NXT Energy Solutions Inc. (Form: 6-K, Received: 08/16/2022 16:06:58)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16

under the Securities Exchange Act of 1934

For the month of August 2022

Commission File Number: 000-24027

NXT Energy Solutions Inc.

(Translation of registrant's name into English)

Suite 302, 3320-17th Avenue S.W.

Calgary, Alberta T3E 0B4

Canada

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F ☒ Form 40-F ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

Yes ☐ No ☒

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):

Yes ☐ No ☒

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes ☐ No ☒

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):

The Issuer is filing material documents not previously filed.

Exhibit List:

99.1

Unaudited Condensed Consolidated Interim Financial Statements For the three and six months ended June 30, 2022

99.2

Management’s Discussion and Analysis (“MD&A”) For the three and six months ended June 30, 2022

99.3

Certification Of Interim Filings CEO

99.4

Certification Of Interim Filings CFO

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

NXT Energy Solutions Inc.

(Registrant)

Date: August 11, 2022

/s/ Eugene Woychyshyn

Eugene Woychyshyn

Chief Financial Officer

EXHIBIT 99.1

NXT ENERGY SOLUTIONS INC.

Unaudited Condensed Consolidated Interim

Financial Statements

For the three and six months ended

June 30, 2022

NXT ENERGY SOLUTIONS INC.

Condensed Consolidated Interim Balance Sheets

(Unaudited-expressed in Canadian dollars)

June 30,

December 31,

2022

2021

Assets

Current assets

Cash and cash equivalents

$ 616,842

$ 2,257,855

Short-term investments

500,000

550,000

Accounts receivable

432,295

841,567

Prepaid expenses and deposits

53,285

265,436

1,602,422

3,914,858

Long term assets

Deposits

236,559

234,475

Property and equipment

579,381

624,763

Right of Use Assets (Note 4)

1,525,968

1,943,252

Intellectual property (Note 5)

14,017,766

14,867,023

$ 17,962,096

$ 21,584,371

Liabilities and Shareholders' Equity

Current liabilities

Accounts payable and accrued liabilities (Note 6, 16)

$ 858,764

$ 500,625

Current portion of long-term debt

120,370

64,815

Current portion of lease obligations (Note 7)

574,058

532,936

1,553,192

1,098,376

Long-term liabilities

Long-term debt

879,630

935,185

Long-term lease obligation (Note 7)

895,521

1,369,668

Asset retirement obligation

23,371

22,337

1,798,522

2,327,190

3,351,714

3,425,566

Shareholders' equity

Common shares (Note 9): - authorized unlimited Issued: 65,341,775 (2021 - 65,250,710) common shares

95,831,418

95,779,352

Contributed capital

9,397,018

9,381,966

Deficit

(90,618,054 )

(87,002,513 )

14,610,382

18,158,805

$ 17,962,096

$ 21,584,371

Going concern (Note 1)

Commitments (Note 8)

Signed “George Liszicasz”

Director

Signed “Bruce G. Wilcox”

Director

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

[1]

NXT ENERGY SOLUTIONS INC.

Condensed Consolidated Interim Statements of Loss and Comprehensive Loss

(Unaudited-expressed in Canadian dollars)

For the three months

ended June 30,

For the six months

ended June 30,

2022

2021

2022

2021

Revenue

Adjusted-Note 2

Adjusted-Note 2

SFD^® related revenue (Note 14)

$ -

$ 3,144,373

$ -

$ 3,144,373

Expenses

Survey^® related costs, net

306,492

381,696

743,774

647,311

General and administrative expenses (Notes 11, 15, 16)

1,046,677

682,851

1,959,227

1,583,160

Amortization (Note 5)

442,097

444,171

884,534

885,995

1,795,266

1,508,718

3,587,535

3,116,466

Other expenses (income)

Interest expense, net

7,670

8,421

15,858

13,927

Foreign exchange loss (gain)

(31,355 )

88,533

(11,090 )

112,961

Intellectual property and other

3,090

7,179

23,236

16,789

(20,595 )

104,133

28,004

143,677

Income (loss) before income taxes

(1,774,671 )

1,531,522

(3,615,539 )

(115,770 )

Income tax expense

-

-

-

-

Net income (loss) and comprehensive income (loss)

$ (1,774,671 )

$ 1,531,522

$ (3,615,539 )

$ (115,770 )

Net income (loss) per share (Note 10)

Basic

$ (0.03 )

$ 0.02

$ (0.06 )

$ 0.00

Diluted

$ (0.03 )

$ 0.02

$ (0.06 )

$ 0.00

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

[2]

NXT ENERGY SOLUTIONS INC.

Condensed Consolidated Interim Statements of Cash Flows

(Unaudited-expressed in Canadian dollars)

For the three months

ended June 30,

For the six months

ended June 30,

2022

2021

2022

2021

Cash from (used in):

Adjusted-Note 2

Adjusted-Note 2

Operating activities

Net income (loss)

$ (1,774,671 )

$ 1,531,522

$ (3,615,539 )

$ (115,770 )

Items not affecting cash:

Stock based compensation expense

108,185

20,713

164,701

40,723

Amortization

442,095

444,171

884,534

885,995

Accretion expense

517

517

1,034

1,035

Non-cash lease costs

(1,814 )

(2,934 )

(4,837 )

(5,868 )

Change in carrying amount of right of use assets & lease liabilities

338

5,550

(13,449 )

11,851

Unrealized foreign exchange (gain) loss

(23,210 )

115,294

(3,333 )

134,564

Loss on disposal of assets and lease modification

-

-

11,921

-

Change in non-cash working capital balances (Note 13)

442,481

(1,348,631 )

855,748

(1,033,457 )

Lease deposit

23,191

-

23,191

-

991,783

(765,320 )

1,919,510

34,843

Net cash from (used in) operating activities

(782,888 )

766,202

(1,696,029 )

(80,927 )

Financing activities

Proceeds from the Employee Share Purchase Plan (Note 11)

12,965

16,590

29,071

36,225

Proceeds from long-term debt

-

1,000,000

-

1,000,000

Repayment of financial liability and lease obligation (Notes 4, 7)

-

(36,638 )

(27,950 )

(72,829 )

Net cash from (used in) financing activities

12,965

979,952

1,121

963,396

Investing activities

Acquisition of intellectual property (Note 5)

-

(50,310 )

-

(50,310 )

Proceeds from (used in) short-term investments

200,272

(126,307 )

50,000

64,954

Net cash from (used in) investing activities

200,272

(176,617 )

50,000

14,644

Effect of foreign exchange rate changes on cash and cash equivalents

17,772

(63,769 )

3,895

(78,268 )

Net increase (decrease) in cash and cash equivalents

(551,879 )

1,505,768

(1,641,013 )

818,845

Cash and cash equivalents, beginning of the period

1,168,721

2,003,223

2,257,855

2,690,146

Cash and cash equivalents, end of the period

$ 616,842

$ 3,508,991

$ 616,842

$ 3,508,991

Supplemental information

Cash interest paid(received)

22,484

10,994

21,080

14,808

Cash taxes paid

-

-

-

-

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

[3]

NXT ENERGY SOLUTIONS INC.

Condensed Consolidated Interim Statements of Shareholders’ Equity

(Unaudited-expressed in Canadian dollars)

For the three months ended

For the six months ended

June 30,

June 30,

2022

2021

2022

2021

Common Shares

Adjusted-Note 2

Adjusted-Note 2

Balance at beginning of the period

$ 95,808,189

$ 95,363,018

$ 95,779,352

$ 95,327,123

Issuance of common stock on the Employee Purchase Plan (Note 11)

23,229

29,803

52,066

65,698

Balance at end of the period

95,831,418

95,392,821

95,831,418

95,392,821

Contributed Capital

Balance at beginning of the period

9,389,466

9,359,466

9,381,966

9,355,716

Issuance of equity for intellectual property (Note 5)

-

207,300

-

207,300

Recognition of stock based compensation expense (Note 11)

7,552

7,500

15,052

11,250

Balance at end of the period

9,397,018

9,574,266

9,397,018

9,574,266

Deficit

Balance at beginning of the period

(88,843,383 )

(85,581,522 )

(87,002,515 )

(83,934,230 )

Net (loss) income

(1,774,671 )

1,531,522

(3,615,539 )

(115,770 )

Balance at end of the period

(90,618,054 )

(84,050,000 )

(90,618,054 )

(84,050,000 )

Total Shareholders' Equity at end of the period

$ 14,610,382

$ 20,917,087

$ 14,610,382

$ 20,917,087

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

[4]

NXT ENERGY SOLUTIONS INC.

Notes to the Unaudited Condensed Consolidated Interim Financial Statements

As at and for the period ended June 30, 2022

(Expressed in Canadian dollars unless otherwise stated)

1. The Company and going concern

NXT Energy Solutions Inc. (the "Company" or "NXT") is a publicly traded company based in Calgary, Alberta Canada.

NXT's proprietary Stress Field Detection ("SFD^®") technology is an airborne survey system that utilizes quantum-scale sensors to detect gravity field perturbations in an airborne survey method which can be used both onshore and offshore to remotely identify traps and reservoirs with exploration potential in both the hydrocarbon and geothermal industries.

These condensed consolidated interim financial statements of NXT have been prepared by management in accordance with generally accepted accounting principles of the United States of America ("US GAAP”).

These condensed consolidated interim financial statements reflect adjustments, all of which are normal recurring adjustments that are, in the opinion of management, necessary to reflect fairly the financial position and results of operations for the respective periods.

These condensed consolidated interim financial statements have been prepared on a going concern basis. The going concern basis of presentation assumes that NXT will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business.

The events described in the following paragraphs highlight that there is substantial doubt about NXT’s ability to continue as a going concern within one year after the date that these condensed consolidated interim financial statements have been issued. The Company’s current cash position is not expected to be sufficient to meet the Company’s obligations and planned operations for a year beyond the date that these condensed consolidated interim financial statements have been issued.

The Company has deferred payment of operating costs, including payroll and other general and administrative costs, and is evaluating alternatives to reduce other costs. If required, further financing options that may or may not be available to the Company include issuance of new equity, debentures or bank credit facilities. The need for any of these options will be dependent on the timing of securing new SFD^® related revenues and obtaining financing on terms that are acceptable to both the Company and the financier.

[5]

NXT ENERGY SOLUTIONS INC.

Notes to the Unaudited Condensed Consolidated Interim Financial Statements

As at and for the period ended June 30, 2022

(Expressed in Canadian dollars unless otherwise stated)

NXT continues to develop its pipeline of opportunities to secure new revenue contracts. However, the Company’s longer-term success remains dependent upon its ability to convert these opportunities into successful contracts, to continue to attract new client projects, expand its revenue base to a level sufficient to exceed fixed operating costs, and generate consistent positive cash flow from operations. The occurrence and timing of these events cannot be predicted with sufficient certainty.

The condensed consolidated interim financial statements do not reflect adjustments that would be necessary if the going concern basis was not appropriate. If the going concern basis was not appropriate for these condensed consolidated interim financial statements, then adjustments would be necessary in the carrying value of the assets and liabilities, the reported revenues and expenses, and the balance sheet classifications used. These adjustments could be material.

Covid-19 Pandemic

As of the date of these unaudited condensed consolidated interim financial statements, the Covid-19 pandemic continues to be a risk to the operations of the Company. The Company has made provisions so employees can work safely in the office or if necessary from home, followed all Alberta Health Services and Health Canada recommendations, and implemented hygiene policies. Demand for our services and prospective revenues may become adversely impacted the longer the Covid-19 pandemic continues. The impact of the continuation of the Covid-19 pandemic may hamper our ability to deliver SFD^® related revenues in the following ways. If restrictions on international travel become tighter, our aircraft and personal may not be able to perform project surveys. An outbreak of the virus among our staff or our customers’ personnel could delay any survey in progress. Business development may be delayed when in-person meetings and technical presentations may be a superior delivery method to tele-conferences or on-line video conferencing.

The situation is dynamic and the ultimate duration and magnitude of the impact on the financial effect to the Company is not known at this time. Estimates and judgments made by management in the preparation of these condensed consolidated interim financial statements are subject to a higher degree of measurement uncertainty during this period.

Use of Estimates and Judgements

In preparing these condensed consolidated interim financial statements, NXT is required to make estimates and assumptions that affect both the amount and timing of recording assets, liabilities, revenues and expenses since the determination of these items may be dependent on future events. The Company uses the most current information available and exercises careful judgment in making these estimates and assumptions. In the opinion of management, these condensed consolidated interim financial statements have been properly prepared within reasonable limits of materiality and within the framework of the Company’s significant accounting policies included in the annual audited consolidated financial statements for the year ended December 31, 2021. The estimates and assumptions used are based upon management's best estimate as at the date of the condensed consolidated interim financial statements. Estimates and assumptions are reviewed periodically and the effects of revisions are reflected in the period when determined. Actual results may differ from those estimates.

