, on the stock of a Subsidiary PFIC and (b) a disposition or deemed disposition of the stock of a Subsidiary PFIC by the Company
or another Subsidiary PFIC, both as if such U.S. Holders directly held the shares of such Subsidiary PFIC. In addition, U.S. Holders
may be subject to U.S. federal income tax on any indirect gain realized on the stock of a Subsidiary PFIC on the sale or disposition
of common shares. Accordingly, U.S. Holders should be aware that they could be subject to tax under the PFIC rules even if no distributions
are received and no redemptions or other dispositions of common shares are made.

Default PFIC Rules under Section 1291 of
the Code



If the Company is a PFIC for any tax
year during which a U.S. Holder owns common shares, the U.S. federal income tax consequences to such U.S. Holder of the acquisition,
ownership, and disposition of common shares will depend on whether and when such U.S. Holder makes an election to treat the Company
and each Subsidiary PFIC, if any, as a “qualified electing fund” or “QEF” under Section 1295 of the Code
(a “QEF Election”) or makes a mark-to-market election under Section 1296 of the Code (a “Mark-to-Market Election”).
A U.S. Holder that does not make either a QEF Election or a Mark-to-Market Election will be referred to in this summary as a “Non-Electing
U.S. Holder.”

A Non-Electing U.S. Holder will be
subject to the rules of Section 1291 of the Code (described below) with respect to (a) any gain recognized on the sale or other
taxable disposition of common shares and (b) any “excess distribution” received on the common shares. A distribution
generally will be an “excess distribution” to the extent that such distribution (together with all other distributions
received in the current tax year) exceeds 125% of the average distributions received during the three preceding tax years (or during
a U.S. Holder’s holding period for the common shares, if shorter).

Under Section 1291 of the Code, any
gain recognized on the sale or other taxable disposition of common shares (including an indirect disposition of the stock of any
Subsidiary PFIC), and any “excess distribution” received on common shares or with respect to the stock of a Subsidiary
PFIC, must be ratably allocated to each day in a Non-Electing U.S. Holder’s holding period for the respective common shares.
The amount of any such gain or excess distribution allocated to the tax year of disposition or distribution of the excess distribution
and to years before the entity became a PFIC, if any, would be taxed as ordinary income (and not eligible for certain preferred
rates). The amounts allocated to any other tax year would be subject to U.S. federal income tax at the highest tax rate applicable
to ordinary income in each such year, and an interest charge would be imposed on the tax liability for each such year, calculated
as if such tax liability had been due in each such year. A Non-Electing U.S. Holder that is not a corporation must treat any such
interest paid as “personal interest,” which is not deductible.

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If the Company is a PFIC for any tax
year during which a Non-Electing U.S. Holder holds common shares, the Company will continue to be treated as a PFIC with respect
to such Non-Electing U.S. Holder, regardless of whether the Company ceases to be a PFIC in one or more subsequent tax years. A
Non-Electing U.S. Holder may terminate this deemed PFIC status by electing to recognize gain (which will be taxed under the rules
of Section 1291 of the Code discussed above), but not loss, as if such common shares were sold on the last day of the last tax
year for which the Company was a PFIC.

QEF Election



A U.S. Holder that makes a timely and
effective QEF Election for the first tax year in which the holding period of its common shares begins generally will not be subject
to the rules of Section 1291 of the Code discussed above with respect to its common shares. A U.S. Holder that makes a timely and
effective QEF Election will be subject to U.S. federal income tax on such U.S. Holder’s pro rata share of (a) the net capital
gain of the Company, which will be taxed as long-term capital gain to such U.S. Holder, and (b) the ordinary earnings of the Company,
which will be taxed as ordinary income to such U.S. Holder. Generally, “net capital gain” is the excess of (a) net
long-term capital gain over (b) net short-term capital loss, and “ordinary earnings” are the excess of (a) “earnings
and profits” over (b) net capital gain. A U.S. Holder that makes a QEF Election will be subject to U.S. federal income tax
on such amounts for each tax year in which the Company is a PFIC, regardless of whether such amounts are actually distributed to
such U.S. Holder by the Company. However, for any tax year in which the Company is a PFIC and has no net income or gain, U.S. Holders
that have made a QEF Election would not have any income inclusions as a result of the QEF Election. If a U.S. Holder that made
a QEF Election has an income inclusion, such a U.S. Holder may, subject to certain limitations, elect to defer payment of current
U.S. federal income tax on such amounts, subject to an interest charge. If such U.S. Holder is not a corporation, any such interest
paid will be treated as “personal interest,” which is not deductible.

A U.S. Holder that makes a timely and
effective QEF Election with respect to the Company generally (a) may receive a tax-free distribution from the Company to the extent
that such distribution represents “earnings and profits” of the Company that were previously included in income by
the U.S. Holder because of such QEF Election and (b) will adjust such U.S. Holder’s tax basis in the common shares to reflect
the amount included in income or allowed as a tax-free distribution because of such QEF Election. In addition, a U.S. Holder that
makes a QEF Election generally will recognize capital gain or loss on the sale or other taxable disposition of common shares.

