PART I

ITEM 1.

IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

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

ITEM 2.

OFFER STATISTICS AND EXPECTED TIMETABLE

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

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 and Prospects” and our audited consolidated financial statements and related notes, which are in-

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cluded elsewhere in this document.  The consolidated statements of income data for each of the three years ended December 31, 2006, 2007 and 2008 and selected consolidated balance sheet data as of December 31, 2007 and 2008 are derived from, and qualified by reference to, our audited consolidated financial statements included elsewhere in this document.  The consolidated statements of income data for each of the years ended December 31, 2004 and 2005 and selected consolidated balance sheet data as of December 31, 2004, 2005 and 2006, are derived from our United States dollar audited financial statements not included in this document that have been converted into Canadian dollars.

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

B.

Capitalized and indebtedness

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

C.

Reasons for the offer and use of proceeds

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

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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 commercializing our SFD® survey technology following a long history of generating losses.  As at December 31, 2008 our deficit was $52,703,170 consisting of net losses of $47,638,207 incurred prior to fiscal 2006, net losses of $4,274,103 and $1,141,291 incurred respectively in fiscal 2006 and 2008 and net income of $350,431 in fiscal 2007.  The losses incurred prior to 2006 related to the development and industry validation of our SFD® technology.  During this period we derived no direct revenue from our SFD® technology.  In 2006 we commenced offering our SFD® survey services to third parties on a fee-for-service basis.  In the three year period following the end of 2005 in aggregate we earned SFD® survey revenue of $9,759,586 and generated cash from operating activities of $913,150.

The company’s ability to generate cash flow from operations will depend on its ability to service its existing clients and develop new clients for its services. Management recognizes that this early commercialization phase can last for several years. Consistent with this early stage of commercialization the company has a significant economic dependency on a few clients. While the company is in this early stage of commercialization, the company’s financial position is materially impacted by the loss or gain of any one client.  The company's ability to continue operations is dependent on attracting future clients through demonstrating the value that the company can bring to their exploration activities.

On April 13, 2009 the company executed a contract with a Colombian subsidiary of a Canadian oil and gas company to conduct a U.S. $2,300,000 SFD® survey in Colombia. The survey commenced in the second quarter of 2009.

Until we can demonstrate our ability to service existing clients and develop new clients for our SFD® services over a longer period of time, we cannot be certain that we are in a position to continue operating indefinitely.  The company’s ability to continue as a going concern is discussed within Note 1 of the consolidated financial statements included within this Form 20-F.

Our revenue and future business opportunities may be negatively impacted should our clients be unable to raise the required capital to conduct exploration activites.

Our client’s inability to raise capital can adversely affect our ability to earn revenue and generate cash from operating activities.  

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 include allowances for doubtful accounts, valuation of the convertible debentures, estimated useful lives of assets, provisions for contingent liabilities, measurement of stock-based compensation, valuation of future tax assets, determination of proved reserves, valuation of undeveloped land, valuation of preferred shares including the likelihood that the conversion feature of the preferred shares will be achieved.  

The estimates and assumptions 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, assets or liabilities.

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We engage in transactions with related parties.  

We have related party transactions between NXT and its officers and directors.  The most significant transaction was the Technical Transfer Agreement executed on December 31, 2006 between NXT and Mr. Liszicasz, our CEO, president and director, wherein NXT issued 10,000,000 preferred shares in exchange for the acquisition of the SFD® technology.  

NXT manages this conflict of interest risk through maintenance of a strong independent board of directors.  Five of the six directors are independent, as that term is defined in Canadian National Instrument 58-101.  All transactions between NXT and its officers or directors are negotiated on behalf of NXT and voted upon by disinterested directors to protect the best interest of shareholders.

All related party transactions have the potential for conflicts of interest that may undermine the board's fiduciary responsibility to NXT shareholders.    

Our revenue and future business opportunities are impacted by oil and gas price fluctuations.

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

Our financial position is impacted by currency fluctuations.

We currently hold our cash in Canadian as well as in U.S. dollars and we can earn revenues in U.S. dollars and other foreign currencies.  Our reporting currency is in Canadian dollars.  We do not engage in currency hedging activities.  These cash positions and potential foreign currency revenue streams can expose us to exchange rate fluctuations between the Canadian and foreign currencies.  See Item 11 of this Form 20-F.

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

We currently maintain some of our available cash in short term investments that generate interest income that can be adversely affected by any material changes in interest rates. See Item 11 of this Form 20-F.

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

Since the sale of our aircraft in 2003, NXT has relied upon the availability of aircraft from charter operators.  Charter operators provide the required aircraft for SFD® survey operations on an as-required basis for an hourly charter fee.  NXT is not required to make a capital investment in a chartered aircraft.  The only potential prepayment is the purchase of blocks of aircraft time, other advance payments and/or the cost paid by NXT for specific modifications to the chartered aircraft to meet our survey requirements.

On May 8, 2009 we entered into a charter agreement with Air Partners Corp., a Calgary Alberta based international aircraft charter operator, to supply aircraft services for our survey requirements for a minimum period of one year.  

Although various charter operators have provided aircraft charter services since the disposal of our aircraft in 2003 there is a risk that a suitable aircraft may not be available for a charter operator at some future date.  Should the company be unable to acquire an aircraft that is suitable from a charter operator, then NXT would be required to acquire an aircraft.  A suitable used aircraft is expected to cost approximately U.S. $4,000,000 and the company anticipates that 75% financing may be available to make the aircraft purchase.  The time period to acquire an aircraft and then obtain required regulatory approval to conduct the first survey flight may take several months.   

Should we be unable to receive aircraft services from a suitable charter operator in the future and we are unable to acquire an alternative suitable aircraft in a timely fashion we would be unable to conduct SFD® surveys for clients.  

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We are a small business with limited personnel and therefore we have an inherent internal control weakness related to our inability to affect proper segregation of duties between administrative staff.

Certain duties that are most appropriately segregated between different employees are, due to our limited staff, assigned to one individual.  However, we believe our controls are reasonable given our limited staff resources.  

Standard internal control methodology involves the separation of incompatible functions by assigning these functions to separate individuals, and in larger organizations, to separate departments.  In the company often these incompatible functions cannot be allocated to separate individuals because of our small administrative staff.  