[6]

NXT ENERGY SOLUTIONS INC.

Notes to the Unaudited Condensed Consolidated Interim Financial Statements

As at and for the period ended June 30, 2022

(Expressed in Canadian dollars unless otherwise stated)

Critical accounting estimates relate primarily to the use of the going concern assumption, estimated useful lives and the valuation of intellectual property, property and equipment and the measurement of stock-based compensation expense.

2. Significant Accounting Policies

Basis of Presentation

These condensed consolidated interim financial statements for the period ended June 30, 2022 have been prepared by management in accordance with generally accepted accounting principles of the United States of America (“US GAAP”).

Disclosures by Business Entities about Government Assistance

In June 2021 the Financial Accounting Standards Board issued new guidance that increases the transparency of government assistance including the disclosure of the types of assistance, and entity’s accounting for the assistance, and the effect of the assistance on an entity’s financial statements. The new guidance is effective for annual periods beginning after December 15, 2021. The Company adopted ASU 2021-10 on January 1, 2022.

[7]

NXT ENERGY SOLUTIONS INC.

Notes to the Unaudited Condensed Consolidated Interim Financial Statements

As at and for the period ended June 30, 2022

(Expressed in Canadian dollars unless otherwise stated)

Leases

During 2021, the Company determined that the amounts previously recorded for the Aircraft lease were calculated incorrectly and the United States Dollar denominated lease liability had not been re-measured to Canadian Dollars each reporting period as required. The result of these corrections are to reduce the value of both the Right of use assets and Lease obligations, with changes to related income statement. The Company has determined that the effect of these adjustments are not material. The Company has recorded the adjustments in the related accounts in the comparative periods in these financial statements. On the balance sheet and income statement, the specific accounts affected are Deposits, Right of use assets, Current portion of lease obligations, Long-term lease obligations, Deficit, SFD^® related costs, Interest income (expense), and Foreign exchange loss (gain). The loss per share in each of the comparative periods did not change as a result of these immaterial corrections. The table below highlights the changes to each account in the comparative periods presented in these condensed consolidated interim financial statements. The disclosure in note 10 has also been revised.

Income Statement

For the three months ended June 30, 2021

As previously reported

Adjustments

Adjusted

SFD^® related costs

$ 383,211

$ (1,515 )

$ 381,696

Interest (income) expense

9,036

(615 )

8,421

Foreign exchange loss (gain)

84,719

3,814

88,533

Net income

1,533,206

(1,684 )

1,531,522

Deficit

(84,044,575 )

50,090

(83,994,485 )

[8]

NXT ENERGY SOLUTIONS INC.

Notes to the Unaudited Condensed Consolidated Interim Financial Statements

As at and for the period ended June 30, 2022

(Expressed in Canadian dollars unless otherwise stated)

Income Statement

For the six months ended June 30, 2021

As previously reported

Adjustments

Adjusted

SFD^® related costs

$ 648,694

$ (1,383 )

$ 647,311

Interest (income) expense

15,151

(1,224 )

13,927

Foreign exchange loss (gain)

104,929

8,032

112,961

Net income

(110,345 )

(5,425 )

(115,770 )

Deficit

(84,044,575 )

50,090

(83,994,485 )

Consolidated Statement of Cash Flows

In the preparation of the annual financial statements as at and for the year ended December 31, 2021, the Company has determined that certain amounts previously recorded were not correctly calculated in the consolidated statements of cash flows for the three and six months ended June 30, 2021. Not properly reflected were the payments on the financial liability, lease obligation payments and accretion, and application of exchange rates to calculate unrealized foreign exchange (gain) loss including the effect of foreign exchange on changes on cash and cash equivalents. The adjustments to correct the respective financial statement line items are not material and did not change the Cash, SFD^® related revenues, or Net income (loss) accounts or basic and diluted loss per share. The Company has recorded the adjustments in the related line items in each of the comparative periods. Line items affected on the Consolidated Statement of Cash Flows by the adjustment are: Non-cash lease costs, Change in the carrying amount of right of use assets and lease liabilities, unrealized foreign exchange (gain) loss, Repayment of financial liability and finance lease obligations, Proceeds from (used in) short-term investments, and Effect of foreign exchange rate changes on cash and cash equivalents. The table below highlights the changes to each line item in each of the comparative periods.

[9]

NXT ENERGY SOLUTIONS INC.

Notes to the Unaudited Condensed Consolidated Interim Financial Statements

As at and for the period ended June 30, 2022

(Expressed in Canadian dollars unless otherwise stated)

Consolidated Statements of cash flows

For the three months ended June 30, 2021

As previously reported

Adjustments

Adjusted

Net income

$ 1,533,206

$ (1,684 )

$ 1,531,522

Non-cash lease costs

(42,825 )

39,891

(2,934 )

Change in carrying amount of right of use assets & lease liabilities

-

5,550

5,550

Unrealized foreign exchange (gain) loss

122,413

(7,118 )

115,295

Operating activities

729,564

36,638

766,202

Repayment of financial liability and lease obligations

-

(36,638 )

(36,638 )

Financing activities

1,016,590

(36,638 )

979,952

Net increase (decrease) in cash and cash equivalents

1,505,768

-

1,505,768

Consolidated Statements of cash flows

For the six months ended June 30, 2021

As previously reported

Adjustments

Adjusted

Net loss

$ (110,345 )

$ (5,425 )

$ (115,770 )

Non-cash lease costs

(85,649 )

79,781

(5,868 )

Change in carrying amount of right of use assets & lease liabilities

-

11,851

11,851

Unrealized foreign exchange (gain) loss

147,942

(13,378 )

134,564

Operating activities

(153,756 )

72,829

(80,927 )

Repayment of financial liability and lease obligations

-

(72,829 )

(72,829 )

Financing activities

1,036,225

(72,829 )

963,396

Net increase (decrease) in cash and cash equivalents

818,845

-

818,845

[10]

NXT ENERGY SOLUTIONS INC.

Notes to the Unaudited Condensed Consolidated Interim Financial Statements

As at and for the period ended June 30, 2022

(Expressed in Canadian dollars unless otherwise stated)

3. Accounts Receivable

June 30,

December 31,

2022

2021

Trade receivables

$ 386,499

$ 806,460

Other receivables

45,796

35,107

432,295

841,567

Allowance for doubtful accounts

-

-

Net accounts receivable

432,295

841,567

The entire trade receivable was with one client as at June 30, 2022 and December 31, 2021. Trade receivables were 181 days past due as at June 30, 2022.

[11]

NXT ENERGY SOLUTIONS INC.

Notes to the Unaudited Condensed Consolidated Interim Financial Statements

As at and for the period ended June 30, 2022

(Expressed in Canadian dollars unless otherwise stated)

4. Right of use assets

June 30, 2022

Cost

Accumulated

Right of

Base

Amortization

Use

Aircraft

$ 1,847,617

$ 1,260,073

$ 587,544

Office Building

1,725,414

789,439

935,975

Printer

17,794

15,345

2,449

3,590,825

2,064,857

1,525,968

December 31, 2021

Cost

Accumulated

Right of

Base

Amortization

Use

Aircraft

$ 1,870,808

$ 1,073,365

$ 797,443

Office Building

1,805,447

664,372

1,141,075

Printer

17,794

13,060

4,734

3,694,049

1,750,797

1,943,252

In the fourth quarter of 2021, the Company determined it was reasonably certain it would extend the term of its Aircraft Leasing Agreement effective in the second quarter of 2022 for a period of 24 months with payments of approximately US$22,500 (CDN$28,675) per month, or US$270,000 (CDN$344,099) per year. The incremental borrowing rate is 11.2%. The Company recognized an additional $615,737 Aircraft ROU assets and US$493,166 ($615,570) additional Lease obligations at December 31, 2021. Should NXT want to repurchase the aircraft at the end of the extended term, the purchase price will be US$1.21 million.

On March 15, 2022, the Company surrendered 826 square feet of its office building lease to the landlord. The Company incurred a surrender fee of $14,000. The Company derecognized the following amounts on its balance sheet in the first quarter.

Right of Use Assets

$ 80,033

Lease obligations

83,095

[12]

NXT ENERGY SOLUTIONS INC.

Notes to the Unaudited Condensed Consolidated Interim Financial Statements

As at and for the period ended June 30, 2022

(Expressed in Canadian dollars unless otherwise stated)

5. Intellectual property

Acquisition of SFD^® Geothermal Right

The Company acquired the SFD^® technology rights for geothermal resources (“Geothermal Right”) from Mr. George Liszicasz, President and CEO of NXT (“CEO”) on April 18, 2021. The consideration deliverable by the Company in connection with the acquisition of the Geothermal Right is set forth below:

1.

US$40,000 (CAD$50,310) signature payment, which became due immediately and was paid on April 22, 2021;

2.

300,000 common shares, which were issued in December 2021;

3.

CAD$15,000 signature milestone payment paid in August 2021;

4.

US$200,000 milestone payment which will become due in the event that the Company's cash balance exceeds CAD$5,000,000 due to receipt of specifically defined funds from operations; and

5.

US$250,000 milestone payment which will become due in the event that the Company executes and completes and receives full payment for an SFD^® contract valued at US$10,000,000 or greater, provided such contract is entered into and completed and payment of at least US$5,000,000 is received by April 18, 2023.

As of June 30, 2022, the Company has recognized $275,610 for the acquisition Geothermal Right which is the combination of the US$40,000 (CAD$50,310) and CAD$15,000 signature payments, the value of the 300,000 common shares of $207,300 and other costs of $3,000. Before the 300,000 common shares were issued by the Company, the value of the common shares was recorded as Contributed capital. Upon Toronto Stock Exchange (the “TSX”) approval, the amount recognized of $207,300 less issuance costs of $42,697 were reclassified to common shares. The cost of the remaining two milestones will be recognized when it is deemed probable that these two milestones will be achieved by a special committee of the Board of Directors, comprised entirely of independent directors. The Board of Directors delegated authority to the special committee to determine when the milestones have been achieved. As of June 30, 2022 the remaining two milestones are still deemed not probable of being achieved.

The current book value of the Geothermal Right is being amortized on a straight line basis over its estimated useful life of 20 years. The annual amortization expense expected to be recognized is approximately $13,781 per year for a 5 year aggregate total of approximately $68,902.

[13]

NXT ENERGY SOLUTIONS INC.

Notes to the Unaudited Condensed Consolidated Interim Financial Statements

As at and for the period ended June 30, 2022

(Expressed in Canadian dollars unless otherwise stated)

SFD® Hydrocarbon Right

During 2015, NXT acquired the rights to the SFD^® technology for use in the exploration of hydrocarbons (“Hydrocarbon Right”) from the CEO, and recorded the acquisition as an intellectual property asset on the balance sheet. The asset was recorded at the fair value of the consideration transferred, including the related tax effect of approximately $25.3 million.

The Hydrocarbon Right is being amortized on a straight line basis over its estimated useful life of 15 years. The annual amortization expense expected to be recognized is approximately $1.7 million per year for a 5 year aggregate total of $8.5 million.

June 30, 2022

Cost

Accumulated

Net book

Base

amortization

Value

SFD^® Hydrocarbon Right acquired

$ 25,271,000

$ 11,512,767

$ 13,758,233

SFD^® Geothermal Right acquired

275,610

16,077

259,533

25,546,610

11,528,844

14,017,766

December 31, 2021

Cost

Accumulated

Net book

Base

amortization

Value

SFD^® Hydrocarbon Right acquired

$ 25,271,000

$ 10,670,400

$ 14,600,600

SFD^® Geothermal Right acquired

275,610

9,187

266,423

25,546,610

10,679,587

14,867,023

[14]

NXT ENERGY SOLUTIONS INC.

Notes to the Unaudited Condensed Consolidated Interim Financial Statements

As at and for the period ended June 30, 2022

(Expressed in Canadian dollars unless otherwise stated)

6. Accounts payable and accrued liabilities

June 30,

December 31,

2022

2021

Accrued liabilities related to:

Consultants and professional fees

$ 289,205

$ 203,732

Payroll

318,342

79,544

Board of director’s fees

77,500

-

Expenses owed to an executive officer (Note 16)

2,545

11,467

Vacation Accrued

108,082

102,536

795,674

397,279

Trade payables and other

63,090

103,346

858,764

500,625

7. Lease obligation

June 30,

December 31,

2022

2021

Aircraft

$ 508,941

$ 712,762

Office Building

958,437

1,185,356

Printer

2,201

4,486

1,469,579

1,902,604

Current portion of lease obligations

574,058

532,936

Long-term lease obligations

895,521

1,369,668

[15]

NXT ENERGY SOLUTIONS INC.