The procedure for making a QEF Election,
and the U.S. federal income tax consequences of making a QEF Election, will depend on whether such QEF Election is timely. A QEF
Election will be treated as “timely” if such QEF Election is made for the first year in the U.S. Holder’s holding
period for the common shares in which the Company was a PFIC. A U.S. Holder may make a timely QEF Election by filing the appropriate
QEF Election documents at the time such U.S. Holder files a U.S. federal income tax return for such year. If a U.S. Holder does
not make a timely and effective QEF Election for the first year in the U.S. Holder’s holding period for the common shares,
the U.S. Holder may still be able to make a timely and effective QEF Election in a subsequent year if such U.S. Holder meets certain
requirements and makes a “purging” election to recognize gain (which will be taxed under the rules of Section 1291
of the Code discussed above) as if such common shares were sold for their fair market value on the day the QEF Election is effective.
If a U.S. Holder makes a QEF Election but does not make a “purging” election to recognize gain as discussed in the
preceding sentence, then such U.S. Holder shall be subject to the QEF Election rules and shall continue to be subject to tax under
the rules of Section 1291 discussed above with respect to its common shares. If a U.S. Holder owns PFIC stock indirectly through
another PFIC, separate QEF Elections must be made for the PFIC in which the U.S. Holder is a direct shareholder and the Subsidiary
PFIC for the QEF rules to apply to both PFICs.

A QEF Election will apply to the tax
year for which such QEF Election is timely made and to all subsequent tax years, unless such QEF Election is invalidated or terminated
or the IRS consents to revocation of such QEF Election. If a U.S. Holder makes a QEF Election and, in a subsequent tax year, the
Company ceases to be a PFIC, the QEF Election will remain in effect (although it will not be applicable) during those tax years
in which the Company is not a PFIC. Accordingly, if the Company becomes a PFIC in another subsequent tax year, the QEF Election
will be effective and the U.S. Holder will be subject to the QEF rules described above during any subsequent tax year in which
the Company qualifies as a PFIC.

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U.S. Holders should be aware that there
can be no assurances that the Company will satisfy the record keeping requirements that apply to a QEF, or that the Company will
supply U.S. Holders with information that such U.S. Holders are required to report under the QEF rules, in the event that the Company
is a PFIC including a PFIC Annual Information Statement. Thus, U.S. Holders may not be able to make a QEF Election with respect
to their common shares. Each U.S. Holder should consult its own tax advisors regarding the availability of, and procedure for making,
a QEF Election.

A U.S. Holder makes a QEF Election
by attaching a completed IRS Form 8621, including a PFIC Annual Information Statement, to a timely filed United States federal
income tax return. However, if the Company does not provide the required information with regard to the Company or any of its Subsidiary
PFICs, U.S. Holders will not be able to make a QEF Election for such entity and will continue to be subject to the rules of Section
1291 of the Code discussed above that apply to Non-Electing U.S. Holders with respect to the taxation of gains and excess distributions.

Mark-to-Market Election



A U.S. Holder may make a Mark-to-Market
Election only if the common shares are marketable stock. The common shares generally will be “marketable stock” if
the common shares are regularly traded on (a) a national securities exchange that is registered with the Securities and Exchange
Commission, (b) the national market system established pursuant to section 11A of the Securities and Exchange Act of 1934, or (c)
a foreign securities exchange that is regulated or supervised by a governmental authority of the country in which the market is
located, provided that (i) such foreign exchange has trading volume, listing, financial disclosure, and surveillance requirements,
and meets other requirements and the laws of the country in which such foreign exchange is located, together with the rules of
such foreign exchange, ensure that such requirements are actually enforced and (ii) the rules of such foreign exchange effectively
promote active trading of listed stocks. If such stock is traded on such a qualified exchange or other market, such stock generally
will be “regularly traded” for any calendar year during which such stock is traded, other than in de minimis quantities,
on at least 15 days during each calendar quarter. Provided that the common shares are “regularly traded” as described
in the preceding sentence, the common shares are expected to be marketable stock. However, each U.S. Holder should consult its
own tax advisor in this regard.

A U.S. Holder that makes a Mark-to-Market
Election with respect to its common shares generally will not be subject to the rules of Section 1291 of the Code discussed above
with respect to such common shares. However, if a U.S. Holder does not make a Mark-to-Market Election beginning in the first tax
year of such U.S. Holder’s holding period for the common shares for which the Company is a PFIC and such U.S. Holder has
not made a timely QEF Election, the rules of Section 1291 of the Code discussed above will apply to certain dispositions of, and
distributions on, the common shares.

A U.S. Holder that makes a Mark-to-Market
Election will include in ordinary income, for each tax year in which the Company is a PFIC, an amount equal to the excess, if any,
of (a) the fair market value of the common shares, as of the close of such tax year over (b) such U.S. Holder’s adjusted
tax basis in such common shares. A U.S. Holder that makes a Mark-to-Market Election will be allowed a deduction in an amount equal
to the excess, if any, of (a) such U.S. Holder’s adjusted tax basis in the common shares, over (b) the fair market value
of such common shares (but only to the extent of the net amount of previously included income as a result of the Mark-to-Market
Election for prior tax years).

A U.S. Holder that makes a Mark-to-Market
Election generally also will adjust such U.S. Holder’s tax basis in the common shares to reflect the amount included in gross
income or allowed as a deduction because of such Mark-to-Market Election. In addition, upon a sale or other taxable disposition
of common shares, a U.S. Holder that makes a Mark-to-Market Election will recognize ordinary income or ordinary loss (not to exceed
the excess, if any, of (a) the amount included in ordinary income because of such Mark-to-Market Election for prior tax years over
(b) the amount allowed as a deduction because of such Mark-to-Market Election for prior tax years). Losses that exceed this limitation
are subject to the rules generally applicable to losses provided in the Code and Treasury Regulations.

A U.S. Holder makes a Mark-to-Market
Election by attaching a completed IRS Form 8621 to a timely filed United States federal income tax return. A Mark-to-Market Election
applies to the tax year in which such Mark-to-Market Election is made and to each subsequent tax year, unless the common shares
cease to be “marketable stock” or the IRS consents to revocation of such
election. Each U.S. Holder should consult its own tax advisors regarding the availability of, and procedure for making, a Mark-to-Market
Election.