The company has adopted alternative control methods designed to compensate for the reduced ability to separate incompatible functions.  For example, as a compensating control, the accountant does not have signing authority on the bank accounts and the accountant’s activities are actively supervised by our Chief Financial Officer.  If these alternative controls fail then this lack of separation of duties exposes the company to misappropriation of funds, embezzlement and other forms of fraud and could have a material adverse effect on the company's business, financial condition and results of operations.  

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

Our right to the SFD® technology depends on our CEO and director, Mr. Liszicasz, having a lawful right to sell to us the exclusive right to exploit the SFD® technology for the exploration of hydrocarbons as agreed to in the Technical Transfer Agreement (“TTA”). (For a full history of the technology transfer see Item 4.A Information on the Company - History and development of the company - History of Technology Agreements included within this Form 20-F.)

Our rights to use our SFD® technology initially arose from an agreement we entered into with Mr. Liszicasz on January 1, 1996.  Mr. Liszicasz is the inventor of the technology.  Mr. Liszicasz subsequently assigned his rights to this agreement to Momentum Resources Corporation (“Momentum”), a Corporation registered in Nassau, Bahamas on June 18, 1996 pursuant to a partnership agreement that Mr. Liszicasz had entered into with a third party partner on September 1, 1995 (the “Partnership Agreement”). Mr. Liszicasz owned 50% of Momentum and a 50% interest in the partnership (the “Partnership”).

Pursuant to this Partnership Agreement, Mr. Liszicasz transferred to the Partnership the original SFD® sensor device as enhanced to the date of transfer and Mr. Liszicasz provided his know-how to locate hydrocarbons using the SFD® detector.  On June 18, 1996 the Partnership transferred this interest in the SFD® technology to Momentum.  

All subsequent SFD® development was undertaken and financed directly by NXT in conjunction with Mr. Liszicasz.

We retained a Canadian national law firm to evaluate the ownership of SFD® theories, equipment and know-how based upon documentary evidence including various agreements entered into by Mr. Liszicasz, the Partnership, Momentum and NXT.  In a letter dated August 18, 2004, the law firm interpreted the agreements to have the following legal effect:

1.

Momentum owns the original SFD® sensor that was transferred to Momentum pursuant to the Partnership Agreement on September 1, 1995.

2.

The Partnership Agreement does not result in the transfer of “know-how” or the SFD® Theories from Mr. Liszicasz to the Partnership.  “Know-how” is a personal skill and knowledge of Mr. Liszicasz that cannot be transferred.

3.

Mr. Liszicasz retains intellectual rights associated with his SFD® Theories including any rights to his “know-how”.

4.

NXT owns any SFD® sensors developed by NXT.

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On December 31, 2006 we executed the TTA with Mr. Liszicasz whereby Mr. Liszicasz transferred all his rights to the SFD® technology for the purpose of hydrocarbon exploration to the company.

A risk does exist that the former partner of Mr. Liszicasz in the Partnership or some other unknown party may claim some legal entitlement to Mr. Liszicasz’ intellectual property, NXT’s rights to commercialize this intellectual property or NXT’s right to create SFD® devices and processes.  However, we believe that such a claim would be without merit.

To mitigate the risk of an entitlement claim for our technology from a third party, the company entered into a settlement agreement with the former business partner of Mr. Liszicasz.  On August 15, 2008 a settlement was reached between the company and the former partner wherein we paid $90,000 and the former partner provided us with a complete release to any claim against NXT, its directors or officers, or any claim of an interest in the SFD® technology.  

The SFD® technology is an essential component of our business plan.  If a third party challenged our lawful entitlement to this technology we would vigorously defend our rights.  The legal defense of our right to the technology may be expensive.  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 a limited number of SFD® sensors and this limitation may affect our ability to conduct business.

We have a limited number of SFD® sensors.  We are manufacturing additional sensors and have been successful in manufacturing several new sensors in the last 12 months.  We survey with an array of 14 sensors and we currently possess sufficient sensors to create at least 2 sensor arrays.  The company would be at risk if these existing sensors are damaged, destroyed, wear out, are stolen or in any way made unavailiable for operations prior to us creating and testing additional sensors.  Should we lose these sensors our ability to conduct surveys will be delayed for several months as we build new sensors and in this period we may default on a contractual obligation.  A default may jepordize future revenue opportunities and may potentially result in a client drawing on a performance bond posted or otherwise making claims agains the company for breach of contract.

We rely on equipment for data acquisition and signal conditioning of the SFD® signal and should this equipment be damaged, destroyed or in any other way not be available for our operations then we will be unable to conduct surveys and meet contractual obligations.  

We have mitigated this risk in 2008 through the creation of a redundant set of equipment for data acquisition and signal conditioning of the SFD® signals.  However, if equipment necessary to conduct surveys became unavailable, there is a risk that our ability to conduct surveys will be delayed for several months and we may become in default of a contractual obligation A default may jepordize future revenue opportunities and may potentially result in a client drawing on a performance bond posted or otherwise making claims agains the company for breach of contract.

We require ongoing technology development, otherwise we may not be able 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.  The company’s inability to keep pace with new technologies and evolving industry standards and demands could have a material adverse effect on the company's business, financial condition and results of operations.

We are dependent on key personnel; the loss of any of these key persons will impact our ability to conduct business.

The company's future success depends to a significant extent on the continued service of its key technical and management personnel and on its ability to continue to attract and retain qualified employees.  The loss of the services of the company's employees or the company's failure to attract, retain and motivate qualified personnel could have a

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material adverse effect on the company's business, financial condition and results of operations. We do not have “key man” insurance on any of our personnel.

The company has employment agreements with all of its executive officers, including George Liszicasz, its president and Chief Executive Officer.  

We have a strong dependence on Mr. Liszicasz to interpret the SFD® data and to enhance our technology.  Mr. Liszicasz is currently training a team of interpreters in order for the company to become less reliant on him to perform these functions.  Within the last year five persons have become trained to interpret SFD® signals, however currently none are trained to the skill level equivalent of Mr. Liszicasz.  In addition, Mr. Liszicasz is working with senior individuals with doctorates in mathematics and physics, both in-house personnel and academics to further study and develop the technology.  If Mr. Liszicasz is unable to reduce the company’s dependence on him and he becomes incapable of performing these functions, this may adversely affect our ability to interpret the data from SFD® surveys or to enhance our technology.  