Notes to the Unaudited Condensed Consolidated Interim Financial Statements

As at and for the period ended June 30, 2022

(Expressed in Canadian dollars unless otherwise stated)

Maturity of lease liabilities:

Weighted Average

Remaining Lease Term

2022

$ 346,911

2.7 years

2023

689,321

2.3 years

2024

377,545

1.7 years

2025

256,104

0.8 years

Total lease payments

1,669,881

Less imputed interest

(200,302 )

Total discounted lease payments

1,469,579

Current portion of lease obligations

574,058

Non-current portion of lease obligations

895,521

Lease Term

Option to Extend

Incremental Borrowing Rate

Aircraft

April 2024

Executed

11.2 %

Office Building

September 2025

No

6.1 %

Printer

November 2022

No

7.4 %

The Company’s total lease expenditures for the six month period ended June 30, 2022 was $450,763 (2021 - $484,266).

8. Commitments

The table below is the non-lease operating cost components associated with the costs of the building lease.

For the fiscal period ending December 31,

Office

Premises

2022

$ 111,248

2023

222,496

2024

222,496

2025

166,872

723,112

[16]

NXT ENERGY SOLUTIONS INC.

Notes to the Unaudited Condensed Consolidated Interim Financial Statements

As at and for the period ended June 30, 2022

(Expressed in Canadian dollars unless otherwise stated)

9. Common shares

The Company is authorized to issue an unlimited number of common shares, of which the following are issued and outstanding:

For the three months

For the six months

ended June 30, 2022

ended June 30, 2021

# of shares

$ amount

# of shares

$ amount

As at the beginning of the period

65,250,710

$ 95,779,352

64,437,790

$ 95,327,123

Issuance for Employee Share Purchase Plan

91,065

52,066

118,515

65,698

As at the end of the period

65,341,775

95,831,418

64,556,305

95,392,821

10. Earnings (Loss) per share

For the three months

For the six months

ended June 30,

ended June 30,

2022

2021

2022

2021

(Adjusted – Note 2)

(Adjusted – Note 2)

Net income (loss) for the period

$ (1,774,671 )

$ 1,531,522

(3,615,539 )

(115,770 )

Weighted average number of shares outstanding for the period:

Basic

65,330,821

64,526,430

65,307,012

64,499,475

Diluted

65,330,821

66,007,218

65,307,012

64,499,475

Net Income (loss) per share – Basic

$ (0.03 )

$ 0.02

$ (0.06 )

$ 0.00

Net Income (loss) per share – Diluted

$ (0.03 )

$ 0.02

$ (0.06 )

$ 0.00

In periods in which a loss results, all outstanding stock options are excluded from the diluted loss per share calculations as their effect is anti-dilutive.

[17]

NXT ENERGY SOLUTIONS INC.

Notes to the Unaudited Condensed Consolidated Interim Financial Statements

As at and for the period ended June 30, 2022

(Expressed in Canadian dollars unless otherwise stated)

11. Share based compensation

The Company has an equity compensation program in place for its executives, employees and directors. Executives and employees are given equity compensation grants that vest based on a recipient's continued employment. The Company’s stock-based compensation awards outstanding as at June 30, 2022, include stock options, restricted stock units (“RSUs”), deferred share units (“DSUs”) and the employee share purchase plan (“ESP Plan”). The following tables provide information about stock option, RSU, DSU, and ESP Plan activity.

For the three months ended

June 30,

For the six months ended

June 30,

2022

2021

2022

2021

Stock Option Expense

$ 7,552

$ 7,500

$ 15,052

$ 11,250

Restricted Stock Units

90,368

19,595

126,654

19,546

Employee Share Purchase Plan

10,265

25,562

22,995

48,357

Total stock based compensation expense

108,185

52,657

164,701

79,153

Stock Options:

The following is a summary of stock options which are outstanding as at June 30, 2022.

Exercise price

per share

# of options

outstanding

# of options

exercisable

Average remaining

life (in years)

$0.44

21,360

21,360

4.0

$0.51

16,000

16,000

3.3

$0.52

100,000

100,000

2.1

$0.55

30,000

30,000

2.6

$0.59

150,000

150,000

1.3

$0.62

18,050

18,050

4.5

$0.68

14,750

14,750

4.3

$0.68

17,500

17,500

5.0

$0.72

24,460

24,460

4.9

392,120

392,120

2.5

[18]

NXT ENERGY SOLUTIONS INC.

Notes to the Unaudited Condensed Consolidated Interim Financial Statements

As at and for the period ended June 30, 2022

(Expressed in Canadian dollars unless otherwise stated)

A continuity of the number of stock options which are outstanding at the end of the current period and as at the prior fiscal year ended December 31, 2021 is as follows:

For the six months ended

For the year ended

June 30, 2022

December 31, 2021

weighted

Weighted

# of stock

average

# of stock

Average

options

exercise price

options

exercise price

Options outstanding, start of the year

358,660

$0.56

421,000

$0.83

Granted

64,860

$0.70

62,660

$0.56

Expired

-

-

(125,000 )

$(1.48 )

Cancelled

(31,400 )

$(0.51 )

-

-

Options outstanding, end of the year

392,120

$0.57

358,660

$0.56

Options exercisable, end of the year

392,120

$0.57

358,660

$0.56

Stock options granted generally expire, if unexercised, five years from the date granted and entitlement to exercise them generally vests at a rate of one-third at the end of each of the first three years following the date of grant.

Stock based compensation expense (“SBCE”) is calculated based on the fair value attributed to grants of stock options using the Black-Scholes valuation model and utilizing the following weighted average assumptions:

June 30,

December 31,

For the period ended

2022

2021

Expected dividends paid per common share

Nil

Nil

Expected life in years

5.0

5.0

Weighted average expected volatility in the price of common shares

76 %

150 %

Weighted average risk free interest rate

2.73 %

0.15 %

Weighted average fair market value per share at grant date

$0.64

$0.49

Intrinsic (or “in-the-money”) value per share of options exercised

$-

$-

[19]

NXT ENERGY SOLUTIONS INC.

Notes to the Unaudited Condensed Consolidated Interim Financial Statements

As at and for the period ended June 30, 2022

(Expressed in Canadian dollars unless otherwise stated)

Deferred Stock Units:

A continuity of the number of DSUs which are outstanding at the end of the current period and as at the prior fiscal year ended December 31, 2021 are as follows:

For the six months

ended

For the year

ended

Opening balance

June 30, 2022

December 31, 2021

Opening balance

37,354

37,354

Granted

-

-

Closing balance

37,354

37,354

The DSUs plan is a long-term incentive plan that permits the grant of DSUs to qualified directors. DSUs granted under the DSUs plan are to be settled at the retirement, resignation or death of the Board member holding the DSUs

Restricted Stock Units:

RSUs entitle the holder to receive, at the option of the Company, either the underlying number of shares of the Company's Common Stock upon vesting of such units or a cash payment equal to the value of the underlying shares. The RSUs vest at a rate of one-third at the end of each of the first three years following the date of grant. In the third quarter of 2021, the Company settled the RSUs that vested with shares and cash, and intends to continue to settle the RSUs in shares and cash.

[20]

NXT ENERGY SOLUTIONS INC.

Notes to the Unaudited Condensed Consolidated Interim Financial Statements

As at and for the period ended June 30, 2022

(Expressed in Canadian dollars unless otherwise stated)

A continuity of the number of RSUs, including fair value (“FV”) which are outstanding at the end of the current period and as the end of the prior fiscal year ended December 31, 2021 is as follows:

For the six months ended,

For the year ended,

June 30, 2022

December 31, 2021

# of RSUs

FV/Unit

# of RSUs

FV/Unit

RSUs outstanding, start of the period

696,666

$ 0.61

1,200,000

$ 0.79

Granted

-

-

-

-

Common shares issued

-

-

(208,370 )

$ (0.55 )

Payroll withholdings settled in cash

-

-

(139,964 )

$ (0.55 )

Forfeited

-

-

(155,000 )

$ (0.79 )

RSUs outstanding, end of the period

696,666

$ 0.68

696,666

$ 0.61

Employee Share Purchase Plan:

The ESP Plan allows employees and other individuals determined by the Board to be eligible to contribute a minimum of 1% and a maximum of 10% of their earnings to the plan for the purchase of common shares in the capital of the Company, of which the Company will make an equal contribution. Common shares contributed by the Company may be issued from treasury or acquired through the facilities of the TSX. During 2022 and 2021 the Company has elected to issue common shares from treasury.

A continuity of the number of commons shares under the ESP Plan which are outstanding at the end of the current period and as at the prior fiscal year ended December 31, 2021 is as follows:

For the six months ended,

For the year ended,

June 30, 2022

December 31, 2021

# of shares

$ amount

# of shares

$ amount

Purchased by employees

50,845

$ 29,070

127,790

$ 69,260

Matched by the Company

40,220

22,996

102,641

55,733

Bonus match by the Company

-

-

74,119

48,030

Total Common Shares issued

91,065

52,066

304,550

173,023

If the employee does not withdraw common shares from the ESP Plan in the first year of their participation, the Company will match an additional 100% of the employee contributions, up to $15,000 per employee (the “Bonus Match”). The Company matched employee contributions for a total of $52,867, less any payroll withholdings in 2021. As at June 30, 2022 the Company has accrued $nil for the Bonus Match ($nil as at December 31, 2021).

[21]

NXT ENERGY SOLUTIONS INC.

Notes to the Unaudited Condensed Consolidated Interim Financial Statements

As at and for the period ended June 30, 2022

(Expressed in Canadian dollars unless otherwise stated)

12. Financial instruments

a) Non-derivative financial instruments:

The Company's non-derivative financial instruments consist of cash and cash equivalents, short-term investments, accounts receivable, deposits, accounts payables and accrued liabilities, long-term debt and lease obligations. The carrying value of these financial instruments, excluding lease obligations and long-term debt, approximates their fair values due to their short terms to maturity.

Credit Risk

Credit risk arises from the potential that the Company may incur a loss if counterparty to a financial instrument fails to meet its obligation in accordance with agreed terms. The Company’s financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents, short-term investments and accounts receivable. The carrying value of cash and cash equivalents, short-term investments, and accounts receivable reflects management’s assessment of credit risk. At June 30, 2022, cash and cash equivalents and short-term investments included balances in bank accounts, term deposits and guaranteed investment certificates, placed with financial institutions with investment grade credit ratings. The majority of the Company’s accounts receivable relate to sales to one customer in the African region and is exposed to foreign country credit risks. The Company manages this credit risk by requiring advance payments before entering into certain contract milestones and when possible accounts receivable insurance.

Foreign Exchange Risk

The Company is exposed to foreign exchange risk in relation to its holding of significant US$ balances in cash and cash equivalents, accounts receivable, deposits, accounts payables, accrued liabilities, and lease obligations, and entering into United States dollar revenue contracts. The Company does not currently enter into hedging contracts, but to mitigate exposure to fluctuations in foreign exchange the Company uses strategies to reduce the volatility of United States Dollar assets including converting excess United States dollars to Canadian dollars. As at June 30, 2022, the Company held net U.S. dollar assets totaling US$273,150. Accordingly, a hypothetical 10% change in the value of one United States dollar expressed in Canadian dollars as at June 30, 2022 would have had an approximately $35,191 effect on the unrealized foreign exchange gain or loss for the period.

[22]

NXT ENERGY SOLUTIONS INC.

Notes to the Unaudited Condensed Consolidated Interim Financial Statements

As at and for the period ended June 30, 2022

(Expressed in Canadian dollars unless otherwise stated)

b) Derivative financial instruments

As at June 30, 2022 and December 31, 2021, the Company held no derivative financial instruments.

13. Change in non-cash operating working capital

The changes in non-cash operating working capital balances are comprised of:

For the three months

ended June 30,

For the six months

ended June 30,

2022

2021

2022

2021

Accounts receivable

148,679

$ (1,211,836 )

$ 413,439

$ (956,003 )

Prepaid expenses and deposits

202,891

(57,212 )

212,151

(70,995 )

Accounts payable and accrued liabilities

90,911

47,924

230,158

121,048

Contractual obligations

-

(127,507 )

-

(127,507 )

442,481

(1,348,631 )

855,748

(1,033,457 )

14. Geographic information

The Company generates revenue from its SFD^® survey system that enables the clients to focus their exploration decisions concerning land commitments, data acquisition expenditures and prospect prioritization on areas with the greatest potential. NXT conducts all of its survey operations from its head office in Canada, and occasionally maintains administrative offices in foreign locations if and when needed. Revenue fluctuations are a normal part of SFD^® survey system sales and can vary significantly year-over-year.

Revenues for the six month period ended June 30, 2021 were generated solely from a single client and the Hydrocarbon Right. There were no revenues from the Geothermal Right.