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Although a U.S. Holder may be eligible
to make a Mark-to-Market Election with respect to the common shares, no such election may be made with respect to the stock of
any Subsidiary PFIC that a U.S. Holder is treated as owning, because such stock is not marketable. Hence, the Mark-to-Market Election
will not be effective to avoid the application of the default rules of Section 1291 of the Code described above with respect to
deemed dispositions of Subsidiary PFIC stock or excess distributions from a Subsidiary PFIC to its shareholder.

Other PFIC Rules



Under Section 1291(f) of the Code,
the IRS has issued proposed Treasury Regulations that, subject to certain exceptions, would cause a U.S. Holder that had not made
a timely QEF Election to recognize gain (but not loss) upon certain transfers of common shares that would otherwise be tax-deferred
(e.g., gifts and exchanges pursuant to corporate reorganizations). However, the specific U.S. federal income tax consequences to
a U.S. Holder may vary based on the manner in which common shares are transferred.

Certain additional adverse rules may
apply with respect to a U.S. Holder if the Company is a PFIC, regardless of whether such U.S. Holder makes a QEF Election. For
example, under Section 1298(b)(6) of the Code, a U.S. Holder that uses common shares as security for a loan will, except as may
be provided in Treasury Regulations, be treated as having made a taxable disposition of such common shares.

Special rules also apply to the amount
of foreign tax credit that a U.S. Holder may claim on a distribution from a PFIC. Subject to such special rules, foreign taxes
paid with respect to any distribution in respect of stock in a PFIC are generally eligible for the foreign tax credit. The rules
relating to distributions by a PFIC and their eligibility for the foreign tax credit are complicated, and a U.S. Holder should
consult with its own tax advisors regarding the availability of the foreign tax credit with respect to distributions by a PFIC.

The PFIC rules are complex, and each
U.S. Holder should consult its own tax advisors regarding the PFIC rules and how the PFIC rules may affect the U.S. federal income
tax consequences of the acquisition, ownership, and disposition of common shares.

General Rules Applicable to the Ownership
and Disposition of Common Shares



The following discussion describes
the general rules applicable to the ownership and disposition of the common shares but is subject in its entirety to the special
rules described above under the heading “Passive Foreign Investment Company Rules.”

Distributions on Common Shares



A U.S. Holder that receives a distribution,
including a constructive distribution, with respect to a common share will be required to include the amount of such distribution
in gross income as a dividend (without reduction for any Canadian income tax withheld from such distribution) to the extent of
the current and accumulated “earnings and profits” of the Company, as computed for U.S. federal income tax purposes.
A dividend generally will be taxed to a U.S. Holder at ordinary income tax rates if the Company is a PFIC for the tax year of such
distribution or the preceding tax year. To the extent that a distribution exceeds the current and accumulated “earnings and
profits” of the Company, such distribution will be treated first as a tax-free return of capital to the extent of a U.S.
Holder's tax basis in the common shares and thereafter as gain from the sale or exchange of such common shares. (See “Sale
or Other Taxable Disposition of Common Shares” below). However, the Company may not maintain the calculations of its earnings
and profits in accordance with U.S. federal income tax principles, and each U.S. Holder may have to assume that any distribution
by the Company with respect to the common shares will constitute ordinary dividend income. Dividends received on common shares
by corporate U.S. Holders generally will not be eligible for the “dividends received deduction.” Subject to applicable
limitations and provided the Company is eligible for the benefits of the Canada-U.S. Tax Convention, dividends paid by the Company
to non-corporate U.S. Holders, including individuals, generally will be eligible for the preferential tax rates applicable to long-term
capital gains for dividends, provided certain holding period and other conditions are satisfied,
including that the Company not be classified as a PFIC in the tax year of distribution or in the preceding tax year. The dividend
rules are complex, and each U.S. Holder should consult its own tax advisors regarding the application of such rules.

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Sale or Other Taxable Disposition of Common
Shares



Upon the sale or other taxable disposition
of common shares, a U.S. Holder generally will recognize capital gain or loss in an amount equal to the difference between the
U.S. dollar value of cash received plus the fair market value of any property received and such U.S. Holder's tax basis in such
common shares sold or otherwise disposed of. A U.S. Holder’s tax basis in common shares generally will be such holder’s
U.S. dollar cost for such common shares. Gain or loss recognized on such sale or other disposition generally will be long-term
capital gain or loss if, at the time of the sale or other disposition, the common shares have been held for more than one year.

Preferential tax rates currently apply
to long-term capital gain of a U.S. Holder that is an individual, estate, or trust. There are currently no preferential tax rates
for long-term capital gain of a U.S. Holder that is a corporation. Deductions for capital losses are subject to significant limitations
under the Code.

Additional Considerations



Additional Tax on Passive Income



Certain U.S. Holders that are individuals,
estates or trusts (other than trusts that are exempt from tax) will be subject to a 3.8% tax on all or a portion of their “net
investment income,” which includes dividends on the common shares and net gains from the disposition of the common shares.
Further, excess distributions treated as dividends, gains treated as excess distributions under the PFIC rules discussed above,
and mark-to-market inclusions and deductions are all included in the calculation of net investment income.

Treasury Regulations provide, subject
to the election described in the following paragraph, that solely for purposes of this additional tax, that distributions of previously
taxed income will be treated as dividends and included in net investment income subject to the additional 3.8% tax. Additionally,
to determine the amount of any capital gain from the sale or other taxable disposition of common shares that will be subject to
the additional tax on net investment income, a U.S. Holder who has made a QEF Election will be required to recalculate its basis
in the common shares excluding QEF basis adjustments.