Additionally, we could have demands for our services that can exceed our capacity with our current personnel.  Although we have performed large scale SFD® surveys in the past to third parties, we may require additional skilled personnel to successfully fulfill multiple, concurrent fee-for-service contracts.  Within the province of Alberta the skilled personnel that we require are in short supply. These key people may be difficult to recruit into our company.  If we cannot hire these key personnel, or should lose current personnel, our ability to accept contracts or meet contract commitments may be adversely affected.

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 principal executive officer and largest shareholder, beneficially owns, as of June 22, 2009, approximately 17% of the common shares outstanding and therefore has a substantial influence in all shareholder matters. Additionally, he owns 10,000,000 preferred shares, 2,000,000 of these preferred shares are convertible immediately on a one-to-one basis at the discretions of Mr. Liszicasz, and the balance are convertible into common shares subject largely to certain revenue performance conditions being met.  If all the preferred shares were converted and there was no other change in our share structure he would own 43% of common shares.  See Notes to the Consolidated Financial Statements or Item 4.B Information on the Company – Business overview – Key Contract on Which We Rely for additional information relating to the preferred shares.

This potential conflict of interest is mitigated by an independent board of directors that protects the interests of all shareholders.  As well, Mr. Liszicasz is governed by a code of conduct and a fiduciary responsibility to ensure that the interests of all shareholders are protected.  

If these conflict of interest controls are not effective there is an opportunity for decisions being made by the company that may advantage Mr. Liszicasz and negatively impact other shareholders.

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

There is a limited public market for our common shares on the TSX Venture Exchange, Over the Counter Bulletin Board (the”OTCBB”) and the Frankfurt and Berlin Exchanges 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.

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 prod-

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ucts 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 drilling results, financing, advances in technology or other business developments.

Because we have a limited operating history and only one profitable year 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.

Sales of substantial amounts of the common shares on the public market, or the perception that substantial sales could occur, could adversely affect the prevailing market prices for those shares.  In addition, as of our last interim report on March 31, 2009, our employees, former employees, directors, consultants and shareholders hold 1,559,537 vested options, 150,000 of vested warrants and 2,000,000 preferred shares that are convertible to common shares entitling them to acquire 3,709,537 common shares.  Subsequent to this interim report there has been no substantial change to the number of vested options or warrants .

You will be subject to the penny stock rules to the extent our stock price on the OTCBB 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 OTCBB 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 document prepared by the 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 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 stock 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.

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.  Subject to compliance with applicable corporate and securities laws, 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 their discretion, determine to be necessary and appropriate.  Proportionate ownership and voting rights of common shareholders could be adversely affected by the issuance of additional common shares, that may result in dilution of net tangible book value per share.

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.

The company's success and future revenue growth will depend, in part, on its ability to protect its intellectual property.  

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We have no immediate intentions of obtaining a patent for the SFD® technology as we believe the risk and cost of seeking a patent exceed the benefits of a patent.  The patent protection process would require disclosure of the 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 intellectual property in all or any jurisdiction within North America or other countries throughout the world.  If registered, there can be no assurance that it would be sufficiently broad to protect the company's 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 the company.  Finally, protection afforded by patents is limited by the financial resources available to legally defend intellectual property rights.  NXT currently does 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 of 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.  

The company reassesses the appropriateness of its intellectual property protection strategy on an ongoing basis and seeks advice from intellectual property advisors.  We may seek patent protection of our technology if conditions change in the future.  

Despite these precautions, it may be possible for a third party to copy or otherwise obtain and use the company's technology without authorization, develop similar technology independently or design around the company's secrets.  There can be no assurance that the steps taken by the company to prevent misappropriation or infringement of our intellectual property will be successful.  An inability to protect our intellectual property would make it possible for competitors to offer similar products and services.

Any failure by the company to protect its intellectual property could have a material adverse effect on its 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.

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

Independent third parties provide all the services required to 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 obtain insurance coverage to provide us with additional risk protection.  We require the flight contractor to maintain appropriate insurance coverage for the risks associated with aircraft operations.  In addition, we maintain general business insurance coverage.

Despite our policy not to operate the aircraft directly we cannot avoid all risks of flight operations.  In the event of an incident or accident we may be sued by injured parties and to the extent that our SFD® equipment is damaged we may be unable to conduct SFD® surveys for several months.

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We have operated in the oil and gas industry that may subject us to industry specific hazards that can result in unexpected costs to the company.

Oil and natural gas exploration projects are subject to hazards related to the drilling of oil and natural gas wells, including the risk of fire, explosion, blow-out, pipe failure, casing collapse, abnormally pressured formations and environmental hazards such as oil spills, gas leaks, ruptures and discharges of toxic gases.  These hazards can cause personal injuries or loss of life, severe damage to or destruction of property, natural resources and equipment, pollution or other environmental damage, clean-up responsibilities, regulatory investigation and penalties and suspension of operations.

While we would have no direct liability in cases where our participation is limited to an overriding royalty interest, the failure or inability of the project operator to procure insurance at an acceptable cost or the occurrence of a significant adverse event not fully insured or indemnified against could have an indirect, adverse effect on our business, financial condition and results of operations to the extent it adversely affects the operator’s ability to complete projects where we have a beneficial interest.

We conduct business in foreign currencies thereby exposing us to currency exchange losses.

Our financial position will be affected by exchange rate fluctuations.  We hold cash in both Canadian and United States dollars.  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 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.

We are a Canadian company and our nationality may impair the enforceability of 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, our board of directors and 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 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

Summary

NXT was incorporated under the laws of the State of Nevada on September 27, 1994 and continued from the State of Nevada to the Province of Alberta, Canada on October 24, 2003. The company commenced business operation in 1996 for the purpose of developing and commercializing our proprietary SFD® survey system.

Our registered office is located at 1400, 505 - 3rd Street SW, Calgary, Alberta, Canada and our telephone number is (403) 264-7020.  In the United States our authorized agent is Parasec at: 318 North Carson Street, Suite 208, Carson City, NV and their telephone number is (888) 972-7273.  