For the three months ended

June 30,

For the six months ended

June 30,

2022

2021

2022

2021

Africa

$ -

$ 3,144,373

$ -

$ 3,144,373

[23]

NXT ENERGY SOLUTIONS INC.

Notes to the Unaudited Condensed Consolidated Interim Financial Statements

As at and for the period ended June 30, 2022

(Expressed in Canadian dollars unless otherwise stated)

15. Government Grants

During the three and six month periods ended June 30, 2021, the Company received government grants through the Canada Emergency Wage Subsidy (“CEWS”) and the Canada Emergency Rent Subsidy (“CERS”). The CEWS and CERS were recognized as a reduction to general and administrative expenses.

For the three months

ended June 30,

For the six months

ended June 30,

2022

2021

2022

2021

CEWS

$ -

$ 149,028

$ -

$ 149,028

CERS

-

118,801

-

118,801

Government grants recognized

-

267,829

-

267,829

16. Other related party transactions

One of the members of NXT’s Board of Directors is a partner in a law firm which provides legal advice to NXT. Accounts payable and accrued liabilities includes a total of $28,162 ($16,000 as at December 31, 2021) payable to this law firm.

Accounts payable and accrued liabilities includes $2,545 ($11,467 as at December 31, 2021) related to reimbursement of expenses owing to an executive officer and $77,500 ($nil as at December 31, 2021) for Board of Director’s fees.

A company owned by a family member of an executive officer was contracted to provide presentation design services to the Company during 2021.

The Geothermal Right was acquired from the Company’s CEO on April 18, 2021. As discussed in Note 5, the Company acquired the Geothermal Right from its Chairman, President and Chief Executive Officer, Mr. Liszicasz.

For three months ended

June 30,

For the six-month period ended

June 30

2022

2021

2022

2021

Legal Fees

$ 19,491

$ 33,231

$ 30,456

$ 50,611

Design Services¹

-

-

-

4,013

1.

US$3000

[24]

EXHIBIT 99.2

NXT ENERGY SOLUTIONS INC.

Management’s Discussion and Analysis

For the three and six months ended

June 30, 2022

Management’s Discussion and Analysis

This management’s discussion and analysis (“MD&A”) was prepared by management of NXT Energy Solutions Inc. (“NXT”, “we”, “us”, “our” or the “Company”) based on information available as at August 11, 2022 unless otherwise stated, has been approved by the Board of Directors of the Company (the “Board”), and should be reviewed in conjunction with the unaudited condensed consolidated interim financial statements and related notes for the period ended June 30, 2022 (the “unaudited condensed consolidated interim financial statements”). This MD&A covers the unaudited three and six month periods ended June 30, 2022, with comparative amounts for the unaudited three and six month periods ended June 30, 2021.

Our functional and reporting currency is the Canadian dollar. All references to “dollars”, “$” and “CDN$” in this MD&A are to Canadian dollars unless specific reference is made to United States dollars (“US$”).

NXT^® and SFD^®are registered trademarks of NXT in Canada and the United States.

Advisories

Forward-looking Information

Certain statements contained in this MD&A constitute “forward-looking information” within the meaning of applicable securities laws. These statements typically contain words such as “anticipate”, “believe”, “could”, “estimate”, “expect”, “intend”, “may”, “plan”, “predict”, “will”, “continue” and similar words and phrases suggesting future outcomes or an outlook. Forward-looking statements in this document includes, but is not limited to:

	·	payment of the Consideration (as defined below), and the satisfaction of the conditions thereto (including with respect to cash balances, receipt of funds, and the execution and completion of contracts);
	·	the development, commercialization, and protection of the SFD^® technology for geothermal resource exploration;
	·	the extent to which expanding the Company’s scope of business to include exploring for both hydrocarbon and geothermal resources is anticipated to result in an expansion of its scope of revenue sources;
	·	the Company’s pursuit of opportunities to secure new revenue contracts;
	·	estimates related to our future financial position and liquidity including certain contractual obligations; and
	·	general business strategies and objectives.

Such forward-looking information is based on a number of assumptions which may prove to be incorrect. Assumptions have been made with respect to the following matters, in addition to any other assumptions identified in this document:

	·	our ability to develop and market our SFD^® technology and services to current and new customers;
	·	our ability to source personnel and equipment in a timely manner and at an acceptable cost;

NXT Energy Solutions Inc.		page \| 2
MD&A for the period ended June 30, 2022

	·	our ability to obtain all permits and approvals required;
	·	our ability to obtain financing on acceptable terms;
	·	our ability to obtain insurance to mitigate the risk of default on client billings;
	·	foreign currency exchange and interest rates; and
	·	general business, economic, and market conditions (including global commodity prices).

Although NXT believes that the expectations reflected in such forward-looking information are reasonable, undue reliance should not be placed on them as NXT can give no assurance that such expectations will prove to be correct. Forward-looking information is based on expectations, estimates, and projections that involve a number of risks and uncertainties, which could cause actual results to differ materially from those anticipated by NXT and are described in the forward-looking information. Material risks and uncertainties include, but are not limited to:

	·	the ability of management to execute its business plan, including their ability to secure new revenue contracts;
	·	health, safety, and the environment (including risks related to the COVID-19 pandemic);
	·	our ability to develop and commercialize the geothermal technology;
	·	our ability to service existing debt;
	·	our ability to protect and maintain our intellectual property (“IP”) and rights to our SFD^® technology;
	·	our reliance on a limited number of key personnel;
	·	our reliance on a limited number of aircraft;
	·	our reliance on a limited number of clients;
	·	counterparty credit risk;
	·	foreign currency and interest rate fluctuations;
	·	the likelihood that the Company’s ICFR (as defined below) will prevent or detect material misstatements in our unaudited condensed consolidated interim financial statements;
	·	changes in, or in the interpretation of, laws, regulations, or policies; and
	·	general business, economic, and market conditions (including global commodity prices).

For more information relating to risks, see the section titled “Discussion of Operations – Risk and Uncertainties” in this MD&A and the section titled “Risk Factors” in NXT’s most recently filed Annual Information Form. Except as required by applicable securities law, NXT undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise. Accordingly, the reader is cautioned not to place undue reliance on forward-looking statements.

Financial outlooks are provided for the purpose of understanding the Company’s accounting practices and liquidity position, and the information may not be appropriate for other purposes.

Non-GAAP Measures

NXT’s accompanying unaudited condensed consolidated interim financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). This MD&A includes references to net working capital, which does not have a standardized meaning prescribed by US GAAP and may not be comparable to similar measures being presented by other entities. Net working capital is the net result of the difference between current assets and current liabilities, and can be used by investors and management to assess liquidity at a particular point in time. See “Liquidity and Capital Resources – Net Working Capital” for further information.

NXT Energy Solutions Inc.		page \| 3

MD&A for the period ended June 30, 2022

Description of the Business

NXT Energy Solutions Inc. is a Calgary-based technology company whose proprietary and patented Stress Field Detection (“SFD^®”) survey system utilizes quantum-scale sensors to detect gravity field perturbations in an airborne survey method, which can be used both onshore and offshore to remotely identify traps and reservoirs with hydrocarbon and geothermal exploration potential. The SFD^® survey system enables NXT’s clients to focus their exploration decisions concerning land commitments, data acquisition expenditures, and prospect prioritization on areas with the greatest potential. SFD^® is environmentally friendly and unaffected by ground security issues or difficult terrain and is the registered trademark of NXT. NXT provides its clients with an effective and reliable method to reduce time, costs, and risks related to exploration.

Financial and Operational Highlights

Key financial and operational highlights for Q2-22 are summarized below:

	·	cash and short-term investments at June 30, 2022 were $1.12 million;
	·	net working capital was $0.05 million at June 30, 2022;
	·	the Company recorded SFD^®-related revenues of $nil and received US$0.13 million (CDN$0.16 million) of payments on outstanding accounts receivable in April 2022;
	·	a net loss of $1.77 million was recorded for Q2-22, including stock-based compensation expense (“SBCE”) and amortization expense of $0.55 million;
	·	a net loss of $3.62 million was recorded for YTD 2022, including SBCE and amortization expense of $1.05 million;
	·	net loss per common share for Q2-22 was $0.03 basic and $0.03 diluted;
	·	net loss per common share for YTD 2022 was $0.06 basic and $0.06 diluted;
	·	cash flow used in operating activities was $0.78 million during Q2-22 and $1.70 during YTD 2022;
	·	general and administrative (“G&A”) expenses increased by $0.36 million (53%) as compared to Q2-21; and
	·	G&A expenses increased by $0.38 million (24%) as compared to YTD 2021.

NXT Energy Solutions Inc.		page \| 4

MD&A for the period ended June 30, 2022

Discussion of Operations

COVID-19 Pandemic

As of the date of the unaudited condensed consolidated interim financial statements, the Covid-19 pandemic continues to be a risk to the operations of the Company. The Company has made provisions so employees can work safely in the office or if necessary from home, followed all Alberta Health Services and Health Canada recommendations, and implemented hygiene policies. Demand for our services and prospective revenues may become adversely impacted the longer the Covid-19 pandemic continues. The impact of the continuation of the Covid-19 pandemic may hamper our ability to deliver SFD^®-related revenues in the following ways. If restrictions on international travel become tighter, our aircraft and personnel may not be able to perform project surveys. An outbreak of the virus among our staff or our customers’ personnel could delay any survey in progress. Business development may be delayed when in-person meetings and technical presentations may be a superior delivery method to tele-conferences or online video conferencing.

The situation is dynamic and the ultimate duration and magnitude of the impact on the financial effect to the Company is not known at this time. Estimates and judgments made by management in the preparation of the unaudited condensed consolidated interim financial statements are subject to a higher degree of measurement uncertainty during this period.

Acquisition of the Geothermal Right

The Company acquired the SFD^® technology rights for geothermal resources (“Geothermal Right”) from Mr. George Liszicasz, President and Chief Executive Officer of NXT (“CEO”) on April 18, 2021. The consideration deliverable by the Company in connection with the acquisition of the Geothermal Right is set forth below (the “Consideration”):

	1.	US$40,000 (CDN$50,310) signature payment, which became due immediately and was paid on April 22, 2021;
	2.	300,000 common shares, which were issued in December 2021;
	3.	CDN$15,000 signature milestone payment paid in August 2021;
	4.	US$200,000 milestone payment, which will become due in the event that the Company’s cash balance exceeds CDN$5,000,000 due to receipt of specifically defined funds from operations; and
	5.	US$250,000 milestone payment, which will become due in the event that the Company executes and completes and receives full payment for an SFD^® contract valued at US$10,000,000 or greater, provided such contract is entered into and completed and payment of at least US$5,000,000 is received by April 18, 2023.

As of June 30, 2022, the Company has recognized $275,610 for the acquisition Geothermal Right, which is the combination of the US$40,000 (CDN$50,310) and CDN$15,000 signature payments, the value of the 300,000 common shares of $207,300 and other costs of $3,000. The cost of the remaining two milestones will be recognized when it is deemed probable that these two milestones will be achieved by a special committee of the Board, comprised entirely of independent directors. The Board delegated authority to the special committee to determine when the milestones have been achieved.

NXT Energy Solutions Inc.		page \| 5

MD&A for the period ended June 30, 2022

Geothermal Right Development Update

Progress continues with respect to the development of the SFD-GT geothermal sensor family. The objective of this project was to test, identify, and analyze the desired elements of the SFD^® geothermal sensor response over known geothermal areas with the ultimate goal of providing a green upstream geophysical service for advancing renewable power initiatives in Canada and abroad. The agreed project work was completed in November 2021 with total funding of $50,000 from the National Research Council of Canada Industrial Research Assistance Program (“NRC IRAP”). The Company is currently working with NRC IRAP to develop a funding and research plan for the next phase to support the research and development of the SFD^® technology for geothermal applications.

Patents

In Q1-22, NXT announced its patent application in Brazil has been allowed. As of the date of this MD&A, NXT has been granted SFD^® patents in Brazil (February 2022), India (July 2021), Russia (January 2017), Japan (July 2017), Canada (August 2017), Mexico (September 2017), the United States (two patents were granted in November 2017 and September 2018, respectively), China (April 2018), and Europe (January 2020). In total, NXT has obtained SFD^® patents or received patent allowances in 46 countries. These patents protect our proprietary SFD^® technology and serve as independent third-party recognition of our technological invention in terms of practical applicability, conceptual novelty, and knowledge advancement.

Summary of Operating Results (Q2-21 and YTD 2021 Adjusted)

Please see the section “Correction of Prior Period Error”.