Alternatively, a U.S. Holder may make
an election which will be effective with respect to all interests in controlled foreign corporations and QEFs held in that year
or acquired in future years. Under this election, a U.S. Holder pays the additional 3.8% tax on QEF income inclusions and on gains
calculated after giving effect to related tax basis adjustments. U.S. Holders that are individuals, estates or trusts should consult
their own tax advisors regarding the applicability of this tax to any of their income or gains in respect of the common shares.

Receipt of Foreign Currency



The amount of any distribution paid
to a U.S. Holder in foreign currency, or on the sale, exchange or other taxable disposition of common shares, generally will be
equal to the U.S. dollar value of such foreign currency based on the exchange rate applicable on the date of receipt (regardless
of whether such foreign currency is converted into U.S. dollars at that time). A U.S. Holder will have a basis in the foreign currency
equal to its U.S. dollar value on the date of receipt. Any U.S. Holder who converts or otherwise disposes of the foreign currency
after the date of receipt may have a foreign currency exchange gain or loss that would be treated as ordinary income or loss, and
generally will be U.S. source income or loss for foreign tax credit purposes. Different rules apply to U.S. Holders who use the
accrual method of tax accounting. Each U.S. Holder should consult its own U.S. tax advisors regarding the U.S. federal income tax
consequences of receiving, owning, and disposing of foreign currency.

Foreign Tax Credit



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Subject to the PFIC rules discussed
above, a U.S. Holder that pays (whether directly or through withholding) Canadian income tax with respect to dividends paid on
the common shares generally will be entitled, at the election of such U.S. Holder, to receive either a deduction or a credit for
such Canadian income tax. Generally, a credit will reduce a U.S. Holder’s U.S. federal income tax liability on a dollar-for-dollar
basis, whereas a deduction will reduce a U.S. Holder’s income that is subject to U.S. federal income tax. This election is
made on a year-by-year basis and applies to all foreign taxes paid (whether directly or through withholding) by a U.S. Holder during
a year.

Complex limitations apply to the foreign
tax credit, including the general limitation that the credit cannot exceed the proportionate share of a U.S. Holder’s U.S.
federal income tax liability that such U.S. Holder’s “foreign source” taxable income bears to such U.S. Holder’s
worldwide taxable income. In applying this limitation, a U.S. Holder’s various items of income and deduction must be classified,
under complex rules, as either “foreign source” or “U.S. source.” Generally, dividends paid by a foreign
corporation should be treated as foreign source for this purpose, and gains recognized on the sale of stock of a foreign corporation
by a U.S. Holder should be treated as U.S. source for this purpose, except as otherwise provided in an applicable income tax treaty,
and if an election is properly made under the Code. However, the amount of a distribution with respect to the common shares that
is treated as a “dividend” may be lower for U.S. federal income tax purposes than it is for Canadian federal income
tax purposes, resulting in a reduced foreign tax credit allowance to a U.S. Holder. In addition, this limitation is calculated
separately with respect to specific categories of income. The foreign tax credit rules are complex, and each U.S. Holder should
consult its own U.S. tax advisors regarding the foreign tax credit rules.

Backup Withholding and Information Reporting



Under U.S. federal income tax law,
certain categories of U.S. Holders must file information returns with respect to their investment in, or involvement in, a foreign
corporation. For example, U.S. return disclosure obligations (and related penalties) are imposed on individuals who are U.S. Holders
that hold certain specified foreign financial assets in excess of certain thresholds. The definition of specified foreign financial
assets includes not only financial accounts maintained in foreign financial institutions, but also, unless held in accounts maintained
by a financial institution, any stock or security issued by a non-U.S. person, any financial instrument or contract held for investment
that has an issuer or counterparty other than a U.S. person and any interest in a foreign entity. U.S. Holders may be subject to
these reporting requirements unless their common shares are held in an account at certain financial institutions. Penalties for
failure to file certain of these information returns are substantial. U.S. Holders should consult with their own tax advisors regarding
the requirements of filing information returns, including the requirement to file an IRS Form 8938.

Payments made within the U.S., or by
a U.S. payer or U.S. middleman, of dividends on, and proceeds arising from the sale or other taxable disposition of, common shares
will generally be subject to information reporting and backup withholding tax, at the rate of 24%, if a U.S. Holder (a) fails to
furnish such U.S. Holder’s correct U.S. taxpayer identification number (generally on Form W-9), (b) furnishes an incorrect
U.S. taxpayer identification number, (c) is notified by the IRS that such U.S. Holder has previously failed to properly report
items subject to backup withholding tax, or (d) fails to certify, under penalty of perjury, that such U.S. Holder has furnished
its correct U.S. taxpayer identification number and that the IRS has not notified such U.S. Holder that it is subject to backup
withholding tax. However, certain exempt persons generally are excluded from these information reporting and backup withholding
rules. Backup withholding is not an additional tax. Any amounts withheld under the U.S. backup withholding tax rules will be allowed
as a credit against a U.S. Holder’s U.S. federal income tax liability, if any, or will be refunded, if such U.S. Holder furnishes
required information to the IRS in a timely manner.

The
discussion of reporting requirements set forth above is not intended to constitute a complete description of all reporting requirements
that may apply to a U.S. Holder. A failure to satisfy certain reporting requirements may result in an extension of the time period
during which the IRS can assess a tax and, under certain circumstances, such an extension may apply to assessments of amounts unrelated
to any unsatisfied reporting requirement. Each U.S. Holder should consult its own tax advisors regarding the information reporting
and backup withholding rules.