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We are a reporting issuer in Alberta under the Alberta Securities Commission.  We are a reporting company in the United States under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and our common shares trade publicly in Canada on the TSX Venture Exchange under the symbol "SFD.V", over-the-counter within the United States on the OTC Bulletin Board under the symbol "NSFDF.OB" and in Europe on the Berlin and Frankfurt Exchanges under the symbol “EFW”.

We are a technology company focused on providing a service to oil and natural gas exploration clients using our SFD® survey system.  The SFD® system is a remote sensing airborne technology comprised of SFD® sensors, integrated electronic data acquisition, processing and interpretation subsystems. SFD® is the registered trade mark of NXT Energy Solutions Inc.  

The underlying technology employed by our SFD® survey system was invented by George Liszicasz, our CEO, president and largest shareholder.  The technology was licensed to the company by Mr. Liszicasz until December 31, 2006 through a series of consecutive license agreements.  On December 31, 2006 the company acquired the technology through a Technology Transfer Agreement from Mr. Liszicasz and terminated the license agreement.

Our airborne SFD® survey system is offered to clients on a fee-for-service basis. Under contract we survey large tracts of land, then identify and prioritize oil and gas prospect areas (“Prospect Areas”) for our clients.  A Prospect Area is defined as an area having subsurface structural trapping mechanisms with oil and gas reservoir potential. Prospect Areas are generally further evaluated by clients using conventional exploration techniques, such as conducting a follow-up seismic survey prior to the client selecting a drilling location. Our SFD® survey system is less expensive, quicker and less environmentally intrusive than other existing wide-area reconnaissance survey systems capable of assessing reservoir potential.  These advantages can reduce for our clients the risk, finding costs and time required to identify oil and gas prospects.

The SFD® survey system is a proven technology that has successfully been field tested for clients and joint venture partners.  Several independent reports confirm the efficacy of the technology and five clients have conducted surveys for which they have paid the company $ 9,759,586.

Risk Factors

We are subject to a number of risks that you should be aware of before you decide to buy our common stock. These risks are discussed in the “RISK FACTORS” section of this Form 20-F.

Corporate History

NXT is a technology company focused on using its proprietary SFD® technology for oil and gas exploration.  We were initially incorporated in the State of Nevada on September 27, 1994 under the name Auric Mining Corporation.  In January 1996 we acquired all of the common stock of NXT Energy USA (then known as Pinnacle Oil Inc.) from its stockholders in exchange for our common stock.  As a consequence of this acquisition, NXT Energy USA became our wholly owned subsidiary and its stockholders acquired a 92% controlling interest in our common stock.

Prior to this transaction, we were a corporate shell conducting no active business, and NXT Energy USA was a development stage research and development enterprise holding world-wide rights to use the SFD® technology for hydrocarbon exploration purposes through an agreement with our CEO, president and board member George Liszicasz. Mr. Liszicasz was the inventor of the technology.

Immediately after this transaction we changed our name to Pinnacle Oil International, Inc. and subsequently, on June 13, 2000 we changed our name to Energy Exploration Technologies.

Throughout the period from fiscal year 2000 through to 2005, NXT made capital investments for the purpose of developing oil and gas properties.  In this period NXT invested U.S. $10.1 million; U.S. $5.0 million of which was invested in Canada and U.S. $5.1 million which was invested in the United States (the United States investments were solely in the period 2000 through 2002).  There was no significant capital expenditure on oil and gas properties in the fiscal years ended 2006, 2007 and 2008.  In the fiscal years ended 2006, 2007 and 2008 the company made expenditures of $39,869, $5,954 and $3,177 respectively on oil and gas properties primarily to maintain lease commitments on undeveloped lands.

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Expenditures on oil and gas properties prior to 2006 were high risk in nature with U.S. $1.4 million invested into the acquisition of land and U.S. $8.6 million expended on exploration programs with the balance on development.  These expenditures were partially targeted towards land identified by SFD® surveys.  

We incurred these pre-2006 expenditures generally to provide evidence of the efficacy of the SFD® survey system through direct exploitation of SFD®-identified Prospect Areas.  This tactic, although partially effective, suffered because NXT lacked the capital base to exploit the technology independently.  To counter these capital deficiencies NXT entered into joint venture agreements with third parties to jointly exploit properties.  These joint venture obligations included non-SFD® identified properties, thereby diverting capital resources away from the prime SFD® prospects.

In January 2003 we adopted a formal plan to divest our U.S. oil and gas properties.  On May 9, 2003 we closed a sale transaction with our U.S. joint venture partner to sell the properties for $1.5 million consisting of $720,000 in cash with the balance paid through the return to treasury of all outstanding preferred shares.

Effective on April 1, 2008 the company sold its sole Canadian producing oil well for a net proceed of $47,400.  Currently the company’s interests in oil and gas properties consist of undeveloped land in Canada and royalty interest.

On October 24, 2003 at a special shareholders’ meeting, a majority of our shareholders approved the continuance of the company from the State of Nevada to the Province of Alberta, Canada.  At that time we continued or were re-incorporated in the Province of Alberta, Canada under the Business Corporations Act (Alberta) and we modified our name to Energy Exploration Technologies Inc.  Throughout 2004 and to the present we have conducted our business activities primarily through the company’s Canadian parent and subsidiaries.  Our wholly-owned subsidiaries located in the United States are currently inactive.  Our business is based in Calgary, Alberta, Canada.

On December 21, 2007 both NXT Aero Canada Inc. and NXT Energy Canada Inc., two wholly owned subsidaries of NXT, initiated procedures for dissolution.  Upon completion of the dissolution in 2008 all the assets and liabilities of these corporations were transferred to the parent, NXT.  

On September 22, 2008 the company’s name was changed from Energy Exploration Technolgies Inc. to NXT Energy Solutions Inc. by way of Articles of Amendment filed pursuant to the Business Corporations Act (Alberta).