	Q2-22			Q2-21		YTD 2022			YTD 2021
SFD^®-related revenue	$	-		$	3,144,373	$	-		$	3,144,373
Expenses:
SFD^®-related costs, net		306,492			381,696		743,774			647,311
General and administrative expenses		1,046,677			682,851		1,959,227			1,583,160
Amortization		442,097			444,171		884,534			885,995
		1,795,266			1,508,718		3,587,535			3,116,466

Other Expenses (income):
Interest (income) expense, net		7,670			8,421		15,858			13,927
Foreign exchange loss (gain)		(31,355	)		88,533		(11,090	)		112,961
Intellectual property and other		3,090			7,179		23,236			16,789
		(20,595	)		104,133		28,004			143,677
Income (loss) before income taxes		(1,774,671	)		1,531,522		(3,615,539	)		(115,770	)

Income tax expense		-			-		-			-

Net income (loss) and comprehensive income (loss)		(1,774,671	)		1,531,522		(3,615,539	)		(115,770	)

Net income (loss) per share – basic	$	(0.03	)	$	0.02	$	(0.06	)	$	(0.00	)
Net income (loss) per share – diluted	$	(0.03	)	$	0.02	$	(0.06	)	$	(0.00	)

NXT Energy Solutions Inc.		page \| 6

MD&A for the period ended June 30, 2022

Quarterly operating results. Net loss for Q2-22 compared to Q2-21 decreased by $3,306,193, or $0.05 per share-basic. SFD^®-related revenues in Q2-21 were from the delivery of the pre-existing SFD^® data sale in Q2-21. SFD^®-related costs, net, were $75,204 lower due as survey interpretation costs were incurred in Q2-21 to support the pre-existing SFD^® data sale. G&A expenses increased by $363,826, compared to Q2-21, due primarily to the termination of the Canada Emergency Wage Subsidy (“CEWS”) and the Canada Emergency Rent Subsidy (“CERS”) in Q4-21. Interest (income) expense, net changed by $751 in Q2-22 versus Q2-21 due to interest expense for the Business Development Bank of Canada’s (“BDC”) Highly Affected Sectors Credit Availability Program (the “HASCAP Loan”) in Q1-22, offset by the cessation of the financial liability related to the aircraft lease in Q1-22.

With respect to foreign exchange, the CDN$ weakened (3.2%) to the US$ in Q2-22 and strengthened (1.1%) in Q2-21 resulting in the related foreign exchange gain. IP and other expenses decreased $4,089 in Q2-22 related mostly to costs associated with finalizing certain SFD® patents during Q2-21.

Year-to-date operating results. Net loss for YTD 2022 compared to YTD 2021 increased by $3,499,769, or $0.06 per share-basic. SFD^®-related costs, net, were $96,463 higher due to the timing of routine maintenance costs to adding 300 available flight hours to the Company’s aircraft, offset by survey interpretation costs to support the pre-existing SFD^® data sale. G&A expenses increased by $376,067, or 24%, compared to YTD 2021, due primarily to the termination of the CEWS and the CERS in Q4-21. Interest (income) expense, net changed by $1,931 in YTD 2022 versus YTD 2021 due to the HASCAP Loan, offset by the cessation of the financial liability related to the aircraft lease. With respect to foreign exchange, the CDN$ weakened to the US$ in YTD 2022 and strengthened YTD 2021 resulting in the related foreign exchange gain. IP and other expenses increased $6,447 in YTD 2022 mostly due to the disposal of leasehold improvement assets related to the Company surrendering 826 square feet of its office space.

SFD®-Related Costs, Net (Q2-21 and YTD 2021 Adjusted)

Please see the section “Correction of Prior Period Error”.

SFD^®-Related Costs	Q2-22		Q2-21		Net change
Aircraft lease costs	$	107,123	$	101,999	$	5,124
Aircraft operations		198,848		185,195		13,653
Survey projects		521		94,370		(93,849	)
Total SFD^®-related costs, net		306,492		381,564		(75,072	)

SFD^®-Related Costs	YTD 2022		YTD 2021		Net change
Aircraft lease costs	$	228,594	$	207,588	$	21,006
Aircraft operations		514,059		325,645		188,414
Survey projects		1,121		114,078		(112,957	)
Total SFD^®-related costs, net		743,774		647,311		96,463

SFD^®-related costs include aircraft charter costs (net of charter hire reimbursements), lease expenses, and aircraft operation and maintenance costs. In Q2-22, SFD^®-related costs were lower compared to Q2-21 by $75,072 due to the costs incurred for the pre-existing data sale in Q2-21, offset by higher maintenance and pilot training costs in Q2-22.

NXT Energy Solutions Inc.		page \| 7

MD&A for the period ended June 30, 2022

YTD 2022 Aircraft lease costs were higher due to a weaker CDN$ to US$ exchange rate. Aircraft operations were $188,414 higher due to the timing of routine major preventive maintenance costs in Q1-22 and preparing the aircraft for up to 300 hours of flight hours to conduct SFD^® surveys. Finally, survey project costs were $112,957 lower due to the costs incurred for the pre-existing Data Sale in Q2-21.

The aircraft is available for charter to third parties through our aircraft manager when it is not being used by NXT. Any charter hire reimbursements received are used to offset aircraft costs.

The Company extended the term of its aircraft leasing agreement effective in Q2-22 for a period of 24 months with payments of approximately US$22,500 (CDN$28,987) per month, or US$270,000 (CDN$347,849) per year.

Should NXT want to repurchase the aircraft at the end of the extended term, the purchase price will be US$1.21 million.

General and Administrative Expenses

G&A Expenses	Q2-22		Q2-21		Net change		%
Salaries, benefits and consulting charges	$	434,609	$	297,485	$	137,124		46
Board and professional fees, public company costs		257,645		232,729		24,916		11
Premises and administrative overhead		211,752		99,277		112,475		113
Business development		34,486		703		33,783		>100
Stock-based compensation		108,185		52,657		55,528		>100
Total G&A Expenses		1,046,677		682,851		363,826		53

G&A Expenses	YTD 2022		YTD 2021		Net change		%
Salaries, benefits and consulting charges	$	892,711	$	770,940	$	121,771		16
Board and professional fees, public company costs		439,599		425,733		13,866		3
Premises and administrative overhead		424,781		302,177		122,604		41
Business development		37,435		5,157		32,278		>100
Stock-based compensation		164,701		79,153		85,548		>100
Total G&A Expenses		1,959,227		1,583,160		376,067		24

G&A expenses increased $363,826, or 53%, in Q2-22 compared to Q2-21 for the following reasons:

	·	salaries, benefits, and consulting charges increased $137,124, or 46%, as Q2-21 costs were reduced by CEWS and partially offset by lower vacation expense in Q2-22;
	·	board and professional fees and public company costs increased $24,916, or 11%, due to increased professional fees;
	·	premises and administrative overhead costs increased $112,475, or 113%, as Q2-21 costs were reduced by the CERS;
	·	business development costs for Q2-22 increased $33,783 from Q2-21 due to meetings with potential customers in Q2-22. There was no business development travel in Q2-21 due to the pandemic travel restrictions; and
	·	SBCE were higher in Q2-22 vs Q2-21 by $55,528 due to a higher Restricted Share Unit Plan (“RSU Plan”) expense as the estimated share price settlement was higher in Q2-22 versus Q2-21. This was offset by the Employee Share Purchase Plan (“ESP Plan”) expenses decreasing.

NXT Energy Solutions Inc.		page \| 8

MD&A for the period ended June 30, 2022

G&A expenses increased $376,067 or 24%, in YTD 2022 compared to YTD 2021 for the following reasons:

	·	salaries, benefits, and consulting charges increased $121,771 or 16%, as YTD 2021 costs were reduced by the CEWS and partially offset by lower vacation expense in YTD 2022;
	·	board and professional fees and public company costs increased $13,866, or 3%, due to increased professional fees;
	·	premises and administrative overhead costs increased $122,604, or 41%, as YTD 2021 costs were reduced by the CERS;
	·	business development costs for YTD 2022 increased $32,278 from YTD 2021 due to meetings with potential customers during Q2-22. There was no business development travel in YTD 2021 due to the pandemic travel restrictions; and
	·	SBCE were higher in YTD 2022 vs YTD 2021 by $85,548 due to a higher RSU Plan expense as the estimated share price settlement was higher in YTD 2022 than YTD 2021. This was offset by the ESP Plan expenses decreasing. Please see the next section “Discussion of Operations – General and Administrative Expenses – Stock-based Compensation Expenses” for further information on the SBCE.

Stock-based Compensation Expenses

Stock-based Compensation Expenses	Q2-22		Q2-21		Net change			% change
Stock Option Expense	$	7,552	$	7,500	$	52			1
Deferred Share Units		-		-		-			-
Restricted Stock Units		90,368		19,595		70,773			>100
ESP Plan		10,265		25,562		(15,297	)		(60	)
Total SBCE		108,185		52,657		55,528			105

Stock-based Compensation Expenses	YTD 2022		YTD 2021		Net change			% change
Stock Option Expense	$	15,052	$	11,250	$	3,802			34
Deferred Share Units		-		-		-			-
Restricted Stock Units		126,653		19,546		107,107			>100
ESP Plan		22,996		48,357		(25,361	)		(52	)
Total SBCE		164,701		79,153		85,548			108

SBCE varies in any given quarter or year as it is a function of several factors, including the number of units of each type of stock-based compensation plan issued in the period and the amortization term (based on the term of the contract and/or number of years for full vesting of the units, which is normally three years) of the resultant expense.

SBCE is also a function of periodic changes in the inputs used in the Black-Scholes option valuation model, such as volatility in NXT’s trailing common share price. For cash-settled stock-based compensation awards variability will occur based on changes to observable prices.

NXT Energy Solutions Inc.		page \| 9

MD&A for the period ended June 30, 2022

The deferred share unit (“DSUs”) plan (the “DSU Plan”) is a long-term incentive plan that permits the grant of DSUs to qualified directors. DSUs granted under the DSU Plan are to be settled at the retirement, resignation, or death of the Board member holding the DSUs.

Restricted Share Units (“RSUs”) entitle the holder to receive, at the option of the Company, either the underlying number of shares of the Company’s common shares upon vesting of such RSUs or a cash payment equal to the value of the underlying shares. The RSUs vest at a rate of one-third at the end of each of the first three years following the date of grant. In Q3-21, the Company settled the Q3-21 RSU vesting with common shares and cash, and intends to continue to settle the RSUs in common shares and cash.

The ESP Plan allows employees and other individuals determined by the Board to be eligible to contribute a minimum of 1% and a maximum of 10% of their earnings to the plan for the purchase of common shares in the capital of the Company, of which the Company will make an equal contribution. Common shares contributed by the Company may be issued from treasury or acquired through the facilities of the Toronto Stock Exchange. During 2021 and 2022 the Company has elected to issue common shares from treasury.

SBCE in Q2-22 was higher compared to Q2-21 by $55,528 or 105%. The main driver of the higher expense is the estimated vesting price for the RSU was $0.44 at Q2-21 versus $0.68 at Q2-22. This increase was offset partially since there was no ESP Plan bonus accrual in Q2-22, as all participants in the ESP Plan have been members of the plan for more than one year.

SBCE in YTD 2022 is higher compared to YTD 2021 by $85,548 or 108%. The main driver of the higher expense was a forfeiture in the RSU Plan in Q1-21 which reduced the RSU expenses. The estimated vesting price for RSUs was $0.44 at Q2-21 versus $0.68 at Q2-22 with one director electing to take all of their 2022 director fees in options versus only one half of the director fees in Q1-21. This increase was offset partially since there was no ESP Plan bonus accrual in YTD 2022, as all participants in the ESP Plan have been members of the ESP Plan for more than one year. No directors elected to participate in the DSU Plan in 2022 and 2021.

Amortization

Amortization	Q2-22		Q2-21		Net change			%
Property and equipment	$	17,468	$	20,641	$	(3,173	)		(15	)
Intellectual property		424,629		423,530		1,099			0
Total Amortization Expenses		442,097		444,171		(2,074	)		(0	)

Amortization	YTD 2022		YTD 2021		Net change			%
Property and equipment	$	35,277	$	41,282	$	(6,005	)		(15	)
Intellectual property		849,257		844,713		4,544			1
Total Amortization Expenses		884,534		885,995		(1,461	)		(0	)

NXT Energy Solutions Inc.		page \| 10

MD&A for the period ended June 30, 2022

Property and equipment and related amortization expense. Property and equipment amortization was lower in Q2-22 compared to Q2-21, and YTD 2022 compared to YTD 2021, due to additional assets becoming fully amortized during the period and the Company not acquiring new assets in the periods. Amortization also decreases each year as the Company uses the declining balance method of depreciation, thereby having the effect of lowering amortization each year on existing assets.