THE ABOVE SUMMARY IS NOT INTENDED TO CONSTITUTE
A COMPLETE ANALYSIS OF ALL TAX CONSIDERATIONS APPLICABLE TO U.S. HOLDERS WITH RESPECT TO THE ACQUISITION, OWNERSHIP, AND DISPOSITION
OF COMMON SHARES. U.S. HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS AS TO THE TAX CONSIDERATIONS APPLICABLE
TO THEM IN THEIR OWN PARTICULAR CIRCUMSTANCES.



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F.            Dividends and paying agents.



Not applicable – The Company is filing
this Form 20-F/A as an annual report.



G.           	Statement by experts.



Not applicable – The Company is filing
this form 20-F/A as an annual report.



H.	           Documents on display.



We will furnish our shareholders with annual
reports, which will include a review of operations and annual audited consolidated financial statements prepared in conformity
with U.S. GAAP. We intend, although we are not obligated to do so, to furnish when requested by our shareholders quarterly reports
by mail with the assistance of a corporate services provider, which will include unaudited interim financial information prepared
in conformity with U.S. GAAP for each of the three quarters of each fiscal year following the end of each such quarter. We may
discontinue providing quarterly reports at any time without prior notice to our shareholders. For additional information on the
Company, please consult our website at www.nxtenergy.com, or the SEDAR website at http://sedar.com.



Our reports and other information, including
this annual report and the exhibits hereto, as filed with the SEC in accordance with the Exchange Act, may be inspected and copied
at the public reference facilities maintained by the SEC at 100 F Street, Washington, D.C. 20549. In addition, copies of such reports
and other information filed with the SEC can be obtained from www.sec.gov.



ITEM
11.     QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As at December 31, 2017 and to date
in 2018, we do not have any interest bearing debt facilities or any forward / futures hedging contracts in place to manage risks
related to foreign currency or interest rate fluctuations.

Currency Fluctuations

We currently hold our cash in both Canadian
and United States of America currency, as we generally bill revenues in U.S. currency, and periodically hold certain short-term
monetary assets and liabilities in other foreign currencies. Any transaction in a currency other than the Canadian dollar exposes
us to the impact of exchange rate fluctuations between the Canadian and the foreign currencies. We do not currently engage in hedging
activities to mitigate the effects of foreign currency fluctuation, and are reviewing opportunities to do so.



At December 31, 2017 we held U.S $ cash and
short term investments totaling US$1,598. Accordingly, a hypothetical 10% change in the value of one U.S. $ expressed in Canadian
dollars as at December 31, 2017 would have had a $160 effect on the unrealized foreign exchange gain or loss for the year.



Interest Fluctuations

At December 31, 2016 we held a total of $1,116,618
in cash, cash equivalents and short term investments. If all this cash was held in an interest bearing account for a full year,
an actual 1% change in interest rates during the year ended December 31, 2017 would have resulted in approximately an $11,166 change
in interest income for the year.



ITEM
12.     DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

Not applicable.



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PART II



ITEM
13.     DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES



There have not been any defaults, dividend
arrears or delinquencies.



ITEM 14.
    MATERIAL
MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS



There have been no material modifications
to the rights of security holders except as outlined in Item 4.B “Summary information on dependence on patents, licenses
and contracts” within this Form 20-F/A.



ITEM 15.
    CONTROLS
AND PROCEDURES



We maintain a set of disclosure controls and
procedures (“DCP”) designed to ensure that information required to be disclosed by the Company in reports that it files
or submits under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in SEC rules
and forms. Disclosure controls and procedures include controls and procedures designed to ensure that information required to be
disclosed in our reports is accumulated and communicated to management, to allow timely decisions regarding required disclosure.



The Company's Chief Executive Officer (“CEO”)
and Chief Financial Officer (“CFO”, together the "Responsible Officers") are responsible for establishing
and maintaining DCP, or causing them to be designed under their supervision, for NXT to provide reasonable assurance that material
information relating to the Company is made known to the Responsible Officers by others within the organization, particularly during
the period in which the Company's quarterly and year-end financial statements, Form 20-F and Canadian MD&A are being prepared.



As of December 31, 2017 we carried
out an evaluation, under the supervision and with the participation of our management, including our Responsible Officers, of the
effectiveness of the design and operation of the Company’s DCP as defined under the rules adopted by the Canadian securities
regulatory authorities and in Rule 13a-15(e) of the Exchange Act. The evaluation concluded that there are material weaknesses in
the Company’s ICFR that have a direct impact on the Company’s DCP as discussed in more detail below.

Our management, under the supervision of the
Responsible Officers, is also responsible for establishing and maintaining adequate internal control over financial reporting (“ICFR”)
as defined in Rule 13a-15(f) of the Exchange Act. Our internal control system was designed to provide reasonable assurance regarding
the reliability of financial reporting and the preparation and fair presentation of our consolidated financial statements for external
purposes in accordance with generally accepted accounting principles. Our Responsible Officers assessed the effectiveness of our
ICFR as of December 31, 2017. In making this assessment, they used the criteria established in Internal Control – Integrated
Framework 2013, issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).



Our ICFR were not required to be independently
audited. Accordingly, no independent audit was performed over the effectiveness of internal controls as at December 31, 2017 and
this annual report does not include an attestation report of the Company’s registered public accounting firm regarding ICFR.
Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to rules
of the SEC that permit the Company to provide only management’s report in this annual report.