History of Technology Agreements

On January 1, 1996 our initial entitlement to use SFD® technology was obtained through an agreement executed with Mr. George Liszicasz who is our CEO, president and director.  Pursuant to the terms of this agreement Mr. Liszicasz agreed to provide oil and gas prospects located by utilizing the SFD® sensors (“SFD® Device”) on an exclusive basis to NXT.  The agreement had a five year term that expired on December 31, 2000.  The agreement contemplated that NXT would conduct seismic surveys and acquire land “if commercially reasonable to make such acquisitions” over prospect areas and Mr. Liszicasz would be entitled to an overriding royalty interest on these lands.  NXT did not acquire any interest in the SFD® Device.

On August 1, 1996 we entered into an agreement with Momentum, Mr. Liszicasz and Mr. Dirk Stinson (the “Restated Technology Agreement”).  Momentum was a Bahamas corporation directly owned and controlled by Messrs. George Liszicasz and R. Dirk Stinson.  Mr. Stinson is a past director and officer of NXT.  The Restated Technology Agreement was deemed effective January 1, 1996 with a ten year term that ended on December 31, 2005 and superseded the prior agreement dated January 1, 1996.  

The following summary outlines the major terms of the Restated Technology Agreement complete with a retrospective account of relevant subsequent events related to these terms.

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On April 3, 1998 we executed an amendment to the Restated Technology Agreement, which amended certain provisions relating to the “Payment of Fee to Momentum for Provision of SFD® Data” in section 5(a) therein. No fees became due and payable throughout the term of the Restated Technology Agreement, as amended.

On November 4, 2004 we executed two agreements with Mr. Liszicasz regarding the ownership of, use of and access to the SFD® technology.  These are the “Interim Operating Agreement” and the “Technical Services Agreement”.  The Interim Operating Agreement was effective as of August 25, 2004 and the Technical Services Agreement was effective as of January 1, 2006.

The Interim Operating Agreement states that NXT has an undivided and unencumbered title to the four SFD® sensor devices engineered and constructed by Mr. Liszicasz subsequent to June 1, 1999 plus all subsequently manufactured sensors.  This agreement obliged Mr. Liszicasz to provide NXT with his know-how and technical expertise for the manufacture, redesign and advancement of the sensors utilizing his new proprietary quantum theories as they apply to NXT’s use of the technology; plus to provide interpretation and analysis of data produced by surveys using SFD® sensors.  The Interim Operating Agreement expired on December 31, 2005.

The Technical Services Agreement was amended prior to its effective date by the Amended and Restated Technical Services Agreement.

On December 31, 2005 NXT’s board of directors approved the “Amended and Restated Technical Services Agreement” with Mr. Liszicasz that superseded the Interim Operating Agreement and the Technical Services Agreement.  The Amended and Restated Technical Services Agreement became effective December 31, 2005 and expires ten years thereafter.  In accordance with the Amended and Restated Technical Services Agreement, Mr. Liszicasz received 10,000,000 preferred shares.

In accordance with the Amended and Restated Technical Services Agreement, Mr. Liszicasz granted to NXT an exclusive, world-wide license to the SFD® technology.  This license entitled NXT to the rights to use, develop, copy and modify the existing sensors to the extent necessary and also the theories of quantum physics which are utilized in the operation of the sensors for use in the exploration of hydrocarbon reserves.  The SFD® technology remained the property of Mr. Liszicasz.  

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On December 31, 2006 we executed the Technical Transfer Agreement (“TTA”) that superseded the Amended and Restated Technical Services Agreement.  Upon execution of the TTA, Mr. Liszicasz transferred all his rights and entitlements to SFD® technology to NXT and accordingly the previous license as defined in the Amended and Restated Technical Services Agreement was terminated. 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.  The number of preferred shares issued to Mr. Liszicasz in accordance with the Amended and Restated Technical Services Agreement remained unchanged at 10,000,000 although certain attributes of these preferred shares were changed.  See Item 4.B “Key Contract on Which We Rely” within this Form 20-F for more information on these contracts.  

On August 15, 2008 a settlement was reached between the company and Mr. Stinson wherein we paid $90,000 and Mr. Stinson provided us with a complete release to any claim against NXT, its directors or officers, or any claim of an interest in the SFD® technology.  

Patent

We have not patented our SFD® technology, however, we understand we can obtain a worldwide patent in the future (see “Risk Factors” in this Form 20-F).  Our right to patent the SFD® technology in the future is not compromised by our commercial use of the technology as it has never been disclosed to third parties (except under very limited confidential terms) or released in any manner into the public domain. See Item 3.D Key Information – Risk factors within this Form 20-F.

Business Development History

The business operations of the company can be divided into two discreet phases:

Phase I (the Technology development stage) until the end of 2005 wherein NXT was engaged in oil and gas exploration;  

Phase II (the commercialization stage) for the period after 2005 NXT initiated commercial operations as a service provider to the oil and gas industry.  

Phase I from 1996 until the end of 2005 was characterized by the development of the SFD® detectors and the testing of the detectors in various environments in North America and the Middle East and obtaining independent verification that corroborated management’s assertions on the efficacy of the SFD® system.  During this phase NXT participated in exploration programs and incurred capital expenditures to develop properties that may or may not have been identified by the SFD® survey system.  This phase was completed in December 2005.

The company in this phase worked to develop the technology, gain sufficient field tests to prove the efficacy and to gain industry acceptance of the technology.  Throughout this period the company entered into several joint venture agreements with third party oil and gas exploration companies wherein NXT participated in oil and gas exploration activities.  The objectives of the company in participating as a joint venture partner were to:

·

obtain third party support to share cost for SFD® survey programs;

·

maximize the kilometers surveyed by the SFD® survey system;

·

gain industry acceptance of the SFD® survey system through a demonstrated track record of successfully locating oil and gas reserves;  and

·

to directly benefit from successful oil and gas exploration of SFD® located prospects.

In the period 2004 through 2005 NXT focused resources on obtaining third party support for the SFD® technology.  Expert third parties were engaged to evaluate the effectiveness of the SFD® survey system.  During this period a body of empirical evidence supporting the efficacy of SFD® survey system was prepared to support company assertions on SFD® survey system capabilities.

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Phase II began in 2006 wherein the company began the process of providing services to clients on a fee-for-service basis.  NXT began seeking commercial agreements with oil and gas companies, governments of petroleum producing countries and other entities interested in assessing land for the potential of finding oil and natural gas reserves.  NXT’s standard service agreement includes a fixed fee from the client in consideration for NXT providing a survey followed by a report that identifies any Prospects within the survey area.  In addition NXT may negotiate a Gross Overriding Royalty or some other incentive fee, where applicable, on Prospects identified by the SFD® survey.  