Intellectual property and related amortization expense. NXT acquired specific rights to utilize the proprietary SFD^® technology in global hydrocarbon exploration applications from the inventor of the SFD^® technology, NXT’s Chairman, President and CEO, on August 31, 2015. The value attributed to the acquired IP assets was $25.3 million. The IP assets are being amortized on a straight-line basis over a 15-year period (future amortization expense of $1,685,000 per year) and are also being subject to ongoing assessment of potential indicators of impairment of the recorded net book value. No impairments were recognized in YTD 2022 or YTD 2021.

As discussed in the section “Discussion of Operations – Acquisition of the Geothermal Right”, the Company acquired the SFD^® technology for the Geothermal Right from NXT’s Chairman, President and CEO on April 18, 2021. The Geothermal Right is being amortized on a straight line basis over its estimated useful life of 20 years. The annual amortization expense expected to be recognized is approximately $13,781 per year for a five-year aggregate total of $68,902.

Other Expenses (Income) (Q2-21 and YTD 2021 Adjusted)

Please see the section “Correction of Prior Period Error”.

Other Expenses	Q2-22			Q2-21		Net change			%
Interest (income) expense, net	$	7,670		$	8,421	$	(751	)		(9	)
Foreign exchange loss (gain)		(54,546	)		88,533		(143,079	)		(162	)
Intellectual property and other		3,090			7,179		(4,089	)		(57	)
Loss on disposal of assets & lease modifications		-			-		-			-
Total Other Expenses, net		(43,786	)		104,133		(147,919	)		(142	)

Other Expenses	YTD 2022			YTD 2021		Net change			%
Interest (income) expense, net	$	15,858		$	13,927	$	1,931			14
Foreign exchange loss (gain)		(34,281	)		112,961		(147,242	)		(130	)
Intellectual property and other		11,314			16,789		(5,475	)		(33	)
Loss on disposal of assets & lease modifications		11,922			-		11,922			100
Total Other Expenses, net		4,813			143,677		(138,864	)		(97	)

Interest (income) expense, net. This category of other expenses includes interest income earned on short-term investments netted, by interest expense from the financial liability related to the aircraft lease (up to February 2022) and long-term debt. Interest expense increased YTD 2022 due to the HASCAP loan, but was offset by the cessation of the financial liability in Q1-22.

Foreign exchange loss (gain). This category of other expenses includes losses and gains caused by changes in the relative currency exchange values of US$ and CDN$. The Company held significant net assets in US$ at June 30, 2022 and 2021, including accounts receivable, cash and cash equivalents, short-term investments, US$ lease obligations, and the security deposit for the aircraft, all of which have an effect on the unrealized foreign exchange gain and loss. At June 30, 2022, the CDN$ to US$ exchange rate was 3.2% lower as compared to the CDN$ to US$ exchange rate at March 31, 2022, resulting in the corresponding foreign exchange gain for Q2-22. At June 30, 2022, the CDN$ to US$ exchange rate was 1.1% lower as compared to the CDN$ to US$ exchange rate at December 31, 2021, resulting in the corresponding foreign exchange gain for YTD 2022.

NXT Energy Solutions Inc.		page \| 11

MD&A for the period ended June 30, 2022

At Q2-21, the CDN$ strengthened as compared to the US$ at December 31, 2020, resulting in the corresponding foreign exchange loss for Q2-21. Also, the CDN$ strengthened versus the US dollar in YTD 2021 resulting in the foreign exchange loss in YTD 2021.

The Company does not currently enter into hedging contracts, but does however use alternative strategies to reduce the volatility of US dollar assets including converting excess US dollars to CDN dollars.

IP and other. This category of other expenses primarily includes costs related to IP filings and research & development activity related to the SFD® technology.

In Q2-22 and YTD 2022, the Company’s IP and other expenses were associated with periodic patent maintenance and renewal fees required during these time periods.

Loss on disposal of assets & lease modifications. In Q1-22, the Company surrendered 826 square feet of office space. Please refer to the section “Contract Obligations” for a discussion on the office lease surrender. As a result of the space surrender, the Company recorded a loss on disposal of leasehold improvement assets and lease modifications.

Income Tax Expense

There was no income tax expense in YTD 2022 or YTD 2021.

Competition

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 and geothermal exploration.

Seismic is the standard technology used by the oil and 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.

NXT Energy Solutions Inc.		page \| 12

MD&A for the period ended June 30, 2022

The energy 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.

Risk and Uncertainties

Hydrocarbon and geothermal exploration operations involve a number of risks and uncertainties that have affected our unaudited condensed consolidated interim financial statements and are reasonably likely to affect them in the future. These risks and uncertainties are discussed further below.

Development, Commercialization, and Protection of the Geothermal Right

With the acquisition of the Geothermal Right, the Company will continue to refine and develop the SFD^® survey system to commercialize the Geothermal Right. This development requires substantial time and resources, and continued government assistance is not guaranteed. Furthermore, even if resources are available, there can be no assurance that the Company will be commercially or technically successful in enhancing the technology. If we are unable to develop and commercialize the geothermal applications of SFD^® technologies, or adapt to evolving industry standards and demands, these could have a material adverse effect on our business, financial condition, and results of operations.

Debt Service

NXT may finance a significant portion of its operations through debt. Amounts paid in respect of interest and principal on debt incurred by NXT may impair NXT’s ability to satisfy its other obligations. Variations in interest rates and scheduled principal repayments could result in significant changes in the amount required to be applied to debt service before payment by NXT of its debt obligations. Lenders may be provided with security over substantially all of the assets of NXT. If NXT becomes unable to pay its debt service charges or otherwise commits an event of default such as bankruptcy, a lender may be able to foreclose on or sell the assets of NXT.

Credit Risk

Credit risk arises from the potential that the Company may incur a loss if a counterparty to a financial instrument fails to meet its obligation in accordance with agreed terms. The Company’s financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents, short-term investments, and accounts receivable. The carrying value of cash and cash equivalents, short-term investments, and accounts receivable reflect management’s assessment of credit risk.

At June 30, 2022, cash and cash equivalents and short-term investments included balances in bank accounts, term deposits, and guaranteed investment certificates, placed with financial institutions with investment grade credit ratings. The majority of the Company’s accounts receivable relate to sales to one customer in the African region and is exposed to foreign country credit risks. The Company manages this credit risk by requiring advance payments before entering into certain contract milestones and when possible, accounts receivable insurance.

NXT Energy Solutions Inc.		page \| 13

MD&A for the period ended June 30, 2022

Foreign Exchange Risk

The Company is exposed to foreign exchange risk in relation to its holding of significant US$ balances in cash and cash equivalents, accounts receivable, deposits, accounts payables, accrued liabilities and lease obligations, and entering into United States dollar revenue contracts. The Company does not currently enter into hedging contracts, but to mitigate exposure to fluctuations in foreign exchange, the Company uses strategies to reduce the volatility of United States dollar assets including converting excess United States dollars to Canadian dollars. As at June 30, 2022, the Company held net U.S. dollar assets totaling US$273,150. Accordingly, a hypothetical 10% change in the value of one United States dollar expressed in Canadian dollars as at June 30, 2022 would have had an approximately $35,191 effect on the unrealized foreign exchange gain or loss for the period.

Interest Rates

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

Tax Rates

Changes in tax rates in the jurisdictions that we operate in would impact the amount of current taxes that we pay. In addition, changes to substantively enacted tax rates would impact the carrying balance of deferred tax assets and liabilities, potentially resulting in a deferred tax recovery or incremental deferred tax expense.

In addition to the above, we are exposed to risk factors that may impact the Company and our business. For further information on these risk factors, please refer to our Annual Information Form, available on NXT’s website at www.nxtenergy.com and on SEDAR at www.sedar.com.

NXT Energy Solutions Inc.		page \| 14

MD&A for the period ended June 30, 2022

Summary of Quarterly Results

A summary of operating results for each of the trailing eight quarters (including a comparison of certain key categories to each respective prior quarter) follows:

	Q2-22			Q1-22			Q4-21			Q3-21
Survey revenue	$	-		$	-		$	(10,123	)	$	-
Net income (loss)		(1,774,671	)		(1,840,868	)		(1,573,587	)		(1,434,442	)

Income (loss) per share – basic	$	(0.03	)	$	(0.03	)	$	(0.02	)	$	(0.02	)
Income (loss) per share – diluted	$	(0.03	)	$	(0.03	)	$	(0.02	)	$	(0.02	)

	Q2-21		Q1-21			Q4-20			Q3-20
Survey revenue	$	3,144,373	$	-		$	-		$	-
Net income (loss)		1,531,522		(1,647,292	)		(1,653,447	)		(1,487,821	)

Income (loss) per share – basic	$	0.02	$	(0.03	)	$	(0.03	)	$	(0.02	)
Income (loss) per share – diluted	$	0.02	$	(0.03	)	$	(0.03	)	$	(0.02	)

In Q2-22 the Company recorded unrealized foreign exchange gains as the CDN$ weakened versus the US$. In Q1-22, the Company incurred maintenance fees on its aircraft to have it available for up to 300 flight hours. In Q4-21, the CEWS and the CERS programs were ended therefore increasing G&A costs. In Q3-21, the Company recorded favourable exchange gains due to the strengthening of the US$. In Q2-21, revenue was recognized for a pre-existing SFD^® data sale. In Q1-21, costs were lower due to lower aircraft costs, a reduction in RSU accruals, and less fluctuation of exchange rates. In Q4-20, the Company received the CEWS and the CERS, which reduced costs. In Q3-20, the Company received the CEWS and the Scientific Research and Experimental Development Credit (“SR&ED”), which also reduced costs. Excluding Q2-21, the Company incurred net losses primarily due to incurred SFD^®-related costs related to aircraft lease and aircraft maintenance costs, G&A expenses, and non-cash items like SBCE, which can be a significant expense in any given quarter. More specific details are provided below:

	·	in Q2-22, the Company recorded unrealized foreign exchange gains as the CDN$ weakened versus the US$;
	·	in Q1-22, the Company incurred maintenance fees on its aircraft to have it available for up to 300 flight hours;
	·	in Q4-21, the Company only received grants from the CEWS and CERS for one month due to the termination of these programs;
	·	in Q3-21, the US$ strengthened vs the CDN$, which resulted in a $102,632 exchange gain;
	·	in Q2-21, revenue was earned for a pre-existing SFD^® sale of data and costs were lower due to receipt of the CEWS and the CERS. Additionally there was no business development travel due to restrictions from the COVID-19 pandemic;
	·	in Q1-21, costs were lower due to lower aircraft costs, a reduction in RSU accruals, and less fluctuation of exchange rates;
	·	in Q4-20, costs were reduced primarily due to recognizing $123,105 benefits under the CEWS and the CERS, and due to reduced travel; and
	·	in Q3-20, costs were reduced primarily due to recognizing $189,135 benefits under the CEWS and the SR&ED, and reduced travel.

NXT Energy Solutions Inc.		page \| 15

MD&A for the period ended June 30, 2022

Liquidity and Capital Resources

Going Concern

The unaudited condensed consolidated interim financial statements for Q2-22 have been prepared on a going concern basis. The going concern basis of presentation assumes that NXT will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business.

The events described in the following paragraphs highlight that there is substantial doubt about NXT’s ability to continue as a going concern within one year after the date that these unaudited condensed consolidated interim financial statements have been issued. The Company’s current cash position is not expected to be sufficient to meet the Company’s obligations and planned operations for a year beyond the date that the unaudited condensed consolidated financial interim statements have been issued.

The Company has deferred payment of operating costs, including payroll and other G&A costs, and is evaluating alternatives to reduce other costs. If required, further financing options that may or may not be available to the Company include issuance of new equity, debentures, or bank credit facilities. The need for any of these options will be dependent on the timing of securing new SFD^®-related revenues and obtaining financing on terms that are acceptable to both the Company and the financier.

The unaudited condensed consolidated interim financial statements do not reflect adjustments that would be necessary if the going concern basis was not appropriate. If the going concern basis was not appropriate for the unaudited condensed consolidated interim financial statements, then adjustments would be necessary in the carrying value of the assets and liabilities, the reported revenues and expenses, and the balance sheet classifications used. These adjustments could be material.

NXT’s cash and cash equivalents plus short-term investments at June 30, 2022 totaled $1.12 million. Net working capital totaled $0.05 million. See the information in the section “Liquidity and Capital Resources – Net Working Capital” for further information.

Risks related to having sufficient ongoing net working capital to execute survey project contracts are mitigated through our normal practice of obtaining advance payments and progress payments from customers throughout the course of the projects, which often span three to four months. In addition, where possible, risk of default on client billings has been mitigated through the use of export insurance programs offered by Export Development Canada.

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MD&A for the period ended June 30, 2022

The Company does not have provisions in its leases, contracts, or other arrangements that would trigger additional funding requirements or early payments except that if the Company were to default on its office lease, the current month rent, plus the next three months, become immediately due. If the Company were to default on the aircraft lease, the Company would be required to deliver the aircraft back to the Lessor.