During this process, we identified the following
material weaknesses in the Company’s ICFR that have a direct impact on the Company’s DCP:



| | · | Due to the limited number of staff, it
is not feasible to achieve adequate segregation of incompatible duties. NXT mitigates this deficiency by adding management and
Audit Committee review procedures over the areas where inadequate segregation of duties are of the greatest concern, and
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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| | · | NXT does not have a sufficient level
of staff with specialized expertise to adequately conduct separate preparation and a subsequent independent review of certain complex
or highly judgmental accounting issues. These complex areas have historically included accounting for income taxes and equity related
transactions. NXT mitigates this deficiency by preparing financial statements with their best judgments and estimates of the complex
accounting matters and relies on reviews by management, external consultants and the Audit Committee for quality assurance.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

From time to time to reduce these
risks and to supplement a small corporate finance function, the Company engages various outside experts and advisors to
assist with various accounting, controls and tax issues in the normal course. In addition the Company has retained a full
time controller to assist in these matters.

Notwithstanding NXT’s efforts
to mitigate the risks associated with the above-mentioned deficiencies, the CEO and CFO concluded that the Company's ICFR are not
effective and as a result its DCP are not effective as at December 31, 2017. NXT reached this conclusion based upon their assessment
that there is more than a remote likelihood that its ICFR will not prevent or detect material misstatements if they should exist
in our consolidated financial statements. NXT has therefore further taken on a process of continuous improvement in financial reporting and disclosure policies and responsibilities from which we expect to see benefits over the course of 2018.

It should be noted that a control system,
including the Company’s DCP and ICFR procedures, no matter how well conceived, can provide only reasonable, but not absolute
assurance that the objectives of the control system will be met and it should not be expected that the DCP and ICFR will prevent
all errors or fraud.



Changes in Internal Controls







During the 3 month period ended December 31,
2017, a majority of the Company’s finance team, including its CFO and Accounting Analyst, left the Company.  Prior
to the departure of the Company’s previous CFO at the end of November 2017, NXT contracted a part-time Controller starting
on November 27, 2017, who is now engaged on a full-time basis, to assist in the transition of finance and disclosure responsibilities
for the Company.  During December 2017 and January 2018, one of the Company’s board members took the role of interim
CFO until the Company’s current CFO took office on February 1, 2018.  The
transition to new financial management and limited overlap between personnel have resulted control deficiencies in maintaining
DC&P and ICFR that have led to a recurrence of previously identified deficient disclosure and requirement for refiling of certain
disclosure documents.  To address this issue and improve ICFR moving forward, management has established a practice of
increased engagement of the Company’s Disclosure and Audit Committees in reviewing the public disclosure and has increased
engagement of external consultants and legal counsel as well.



There were no other changes in our internal control over financial reporting that materially affected, or are reasonably likely to materially
affect, our internal control over financial reporting  during the period ended December 31, 2017.



ITEM
16A.  AUDIT COMMITTEE FINANCIAL EXPERT

Our Board of Directors has determined that
we have at least one audit committee “financial expert” (as defined under Item 16.A of Form 20-F) serving on our Audit
Committee. The Audit Committee consists of Messrs. Wilcox (Chair), Selby and Tilson. Each member of the NXT Audit Committee has
relevant experience in understanding and evaluating financial information, generally accepted accounting principles, control systems,
and audit committee functions. Each member of NXT’s Audit Committee is considered a financial expert, and each is an “independent”
director, as that term is defined under the listing standards of NASDAQ.





ITEM
16B.   CODE OF ETHICS

NXT has in place a Code of Conduct & Business
Ethics (the “Code of Conduct”) that applies to all of our directors, officers, employees, and consultants. This Code
of Conduct is incorporated in our Employee Handbook, is an integral part of our employee contracts and our Employee Handbook, and
contains Company policies on Business Ethics, Employee Practices and Conflicts of Interest.



During 2017, the Company did not significantly
amend its Code of Conduct or grant any waiver, including any implicit waiver, from any provision of the Code of Conduct to any
of its directors, officers or employees. Copies of NXT’s Code of Conduct are available without charge to any person upon
request from NXT’s Chief Financial Officer at nxt_info@nxtenergy.com or at NXT’s headquarters at Suite 302, 3320 –
17th Avenue SW, Calgary Alberta, Canada, T3E 0B4, and on the Company website.



ITEM
16C.   PRINCIPAL ACCOUNTANT FEES AND SERVICES



The following table sets forth the aggregate
audit fees, audit-related fees, tax fees of our principal accountants and all other fees billed for products and services provided
by our principal accountants for each of the fiscal years ended December 31, 2017 and 2016.



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|                                     | 2017     | 2016     
|------------------------------------ | -------- | ---------
|Audit fees                           | $143,420 | $ 125,250
|Audit related fees – Colombia branch | -        | 8,910    
|Audit related fees – Bolivian branch | 9,800    | 9,509    
|                                     | 153,220  | 143,669  
|Tax fees                             | -        | -        
|Other Audit Related Fees             | 16,720   | 17,500   
|Total fees                           | 169,940  | 161,169  









Audit
Committee’s Pre-approval Policies and Procedures

Our Audit Committee nominates and engages
our independent auditors to audit our financial statements. Our Audit Committee also requires management to obtain the Audit Committee’s
approval on a case-by-case basis before engaging our independent auditors to provide any audit or permitted non-audit services
to the Company or any of our subsidiaries. All fees shown have been pre-approved by the Audit Committee.

ITEM
16D.  EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES



Not applicable.

ITEM
16E.   PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS

The Company did not directly, or through
an affiliate purchaser, purchase shares or other units of any class of the issuer’s equity securities that is registered
by the issuer pursuant to section 12 of the Exchange Act (15 U.S.C. 781).