NXT began marketing of its SFD® survey system in 2006 through direct presentation of the technology to prospective clients and by attending trade shows and other industry events.  The targeted potential customers include exploration and production companies, energy trusts, governments and other exploration and production service providers.

Since the initiation of this Phase II the company has realized commercial success reporting a net income for the first time in 2007.  In 2006 the company conducted its first SFD® surveys for a fee for two independent clients and earned $1,206,684 of revenue and generated a net loss of $4,274,103.  In 2007 the company conducted five surveys for three different clients and earned revenue of $5,608,432, generating a net income of $350,431. In 2008 the company conducted multiple surveys for two different clients and earned $2,944,470, generating a net loss of $1,141,291.

These surveys, conducted for clients since 2006, have provided invaluable case studies, client endorsements and industry recognition that are required to broaden the adoption of our services into both domestic and international markets.  

B.

Business overview

NXT utilizes its proprietary SFD® technology to provide a fast and cost effective method for evaluating large survey areas for the oil and gas clients.

SFD® is an airborne exploration tool that uses SFD® sensors to measure stress regime distributions to locate geological features such as structure, faults, fractures, reef and reservoir potential for the purpose of oil and gas exploration.  Survey areas often exceed 5,000 square kilometers.  The SFD® system can identify subsurface structures that have a high likelihood of bearing hydrocarbons and is effective over a wide range of geological environments and depths; thereby focusing and reducing the time and expense associated with conventional exploration.

NXT will conduct SFD® surveys for clients for a fee plus potentially a gross overriding royalty or other performance-based fee on any future production on SFD® prospect areas.

NXT will deliver at the end of each survey a detailed report of the survey area with a ranking of the prospect areas in accordance with their assessed ranking of prospectivity.

The company for the period 2006 through 2008 has provided our SFD® airborne geophysical survey service to clients in the western sedimentary basin located in Western Canada.  Our revenues were earned solely in this market and consisted of $1,206,684 in fiscal 2006, $5,608,432 in fiscal 2007 and $2,944,470 in fiscal 2008.

Corporate Mission

Our mission is to become an industry leading service provider to the oil and natural gas industry.  We intend to continue utilizing our proprietary SFD® survey system to become the service provider of choice for clients desiring a technological advantage in the identification of prospective oil and gas properties in frontier regions throughout the world.

Business Strategy

We shall provide SFD® survey services to clients on a fee-for-service basis. NXT does not intend to participate either directly or as a joint venture partner in any future exploration or development wells.

Under our business strategy we will earn revenues from the following sources:

·

Conducting client specific flight surveys for a fee;

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·

Earning gross overriding royalty (“GORR”) income or other incentive fees upon clients successfully generating production on SFD® Prospects;

We shall provide Prospect Areas to clients through customized surveys.  Clients may retain exclusive rights to SFD® reports obtained from customized flights for a specific period of time as defined in the service contract; thereafter the SFD® reports become available on a fee basis to any clients.  We may conduct flights over areas of interest to increase our data on lands for the purpose of identifying Prospect Areas for sale to clients or to showcase our SFD® capabilities for sales and marketing purposes.

Business Objectives

We believe that we can generate an annual net income from successfully executing this Business Strategy.  We anticipate the cash flow that we generate will provide the necessary operating capital to sustain our future growth and enhance the SFD® technology in accordance with our base assumptions.  We believe that our SFD® survey system, given its superior effectiveness and competitive price, will become an industry leader in locating Prospect Areas for the oil and gas industry in frontier regions.

Our general business objectives are to:

·

generate cash flow from operating activities by entering into service contracts with oil and gas clients;

·

continue to build credibility and industry acceptance of the SFD® technology;

·

enhance the SFD® technology to ensure NXT maintains its position as the most effective oil and gas airborne survey company; and

·

develop our capability to meet the anticipated growth in client demands for our service.

NXT has generated interest in its services from a number of prospective clients.  Our ability to generate revenue is not seasonal.  Contacts will be made directly by NXT personnel or in certain international markets through independent agents or large service providers.  The potential end clients include:

·

international, intermediate and junior oil and gas companies;  

·

energy investment pools contemplating a business strategy utilizing the SFD® survey system;

·

foreign governments in countries looking for a means to better exploit their natural resources; and

·

other service providers as general contractor to above potential clients.

Our 2009 objective is to focus on revenue growth through the implementation of new marketing, sales and technical strategies that showcase our past achievements.  A key advantage of our position today as compared to just three years ago is that we can build upon commercial and technical successes from our 2006 through 2008 Canadian surveys. These surveys provide invaluable case studies, client endorsements and industry recognition that are required to broaden the adoption of our services internationally.  To meet this objective we are expanding our geological and geophysical technical team and establishing a strong sales and marketing organization. NXT is determined to develop a market brand to evolve from the technology company of the past to become a respected service provider with strong geological and geophysical expertise and an industry leading reputation.

We recently announced the appointment of Mr. Murray Christie as our Chief Operating Officer. Mr. Christie’s career includes over 15 years of geological modeling and geophysical survey experience providing leading edge technology solutions to international and domestic oil and gas clients. He offers a track record of impressive revenue growth derived from launching technologies for the oil and gas sector. Mr. Christie’s previous roles include COO of Geomodeling Technology Corporation and Canadian President of Paradigm, a major international geosciences software and service provider. In addition, we have engaged the services of a senior consulting geologist and geophysicist, Mr. Azer Mustaqeem of Petro-Explorer Consulting, who offers over ten years of advanced geophysical modeling and software experience gained throughout North America. Mr. Mustaqeem holds both a Master of Science in Ex-

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ploration and Development Geophysics from Stanford University and Master of Science in Applied Geology from Azad Jammu & Kashmir University in Pakistan.

These recent management additions, both with strong geosciences backgrounds, shall continue to be complemented by our Geosciences Advisory Board as announced on June 26, 2008. The board’s mandate is to expand the industry acceptance and application of SFD® survey system as well as to advance the understanding of the underlying science. The advisory board has provided invaluable contributions within this mandate.  We are indeed fortunate for the services of our advisory board consisting of Dr. George Iusco, Prof. Arief Budiman and Mr. Leslie Kende.