Net Working Capital

Net Working Capital	June 30, 2022			December 31, 2021			Net Change			%
Current assets (current liabilities)
Cash, cash equivalents and short-term investments	$	1,116,842		$	2,807,855		$	(1,691,013	)		(60	)
Accounts receivable		432,295			841,567			(409,272	)		(49	)
Prepaid expenses and deposits		53,285			265,436			(212,151	)		(80	)
Accounts payable and accrued liabilities		(858,764	)		(500,625	)		(358,139	)		(72	)
Current portion of long-term debt		(120,370	)		(64,815	)		(55,555	)		(86	)
Current portion of lease obligation		(574,058	)		(532,936	)		(41,122	)		(8	)
Total Net Working Capital		49,230			2,816,482			(2,767,252	)		(98	)

NXT had net working capital of $49,230 as at June 30, 2022.

Net working capital at June 30, 2022 compared to December 31, 2021 decreased by $2,767,252, or 98%, due to cash used in operating activities, offset by cash received from payments on accounts receivable. Accounts payable increased due to annual timing of professional fees, payroll accruals, and the deferral of payments of various G&A costs.

Accounts Payable

Accounts Payable	June 30, 2022			Dec. 31, 2021			Net Change			%
Trade accounts payable	$	(63,016	)	$	(122,935	)	$	59,919			(49	)
Deferred advisor board payable		(24,156	)		(23,896	)		(260	)		1
Accrued liabilities		(267,669	)		(171,714	)		(95,955	)		(56	)
Accrued directors fees payable		(77,500	)		-			(77,500	)		(100	)
Salaries payable		(113,716	)		-			(113,716	)		(100	)
Vacation pay accrued		(108,081	)		(102,536	)		(5,545	)		(5	)
RSU and ESP Plan liability		(204,626	)		(79,544	)		(125,082	)		(157	)
Total accounts payable		(858,764	)		(500,625	)		(358,139	)		(72	)

Accounts payable increased by $358,139 or 72%, as at June 30, 2022 compared to December 31, 2021 for the following reasons:

	·	trade accounts payable decreased by $59,919, or 49%, due to timing of payables at the stated dates;
	·	accrued liabilities increased by $95,955, or 56%, due to timing of annual professional fees and deferring payments;

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MD&A for the period ended June 30, 2022

	·	accrued directors fees payable increased by $77,500, or 100%, as payment of directors’ fees were deferred;
	·	salaries payable increased by $113,716, or 100%, as the Company has implemented a salary deferral program;
	·	vacation pay accrued increased by $5,545, or 5%, due to timing of vacations; and
	·	RSU Plan and ESP Plan liabilities increased by $125,082 due to the RSU Plan share issuance only being settled once per year (August).

Cash Flow (Q2-21 and YTD 2021 Adjusted)

Please see the section “Correction of Prior Period Error”.

Cash Flow - from / (used in)	Q2-22			Q2-21			YTD 2022			YTD 2021
Operating activities	$	(782,888	)	$	766,202		$	(1,696,029	)	$	(80,927	)
Financing activities		12,965			979,952			1,121			963,396
Investing activities		200,272			(176,617	)		50,000			14,644
Effect of foreign exchange changes on cash		17,772			(63,769	)		3,895			(78,268	)
Net source (use) of cash		(551,879	)		1,505,768			(1,641,013	)		818,845
Cash and cash equivalents, start of period		1,168,721			2,003,223			2,257,855			2,690,146
Cash and cash equivalents, end of period		616,842			3,508,991			616,842			3,508,991

Cash and cash equivalents, end of period		616,842			3,508,991			616,842			3,508,991
Short-term investments, end of period		500,000			269,623			500,000			269,623
Total cash and short-term investments, end of period		1,116,842			3,778,614			1,116,842			3,778,614

The overall net changes in cash balances in each of the quarters noted above is a function of several factors including any inflows (outflows) due to changes in net working capital balances and net of any cash transferred into/out of short-term investments. Further information on the net changes in cash, by each of the operating, financing, and investing activities, is as follows:

Operating Activities	Q2-22			Q2-21			YTD 2022			YTD 2021
Net income (loss) for the period	$	(1,774,671	)	$	1,531,522		$	(3,615,539	)	$	(115,770	)
Total non-cash expense and lease items		549,302			583,311			1,063,762			1,068,300
Operating activities before change in non-cash working capital balances		(1,225,369	)		2,114,833			(2,551,777	)		952,530
Change in non-cash working capital balances		442,481			(1,348,631	)		855,748			(1,033,457	)
Total cash from (used in) operating activities		(782,888	)		766,202			(1,696,029	)		(80,927	)

Operating cash flow decreased by $1,549,090 in Q2-22 as compared to Q2-21 due to the receipt of payments for outstanding accounts receivable in Q2-21 and increased G&A costs in Q2-22.

NXT Energy Solutions Inc.		page \| 18

MD&A for the period ended June 30, 2022

Operating cash flow decreased by $1,615,102 in YTD 2022 as compared to YTD 2021 due to the receipt of payments for outstanding accounts receivable in YTD 2021 and increased G&A costs and aircraft maintenance costs during YTD 2022.

Financing Activities	Q2-22		Q2-21			YTD 2022			YTD 2021
Proceeds from long-term debt	$	-	$	1,000,000		$	-		$	1,000,000
Proceeds from the employee share purchase plan		12,965		16,590			29,071			36,225
Repayment of finance liability		-		(36,638	)		(27,950	)		(72,829	)
Total cash from financing activities		12,965		979,952			1,121			963,396

Proceeds were received from employee contributions under the ESP Plan. The repayment of finance liability was for the financing liability for the sales and leaseback agreement on NXT’s aircraft and ended in Q1-22.

Investing Activities	Q2-22		Q2-21			YTD 2022		YTD 2021
Acquisition of intellectual property	$	-	$	(50,310	)	$	-	$	(50,310	)
Proceeds from (used in) short-term investments		200,272		(126,307	)		50,000		64,954
Total Cash from Investing Activities		200,272		(176,617	)		50,000		14,644

Changes in short-term investments were for investments in guaranteed investment certificates to fund operations and investing of excess short-term cash.

Contractual Obligations

Leases

The estimated minimum annual commitments for the Company’s lease components as at June 30, 2022 are listed in the following table:

Lease payment obligations:	Total		2022		2023		2024		2025
Office	$	1,109,784	$	170,736	$	341,472	$	341,472	$	256,104
Office operating costs		723,112		111,248		222,496		222,496		166,872
Aircraft lease¹		557,847		173,925		347,849		36,073		-
Office equipment		2,250		2,250		-		-		-
Total		2,392,993		458,159		911,817		600,041		422,976

1. US$ payments have been converted to CDN$ at a rate of 1.28833.

On March 15, 2022, the Company surrendered 826 square feet of its office building lease to Interloq Capital Corp. (the “Landlord”). As a result, its non-lease operating cost commitments for the building lease will be reduced by approximately $13,881 for 2022, $17,537 for 2023 and 2024, and $13,150 for 2025. The Company incurred a surrender fee of $14,000. The Company derecognized the following amounts on its balance sheet in the quarter and recorded a gain on the remeasurement of the lease of $3,062:

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MD&A for the period ended June 30, 2022

Right of Use Assets		$	80,033
Lease obligations			83,095

Long-term Debt (HASCAP Loan)

On May 26, 2021, the Company received $1,000,000 from the BDC’s HASCAP Loan. The HASCAP Loan is a $1,000,000 non-revolving ten-year term credit facility with an interest rate of 4%. Repayment terms were interest only until May 26, 2022, and monthly principal plus interest payments for the remaining nine years. The HASCAP Loan is secured by a general security agreement and is guaranteed by BDC.

Repayment of long-term debt:
2022	$	87,500
2023		146,481
2024		142,037
2025		137,593
2026		133,148
2027 to 2031		534,908
Total principal and interest payments		1,181,667
Less interest		(181,667	)
Total principal remaining		1,000,000
Current portion of long-term debt		120,370
Non-current portion of long-term debt		879,630

Off-balance Sheet Arrangements

The Company has no off-balance sheet arrangements as of the date of this MD&A other than office premise non-lease operating costs with the Landlord. If the Company were to default on its office lease, the current month rent including operation costs plus the next three months become immediately due. Operating cost amounts are disclosed in the section “Liquidity and Capital Resources – Contractual Obligations”. NXT pays an estimated operating cost during the current year, but has the obligation to pay the actual operating costs incurred as defined in the office lease with the Landlord early in the first quarter of the preceding year if the estimate was low, or will receive a refund if the estimate was too high. Currently, the Company believes that the current operating cost estimate is reasonable and is consistent with discussions with the Landlord.

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MD&A for the period ended June 30, 2022

Transactions with Related Parties

Related party fees incurred were as follows:

	Q2-22		Q2-21		YTD 2022		YTD 2021
Legal fees	$	19,491	$	33,231	$	30,456	$	50,611
Design services¹		-		-		-		4,013

1. US$3,000.

One of the members of NXT’s Board is a partner in a law firm which provides legal advice to NXT. Accounts payable and accrued liabilities includes a total of $28,162 ($16,000 as at December 31, 2021) payable to this law firm.

A company owned by a family member of an executive officer was contracted to provide presentation design services to the Company during 2021.

The Geothermal Right was acquired from the Company’s CEO on April 18, 2021.

Critical Accounting Estimates

In preparing the unaudited condensed consolidated interim financial statements, NXT is required to make estimates and assumptions that affect both the amount and timing of recording assets, liabilities, revenues, and expenses since the determination of these items may be dependent on future events. The Company uses the most current information available and exercises careful judgment in making these estimates and assumptions. In the opinion of management, the unaudited condensed consolidated interim financial statements have been properly prepared within reasonable limits of materiality and within the framework of the Company’s significant accounting policies. The estimates and assumptions used are based upon management’s best estimate as at the date of the unaudited condensed consolidated interim financial statements. Estimates and assumptions are reviewed periodically and the effects of revisions are reflected in the period when determined. Actual results may differ from those estimates.

Critical accounting estimates relate primarily to the use of the going concern assumption, estimated useful lives and the valuation of intellectual property and property and equipment, and the measurement of SBCE.

Changes in Accounting Policies

The unaudited condensed consolidated interim financial statements of NXT for Q2-22 have been prepared by management in accordance with US GAAP. The accounting policies applied are consistent with those outlined in NXT’s annual audited consolidated financial statements for the year ended December 31, 2021, available on NXT’s website at www.nxtenergy.com and on SEDAR at www.sedar.com.

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MD&A for the period ended June 30, 2022

Correction of Prior Period Error

During Q3-21, the Company determined that the amounts previously recorded for the aircraft lease were calculated incorrectly and the United States dollar denominated lease liability had not been re-measured to Canadian dollars each reporting period as required. The result of these corrections are to reduce the value of both the Right of use assets and Lease obligations, with changes to related income statement. The Company has determined that the effect of these adjustments are not material.

The Company has recorded the adjustments in the related accounts in the comparative periods in this MD&A. On the balance sheet and income statement, the specific accounts affected are Deposits, Right of use assets, Current portion of lease obligations, Long-term lease obligations, Deficit, SFD^®-related costs, Interest income (expense), and Foreign exchange loss (gain). The loss per share in each of the comparative periods did not change as a result of these immaterial corrections. The tables below highlight the changes to each account in each of the comparative period presented in this MD&A.

Income Statement	For the three months ended June 30, 2021
	As previously reported			Adjustments			Adjusted
SFD^®-related costs	$	383,211		$	(1,515	)	$	381,696
Interest (income) expense		9,036			(615	)		8,421
Foreign exchange loss (gain)		84,719			3,814			88,533
Net income (loss)		1,533,206			(1,684	)		1,531,522
Deficit		(84,044,575	)		50,090			(83,994,485	)

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MD&A for the period ended June 30, 2022

Income Statement	For the six months ended June 30, 2021
	As previously reported			Adjustments			Adjusted
SFD^®-related costs	$	648,694		$	(1,383	)	$	647,311
Interest (income) expense		15,151			(1,224	)		13,927
Foreign exchange loss (gain)		104,929			8,032			112,961
Net income (loss)		(110,345	)		(5,425	)		(115,770	)
Deficit		(84,044,575	)		50,090			(83,994,485	)

Consolidated Statement of Cash Flows

In the preparation of the annual financial statements as at and for the year ended December 31, 2021, the Company determined that certain amounts previously recorded in the 2021 consolidated statements of cash flows were not correctly calculated to properly reflect payments on the financial liability, lease obligation payments and accretion, and application of exchange rates to calculate unrealized foreign exchange (gain) loss, including the effect of foreign exchange on changes on cash and cash equivalents.