ITEM
16F.   CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT

Not applicable.

ITEM
16G.  CORPORATE GOVERNANCE

Not applicable.

ITEM
16H.  MINE SAFETY DISCLOSURE

Not applicable.



PART III



ITEM 17.
   FINANCIAL STATEMENTS



The Company’s consolidated financial
statements and related notes are prepared in accordance with U.S. generally accepted accounting principles and included in Item
8 to this annual report.



ITEM 18.
FINANCIAL STATEMENTS



Not applicable as the Company has filed its
consolidated financial statements and related notes in accordance with U.S. generally accepted accounting principles.

6920-F/A for the year ended December 31, 2017


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ITEM 19.
    EXHIBITS



EXHIBIT INDEX

|Exhibit No. | Description                                                                                                                                                                                                                                                                                                              
|----------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1.1         | Articles of Incorporation of Auric Mining Corporation as filed with the Nevada Secretary of State on September 27, 1994 (incorporated by reference to Exhibit 3.1 to the Registration Statement on Form 10 filed on June 29, 1998)                                                                                       
|1.2         | Amendment to Articles of Incorporation of Auric Mining Corporation as filed with the Nevada Secretary of State on February 23, 1996 (incorporated by reference to Exhibit 3.1 to the Registration Statement on Form 10 filed on June 29, 1998)                                                                           
|1.3         | Certificate of Amendment to Articles of Incorporation of Pinnacle Oil International, Inc. as filed with the Nevada Secretary of State on April 1, 1998 (incorporated by reference to Exhibit 3.3 to the Registration Statement on Form 10 filed on June 29, 1998)                                                        
|1.4         | Certificate of Amendment to Articles of Incorporation of Pinnacle Oil International, Inc. as filed with the Nevada Secretary of State on June 13, 2000 (incorporated by reference to Exhibit 3.4 to our Amendment No. 1 to the Annual Report on Form 10-K for the year ended December 31, 1999 as filed on July 28, 2000)
|1.5         | Articles of Amendment of Energy Exploration Technologies Inc. as filed with the province of Alberta, Canada on September 22, 2008 (incorporated by reference to Exhibit 1.8 to our Annual Report on Form 20-F for the year ended December 31, 2008 as filed on June 29, 2009)                                            
|1.6         | Amendment to the Articles of NXT Energy Solutions Inc. (incorporated by reference to Item V of Exhibit 99.1 to Form 6-K as filed on September 20, 2013)                                                                                                                                                                  
|1.7         | NXT Energy Solutions Inc. By-Law No. 1 (incorporated by reference to Schedule “D” to Exhibit 99.2 to Form 6-K as filed on September 20, 2013)                                                                                                                                                                            
|4.1         | Form of Indemnification Agreement between NXT Energy Solutions Inc. and each of its Directors and Executive Officers (incorporated by reference to Exhibit 4.6 to our Annual Report on Form 20-F for the year ended December 31, 2013 as filed on April 30, 2014)                                                        
|4.2         | SFD® Technology Ownership Agreement dated December 31, 2006 (incorporated by reference to Exhibit 99.4 to Form 6-K as filed on January 12, 2007)                                                                                                                                                                         
|4.3         | Technology Transfer Agreement dated December 31, 2006 (incorporated by reference to Exhibit 99.6 to Form 6-K as filed on January 12, 2007)                                                                                                                                                                               
|8.1         | List of Subsidiaries (incorporated by reference to Exhibit 8.1 to our Annual Report on Form 20-F for the year ended December 31, 2013 as filed on April 30, 2014)                                                                                                                                                        
|11.1        | Code of Conduct and Business Ethics (incorporated by reference to Exhibit 11.1 to our Annual Report on Form 20-F for the year ended December 31, 2013 as filed on April 30, 2014)                                                                                                                                        
|12.1        | Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer and President                                                                                                                                                                                                                                          
|12.2        | Rule 13a-14(a)/15d-14(a) Certification of VP Finance and Chief Financial Officer                                                                                                                                                                                                                                         
|13.1        | Section 1350 Certification of Chief Executive Officer and President                                                                                                                                                                                                                                                      
|13.2        | Section 1350 Certification of VP Finance and Chief Financial Officer                                                                                                                                                                                                                                                     
|15.1        | Consolidated Financial Statements and Audit report of KPMG LLP for the year ended December 31, 2017                                                                                                                                                                                                                      
|15.2        | Consent of KPMG LLP                                                                                                                                                                                                                                                                                                      
|15.3        | Amended and Restated Management’s Discussion and Analysis for the year ended December 31, 2017                                                                                                                                                                                                                           





7020-F/A for the year ended December 31, 2017


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SIGNATURES

The registrant hereby certifies that
it meets all of the requirements for filing on Form 20-F/A and that it has duly caused and authorized the undersigned to sign this
annual report on its behalf.

NXT Energy Solutions Inc.



By: /s/ George Liszicasz

George Liszicasz

Director, Chairman,
Chief Executive Officer and President



Dated: June 7, 2018



7120-F/A for the year ended December 31, 2017


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Exhibit 12.1

CERTIFICATION

I, George Liszicasz, certify that:

1.	I have reviewed this annual
report on Form 20-F/A of NXT Energy Solutions Inc.;

2.	Based on my knowledge, this
report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by
this report;

3.	Based on my knowledge, the financial
statements, and other financial information included in this report, fairly present in all material respects the financial condition,
results of operations and cash flows of the Company as of, and for, the periods presented in this report;

4.
The Company’s other certifying
officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))
for the Company and have:

(a)	Designed such disclosure controls
and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material
information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities,
particularly during the period in which this report is being prepared;

(b)	Designed such internal control
over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness
of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness
of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)
Disclosed in this report any
change in the Company’s internal control over financial reporting that occurred during the period covered by the annual report
that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial
reporting; and

5.
The Company’s other certifying
officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s
auditors and the audit committee of the Company’s Board of directors (or persons performing the equivalent functions):

(a)
All significant deficiencies
and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to
adversely affect the Company’s ability to record, process, summarize and report financial information; and

(b)
Any fraud, whether or not material,
that involves management or other employees who have a significant role in the Company’s internal control over financial
reporting.