Furthermore in 2008, to develop a market focus for our business plan, we began assessing various international market opportunities for our services. These initiatives include attending industry conferences, conducting in-house evaluations of potential international markets, consulting with international agents and drawing upon the vast experience of our Board of Directors and Geosciences Advisory Board.

Particularly, our recent attendance at industry conferences has significantly advanced our business plan development. They provided market intelligence, access to key decision makers and advisors and provided excellent forums to introduce and stimulate dialogue on our SFD® technology. Since September 2008 we have attended the OIL & MONEY and the APPEX conferences in London, the VENEZUELAN GEOPHYSICAL CONGRESS in Caracas, the SEG (Society of Exploration Geophysicists) conference in Las Vegas, and the NAPE (formerly "North American Prospect Expo") conference in Houston.  NXT was represented at these conferences by key members of management, of the Board of Directors and of the Geosciences Advisory Board.

Throughout this process we have formulated clear criterion to evaluate the market potential for any international region or country. This criterion includes an assessment of budgeted expenditures for frontier exploration, fiscal and geo-political stability, general receptiveness of participating companies to new technologies and the relative competitive advantages of SFD® within the region. By applying this criterion we have now completed extensive reviews of potential markets consisting of over 12 regions of the world. Through this process we have ranked regions for their potential.

As well, we have developed a better understanding of the requirements to overcome industry resistance and enable the adoption of SFD® by the oil and gas industry at large.  Industry requires detailed comparisons between SFD® and other geological and geophysical data.  We have initiated a major program to conduct these detailed comparative studies. This program is still in its early stage, however, it has provided valuable presentation material to support our sales initiatives.

Core to our international strategy is discipline and focus.  The world market is vast and our resources limited.  Spreading resources too thin by attempting to pursue multiple markets throughout the world concurrently only invites failure.  Success in any market depends upon dedicating enough time and resources to gain detailed knowledge of the marketplace, the industry players and their unique problems and challenges.  This knowledge is then used to develop a complete product solution tailored for a market’s needs.  

A complete market solution is not met with simply a superior technology.  A market solution requires a full suite of services to assist a client to understand, accept and then apply the technology appropriately to achieve a tangible operational advantage.  

To create these complete market solutions and gain broad acceptance in a market requires a focused effort.  

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Our evaluation of potential markets to focus our international activities identified Colombia as an area that offered several advantages as an initial target market for our SFD® services.  Colombia has evolved quickly to become one of the more attractive oil and gas exploration opportunities in the world.  The Colombia government has undertaken effective measures to implement fair and predictable fiscal terms and energy policies to attract foreign investment.  These measures, coupled with greatly improved security and an abundance of underexplored yet prospective basins, has resulted in a large increase in 2008 exploration activities over prior years; this trend is projected to continue throughout 2009.  In 2010 ANH, the Colombian national hydrocarbon agency proposes to release in excess of 300,000 square kilometers for open round bidding.  Our SFD® survey system is well suited to meet the technical, logistical and financial challenges associated with surveying these large under-explored basins of Colombia.

Our interest in Colombia was verified with NXT being awarded a contract to provide U.S. $2.3 million of SFD® survey services in Colombia for a Canadian-based international oil and gas company.  In May of 2009 we commenced operation in Colombia and anticipate delivering the initial survey results to the client prior to the end of the second quarter of 2009.

Sources of Raw Material

We do not foresee any constraints upon materials or equipment that will impede our ability to execute this plan or affect the company’s ability to conduct and/or expand its business.  In order to conduct our survey we require the following:

·

Survey aircraft: - Historically NXT has both owned its own aircraft and chartered aircraft from independent charter aircraft companies.  

In early 2009, in preparation for serving an international client base, we entered into a one year charter agreement with Air Partners Corporation, a Calgary based air-charter operator, to provide aircraft, crew and maintenance services for our survey operations worldwide. This charter agreement can be extended for multilple years upon mutal agreement of the parties.  Air Partners is a subsidiary of Morgan Air Services which has been providing aviation services worldwide since 1983. This agreement gives us priority access, on an as-needed basis, to multiple Citation 560 series jet aircraft that have been modified to meet our survey requirements. These jets are well suited for international operations as they will provide the additional flying range required as compared to the Piaggio aircraft previously used in our Canadian operations.

·

SFD® sensors: - All the 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, NXT has demonstrated its 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 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: - The customized software used in our data acquisition system is written and modified by outside consulting programmers with whom we have long-standing relationships.  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.

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

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Key Contract on Which We Rely

Technical Transfer Agreement

Upon execution of the TTA on December 31, 2006 Mr. Liszicasz transferred all his rights and entitlements to SFD® technology to the company and accordingly the Amended and Restated Technical Services Agreement executed on December 31, 2005 that previously licensed to us the SFD® technology was terminated.  

As consideration for Mr. Liszicasz selling the SFD® technology to NXT we modified the conversion terms for the 10,000,000 preferred shares originally issued pursuant to the Amended and Restated Technical Services Agreement executed on December 31, 2005.  The following table summarizes these modifications:

For a further discussion of the history of the SFD® technology see Item 4.A in this Form 20-F.

A Second Amended and Restated Technical Services Agreement (the “Second Amended Services Agreement”) was executed on December 31, 2006 outlining the terms of Mr. Liszicasz’ employment agreement with the company. The Second Amended Services Agreement has a term ending December 31, 2015 or until the Second Amended Services Agreement is terminated by the company or Mr. Liszicasz, and establishes Mr. Liszicasz’ entitlement to normal employee remuneration such as salary, benefits, bonus and options and identifies grounds for termination of this agreement.

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The following schedule provides a summary of the ownership of the preferred shares as of June 22, 2009:

The preferred shares carry no voting rights.  2,000,000 of these preferred shares are convertible on a one-to -one basis at the discretion of the holder and the remaining 8,000,000 preferred shares are potentially convertible upon certain into common shares on a on a one-to-one basis.

The Second Amended Services Agreement is included by reference as Exhibit 4.36 in this Form 20-F.

.Air Partners Aircraft Charter Agreement

On May 8, 2009, the company executed an aircraft charter agreement with Air Partners Corp. to provide aircraft, crew and maintenance services for SFD® survey operations utilizing their fleet of Cessna Citation 560 series jet aircraft.  NXT’s minimum aircraft charter commitment under this agreement is approximately Cdn. $400,000 from the date of the agreement.  

Under the terms of this agreement Air Partners shall provide aircraft charter services to meet NXT’s aircraft survey requirements both in Canada and many international locations, including our current survey in Colombia.  Specifically Air partners shall provide on a non-exclusive but preferential basis two Cessna Citation 560 aircraft, specifically modified to meet SFD® survey mission requirements, including all aircraft personnel (including pilots, aircraft maintenance engineers and administration), insurance plus aircraft maintenance, servicing and grooming all in accordance with Transport Canada and other regulatory standards.   

NXT’s minimum commitment is based upon a minimum to charter the aircraft for at least 125 hours at a rate of $3,170 per flight hour for operations in Canada and the U.S. and $3,351 per flight hour for operations outside of Canada and the U.S. Flight hours in excess of this 125 hour minimum shall be made available to NXT for survey operations on an as required bases subject to availability.  As of June 22, 2009 NXT has paid $50,000 to Air Partners pursuant to this agreement.

Air Partners Corp., in conjunction with its parent Morgan Air Services, has provided aviation related services worldwide since 1983.  The Air Partner team consists of respected aviation experts and industry leaders including, most notably, their President & CEO, Mr. Tim Morgan.  In 1995, Mr. Morgan became one of four founding shareholders of WestJet Airlines Ltd. and served as Executive Vice-President of Operations until 2005.  Today Westjet is the second largest air carrier in Canada.

SFD® Survey Contract in Colombia

On April 13, 2009, NXT executed a contract to conduct a U.S. $2.3 million SFD® survey in Colombia (the “$2.3 million Colombian contract”) with Pacific Stratus Energy Colombia Corp (the “Client”). The survey area consisted of a land assigned to the Client for evaluation by the Colombian regulatory authority for technical evaluation for hydrocarbon. Pursuant to the terms of the contract NXT is responsible for the following principal obligations:

·

Carry out flights over the exploratory block and additional control flights over fields discovered in the vicinity of the block.

·

Identify anomalies of the stress field which could be associated with accumulations of hydrocarbons.

·

Recommend prospective areas within the block.

·

Mobilize the acquisition equipment—airplane and remote sensors of forces—to the area on May 15, 2009.

·

Present a preliminary report on June 30, 2009.

·

Present a final report on July 21, 2009 .

On June 23, 2009 NXT announced completion of flight operations and progress invoicing of $1.9 million with a stated expectation that the preliminary report will be submitted to the client by June 30, 2009.

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Competitive Position

Our SFD® airborne survey service is based upon a proprietary technology.  It is capable of remotely, from a survey aircraft, identifying subsurface structural 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 similar or comparable to our SFD® survey system for oil and natural gas exploration.  

Seismic is the standard technology used by the industry to image subsurface structures.  It is our view that the SFD® survey system is a complementary technique to seismic.  Our system is intended to focus seismic and other resources upon those areas that have the highest potential for oil and gas.  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 is often used as a focusing tool for seismic.  With a SFD® survey a large tract (i.e. over 5,000 square kilometers) of land can be evaluated quickly to determine the location of any hydrocarbon prospective areas within the survey area.  Seismic surveys, although also effective in identifying these prospective areas, are much more expensive and require significantly more time than SFD® surveys.  Clients can first utilize an SFD® survey to quickly evaluate a large area and then focus a much smaller seismic survey on the prospective areas identified by SFD®. This approach maximizes the effectiveness of the seismic program and substantially reduces the overall cost and time 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 may provide regional geological information such as basement depth, sedimentary thickness and faulting; however, neither technique is capable of identifying potential hydrocarbon systems and prospect areas nor can they provide information that is comparable to SFD® generated information.  

Governmental & Environmental Regulation

i)

SFD® Survey Flight Operations

The operation of our business, namely conducting aerial SFD® surveys and interpreting SFD® data, is not subject to material Canadian governmental or environmental regulation with the exception of flight rules issued by Transport Canada governing the use of private 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 ablity to perform SFD® surveys as freely as in Canada.

ii)

Oil and Gas Exploration and Development Projects

The oil and natural gas industry in general is subject to extensive controls and regulations imposed by various levels of the federal and provincial governments in Canada.  In particular, oil and natural gas exploration and production is subject to laws and regulations governing environmental quality and pollution control, limits on allowable rates of production by well or proration unit, and other similar regulations.  Laws and regulations are generally intended to prevent the waste of oil and natural gas, to protect rights to produce oil and natural gas between owners in a common reservoir, to control the amount of oil and natural gas produced by assigning allowable rates of production, and to reduce contamination of the environment.  Environmental regulations can affect our operations.  Drilling in certain areas has been opposed by environmental groups and, in certain areas, has been restricted.  We believe that the trend to stricter environmental legislation and regulations will continue.

We do not expect that any of these government controls or regulations will prevent projects in which we participate.

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C.

Organizational structure

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

D.

Property, plants and equipment

Oil and Gas Properties

The company owns limited acres of undeveloped land in the Canadian western sedimentary basin.  These assets are not a material asset of the company and carry a book value in our financial records of $7,315.  Additionally the company is entitled to royalty interest on production on certain lands surveyed by clients.  The value of these royalty interests are not determinable.  

Facilities  

We operate from a 7,087 square foot leased office, research and development facility located at Suite 1400, 505-3rd Street SW, Calgary, Alberta T2P 3E6 .  This leased facility includes a 2,100 square feet addition that commenced on June 1, 2008 that was added to the original lease on a co-terminus basis.  The original six year lease was entered into on November 1, 2006 and expires on October 31, 2012.

The minimum sublease payments commencing June 1, 2008 through to November 1, 2009 is $29,483 per month and $30,729 per month for the remaining three years of the lease.

Equipment

Our SFD® technology is comprised of the following components, which we collectively refer to as our SFD® survey system, used for the following functions:

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ITEM 4A.