Dated:June 7, 2018

/s/ George Liszicasz

George Liszicasz

Chief Executive Officer and President



7220-F/A for the year ended December 31, 2017


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Exhibit 12.2



CERTIFICATION



I, Jakub Brogowski, certify that:

1.	I have reviewed this annual
report on Form 20-F/A of NXT Energy Solutions Inc.;

2.	Based on my knowledge, this
report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by
this report;

3.	Based on my knowledge, the financial
statements, and other financial information included in this report, fairly present in all material respects the financial condition,
results of operations and cash flows of the Company as of, and for, the periods presented in this report;

4.
The Company’s other certifying
officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))
for the Company and have:

(a)	Designed such disclosure controls
and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material
information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities,
particularly during the period in which this report is being prepared;

(b)	Designed such internal control
over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles;

(c)
Evaluated the effectiveness
of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness
of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)
Disclosed in this report any
change in the Company’s internal control over financial reporting that occurred during the period covered by the annual report
that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial
reporting; and

5.
The Company’s other certifying
officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s
auditors and the audit committee of the Company’s Board of directors (or persons performing the equivalent functions):

(a)
All significant deficiencies
and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to
adversely affect the Company’s ability to record, process, summarize and report financial information; and

(b)
Any fraud, whether or not material,
that involves management or other employees who have a significant role in the Company’s internal control over financial
reporting.

Dated:June 7, 2018

/s/ Jakub Brogowski

Jakub Brogowski

VP Finance and Chief Financial Officer



7320-F/A for the year ended December 31, 2017


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Exhibit 13.1

Certification
Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002

Pursuant to Section
906 of the Sarbanes-Oxley Act of 2002 (Chapter 63, Title 18 U.S.C. §§ 1350(a) and (b)), the undersigned hereby certifies
in his capacity as an officer of NXT Energy Solutions Inc. (the “Company”) that the Annual Report of the Company on
Form 20-F/A for the year ended December 31, 2017 fully complies with the requirements of Section 13(a) or 15(d) of the Securities
Exchange Act of 1934, as amended, and that the information contained in such Report fairly presents, in all material respects,
the financial condition and results of operations of the Company.

Dated: June 7, 2018



/s/ George Liszicasz

George Liszicasz

Chief Executive Officer and President



A SIGNED ORIGINAL
OF THIS WRITTEN STATEMENT REQUIRED BY SECTION 906 HAS BEEN PROVIDED TO NXT ENERGY SOLUTIONS INC. AND WILL BE RETAINED BY NXT ENERGY
SOLUTIONS INC. AND FURNISHED TO THE SECURITIES AND EXCHANGE COMMISSION OR ITS STAFF UPON REQUEST.



7420-F/A for the year ended December 31, 2017


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Exhibit 13.2



Certification
Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002

Pursuant to Section
906 of the Sarbanes-Oxley Act of 2002 (Chapter 63, Title 18 U.S.C. §§ 1350(a) and (b)), the undersigned hereby certifies
in his capacity as an officer of NXT Energy Solutions Inc. (the “Company”) that the Annual Report of the Company on
Form 20-F/A for the year ended December 31, 2017 fully complies with the requirements of Section 13(a) or 15(d) of the Securities
Exchange Act of 1934, as amended, and that the information contained in such Report fairly presents, in all material respects,
the financial condition and results of operations of the Company.

Dated: June 7, 2018





/s/ Jakub Brogowski

Jakub Brogowski

VP Finance and Chief Financial Officer



A SIGNED ORIGINAL
OF THIS WRITTEN STATEMENT REQUIRED BY SECTION 906 HAS BEEN PROVIDED TO NXT ENERGY SOLUTIONS INC. AND WILL BE RETAINED BY NXT ENERGY
SOLUTIONS INC. AND FURNISHED TO THE SECURITIES AND EXCHANGE COMMISSION OR ITS STAFF UPON REQUEST.

7520-F/A for the year ended December 31, 2017


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KPMG LLP 205
5th Avenue SW Suite
3100 Calgary
AB T2P 4B9 Tel
(403) 691-8000 Fax
(403) 691-8008 www.kpmg.ca    CONSENT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM   The
Board of Directors NXT
Energy Solutions Inc.  We consent to the incorporation by reference in the registration statements (No. 333-89251, 333-108465, 333-129803 and 333-146890) on Form S-8 of NXT Energy Solutions Inc. of our report dated April 30, 2018, with respect to the consolidated balance sheets of NXT Energy Solutions Inc. as of December 31, 2017 and 2016 and the related consolidated statements of income (loss) and comprehensive income (loss), shareholders' equity and cash flows for each of the years in the three-year period ended December 31, 2017, and notes, comprising a summary of significant accounting policies and explanatory information, which report appears in the December 31, 2017 annual report on Form 20-F/A (Amendment No.1) of NXT Energy Solutions Inc.  Chartered Professional AccountantsCalgary, CanadaJune 7, 2018  KPMG LLP is a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. KPMG Canada provides services to KPMG
LLP.


7620-F/A for the year ended December 31, 2017


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