The adjustments to correct the respective financial statement line items are not material and did not change the Cash, SFD^®-related revenues, or Net income (loss) accounts, or basic and diluted loss per share. The Company has recorded the adjustments in the related line items in each of the comparative periods. Line items affected on the Consolidated Statement of Cash Flows by the adjustment are: Non-cash lease costs, Change in the carrying amount of right of use assets and lease liabilities, Unrealized foreign exchange (gain) loss, Repayment of financial liability and finance lease obligations, Proceeds from (used in) short-term investments, and Effect of foreign exchange rate changes on cash and cash equivalents. The table below highlights the changes to each line item in the comparative period in this MD&A.

Consolidated Statements of cash flows	For the three months ended June 30, 2021
	As previously reported			Adjustments			Adjusted
Net loss	$	1,533,206		$	(1,684	)	$	1,531,522
Non-cash lease costs		(42,825	)		39,891			(2,934	)
Change in carrying amount of right of use assets & lease liabilities		-			5,550			5,550
Unrealized foreign exchange (gain) loss		122,413			(7,118	)		115,295
Operating activities		729,564			36,638			766,202
Repayment of financial liability and lease obligations		-			(36,638	)		(36,638	)
Financing activities		1,016,590			(36,638	)		979,952
Net increase (decrease) in cash and cash equivalents		1,505,768			-			1,505,768

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MD&A for the period ended June 30, 2022

Consolidated Statements of cash flows	For the six months ended June 30, 2021
	As previously reported			Adjustments			Adjusted
Net loss	$	(110,345	)	$	(5,425	)	$	(115,770	)
Non-cash lease costs		(85,649	)		79,781			(5,868	)
Change in carrying amount of right of use assets & lease liabilities		-			11,851			11,851
Unrealized foreign exchange (gain) loss		147,942			(13,378	)		134,564
Operating activities		(153,756	)		72,829			(80,927	)
Repayment of financial liability and lease obligations		-			(72,819	)		(72,829	)
Financing activities		1,036,225			(72,829	)		963,396
Net increase (decrease) in cash and cash equivalents		818,845			-			818,845

Financial Instruments and Other Instruments

The Company’s non-derivative financial instruments consist of cash and cash equivalents, short-term investments, accounts receivable, accounts payable, and accrued liabilities. The carrying value of these financial instruments approximates their fair values due to their short terms to maturity. NXT is not exposed to significant interest arising from these financial instruments, but is exposed to significant credit risk with accounts receivable. For accounts receivable, where possible, NXT requests advance payments and utilizes risk mitigation products offered by entities such as Export Development Canada including, for example, insurance coverage of contract accounts receivable, guarantee support for contract performance bonds, and wrongful call insurance for such bonds.

NXT is exposed to foreign exchange risk as a result of holding foreign denominated financial instruments. Any unrealized foreign exchange gains and losses arising on such holdings are reflected in earnings at the end of each period.

As at June 30, 2022 and June 30, 2021, the Company held no derivative financial instruments. For more information relating to risks, see the section titled “Liquidity and Capital Resources – Net Working Capital”.

NXT Energy Solutions Inc.		page \| 24

MD&A for the period ended June 30, 2022

Outstanding Share Capital

	August 11, 2022		June 30, 2022		December 31, 2021
Common Shares		65,362,115		65,341,775		65,250,710
Options		392,120		392,120		358,660
Deferred Share Units		37,354		37,354		37,354
Restricted Share Units		696,666		696,666		696,666
Total share capital and dilutive securities		66,488,255		66,467,915		66,343,390

	Director & Officer Share Capital at
	August 11, 2022		June 30, 2022		December 31, 2021
Frank Ingriselli ¹		50,000		50,000		50,000
George Liszicasz ^{1 & 2}		15,384,640		15,383,555		15,378,679
Charles Selby ¹		408,161		408,161		408,161
John Tilson ¹		6,536,208		6,536,208		5,916,208
Bruce G. Wilcox ¹		410,000		410,000		410,000
Eugene Woychyshyn ²		228,742		220,861		185,445
Total Director and Officer Share Capital		23,017,751		23,008,785		22,348,493

¹ Director of NXT

² Officer of NXT

Disclosure Controls and Procedures (“DCPs”) and

Internal Controls over Financial Reporting (“ICFR”)

NXT’s CEO and Chief Financial Officer (“CFO”) (together the “Responsible Officers”) are responsible for establishing and maintaining DCPs, 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 year-end consolidated financial statements and MD&A are being prepared.

DCPs and other procedures are designed to ensure that information required to be disclosed in reports that are filed is recorded, summarized, and reported within the time periods specified by the relevant securities regulatory authorities in either Canada or the United States of America. DCPs include controls and procedures designed to ensure that information required to be disclosed in our reports is communicated to management, including our Responsible Officers, to allow timely decisions regarding required disclosure.

The Company has established and maintains ICFR using the criteria that were set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control – Integrated Framework (2013). The control framework was designed or caused to be designed under the supervision of the Responsible Officers to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with US GAAP.

NXT Energy Solutions Inc.		page \| 25

MD&A for the period ended June 30, 2022

In evaluating the effectiveness of the Company’s DCPs, as defined under the rules adopted by the Canadian securities regulatory authorities and by the United States Securities and Exchange Commission, the Company’s Responsible Officers concluded that there are material weaknesses in the Company’s ICFR that have a direct impact on the Company’s DCPs:

	·	due to the limited number of staff, it is not feasible to achieve adequate segregation of incompatible duties. NXT partially 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

	·	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. NXT partially 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.

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.

Given the small size of the Company’s finance team, management has established a practice of increased engagement of the Company’s Disclosure Committee and Audit Committee in reviewing the public disclosure and has increased the engagement of external consultants and legal counsel as well.

The Responsible Officers concluded that, as at June 30, 2022, its ICFR is not effective and as a result, its DCPs are not sufficiently effective. NXT reached this conclusion based upon its assessment that there is a more than remote likelihood that its ICFR will not prevent or detect material misstatements if they should exist in the Company’s consolidated financial statements. The Responsible Officers continue to take certain actions to mitigate these material weaknesses including:

	·	the implementation of controls with regards to the review procedures surrounding its disclosure; and
	·	engagement of third party specialists. In addition, the CFO engages subject matter consultants as the need arises.

There were no changes to the Company’s ICFR in Q2-22.

It should be noted that a control system, including the Company’s DCPs and ICFR, 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 DCPs and ICFR will prevent all errors or fraud.

Additional Information

Additional information related to the Company, including the Company’s Annual Information Form, is available on NXT’s website at www.nxtenergy.com and on SEDAR at www.sedar.com.

NXT Energy Solutions Inc.		page \| 26

MD&A for the period ended June 30, 2022

EXHIBIT 99.3

FORM 52-109F2

CERTIFICATION OF INTERIM FILINGS

FULL CERTIFICATE

I, Eugene Woychyshyn, Chief Financial Officer, NXT Energy Solutions Inc., certify the following:

1.	Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of NXT Energy Solutions Inc. (the “issuer”) for the interim period ended June 30, 2022.

2.	No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.

3.	Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.

4.	Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer.

5.	Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings

	(a)	designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that

		(i)	material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and

		(ii)	information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and

	(b)	designed ICFR, or caused it 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 the issuer’s GAAP.

5.1	Control framework: The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is the Internal Control – Integrated Framework (COSO Framework) published by The Committee of Sponsoring Organizations of the Treadway Commission (COSO).

5.2	ICFR – material weakness relating to design: The issuer has disclosed in its interim MD&A for each material weakness relating to design existing at the end of the interim period

	(a)	a description of the material weakness;

	(b)	the impact of the material weakness on the issuer’s financial reporting and its ICFR; and

	(c)	the issuer’s current plans, if any, or any actions already undertaken, for remediating the material weakness.

5.3	N/A

6.	Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on April 1, 2022 and ended on June 30, 2022 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.

Date: August 11, 2022

“/s/ Eugene Woychyshyn”
Eugene Woychyshyn
Chief Financial Officer

EXHIBIT 99.4

FORM 52-109F2

CERTIFICATION OF INTERIM FILINGS

FULL CERTIFICATE

I, George Liszicasz, Chairman and CEO, NXT Energy Solutions Inc., certify the following:

1.	*Review:* I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of NXT Energy Solutions Inc. (the “issuer”) for the interim period ended June 30, 2022.

2.	*No misrepresentations:* Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.

3.	*Fair presentation:* Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.

4.	*Responsibility:* The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer.

5.	*Design:* Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings

	(a)	designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that

		(i)	material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and

		(ii)	information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and

	(b)	designed ICFR, or caused it 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 the issuer’s GAAP.

5.1	*Control framework:* The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is the Internal Control – Integrated Framework (COSO Framework) published by The Committee of Sponsoring Organizations of the Treadway Commission (COSO).

5.2	*ICFR – material weakness relating to design:* The issuer has disclosed in its interim MD&A for each material weakness relating to design existing at the end of the interim period

	(a)	a description of the material weakness;

	(b)	the impact of the material weakness on the issuer’s financial reporting and its ICFR; and

	(c)	the issuer’s current plans, if any, or any actions already undertaken, for remediating the material weakness.

5.3	N/A

6.	*Reporting changes in ICFR:* The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on April 1, 2022 and ended on June 30, 2022 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.

Date: August 11, 2022

“/s/ George Liszicasz”
George Liszicasz
Chairman & CEO

99.1	Unaudited Condensed Consolidated Interim Financial Statements For the three and six months ended June 30, 2022
99.2	Management’s Discussion and Analysis (“MD&A”) For the three and six months ended June 30, 2022
99.3	Certification Of Interim Filings CEO
99.4	Certification Of Interim Filings CFO

		NXT Energy Solutions Inc.
		(Registrant)

Date: August 11, 2022		/s/ Eugene Woychyshyn
		Eugene Woychyshyn
		Chief Financial Officer

	June 30,			December 31,
	2022			2021
Assets
Current assets
Cash and cash equivalents	$	616,842		$	2,257,855
Short-term investments		500,000			550,000
Accounts receivable		432,295			841,567
Prepaid expenses and deposits		53,285			265,436
		1,602,422			3,914,858
Long term assets
Deposits		236,559			234,475
Property and equipment		579,381			624,763
Right of Use Assets (Note 4)		1,525,968			1,943,252
Intellectual property (Note 5)		14,017,766			14,867,023
	$	17,962,096		$	21,584,371
Liabilities and Shareholders' Equity
Current liabilities
Accounts payable and accrued liabilities (Note 6, 16)	$	858,764		$	500,625
Current portion of long-term debt		120,370			64,815
Current portion of lease obligations (Note 7)		574,058			532,936
		1,553,192			1,098,376
Long-term liabilities
Long-term debt		879,630			935,185
Long-term lease obligation (Note 7)		895,521			1,369,668
Asset retirement obligation		23,371			22,337
		1,798,522			2,327,190
		3,351,714			3,425,566

Shareholders' equity
Common shares (Note 9): - authorized unlimited Issued: 65,341,775 (2021 - 65,250,710) common shares		95,831,418			95,779,352
Contributed capital		9,397,018			9,381,966
Deficit		(90,618,054	)		(87,002,513	)
		14,610,382			18,158,805
	$	17,962,096		$	21,584,371

	For the three months ended June 30,					For the six months ended June 30,
	2022			2021		2022			2021
Revenue				Adjusted-Note 2					Adjusted-Note 2
SFD^® related revenue (Note 14)	$	-		$	3,144,373	$	-		$	3,144,373
Expenses
Survey^® related costs, net		306,492			381,696		743,774			647,311
General and administrative expenses (Notes 11, 15, 16)		1,046,677			682,851		1,959,227			1,583,160
Amortization (Note 5)		442,097			444,171		884,534			885,995
		1,795,266			1,508,718		3,587,535			3,116,466
Other expenses (income)
Interest expense, net		7,670			8,421		15,858			13,927
Foreign exchange loss (gain)		(31,355	)		88,533		(11,090	)		112,961
Intellectual property and other		3,090			7,179		23,236			16,789
		(20,595	)		104,133		28,004			143,677

Income (loss) before income taxes		(1,774,671	)		1,531,522		(3,615,539	)		(115,770	)
Income tax expense		-			-		-			-
Net income (loss) and comprehensive income (loss)	$	(1,774,671	)	$	1,531,522	$	(3,615,539	)	$	(115,770	)
Net income (loss) per share (Note 10)
Basic	$	(0.03	)	$	0.02	$	(0.06	)	$	0.00
Diluted	$	(0.03	)	$	0.02	$	(0.06	)	$	0.00

	For the three months ended						For the six months ended
	June 30,						June 30,
	2022			2021			2022			2021
Common Shares				Adjusted-Note 2						Adjusted-Note 2

Balance at beginning of the period	$	95,808,189		$	95,363,018		$	95,779,352		$	95,327,123
Issuance of common stock on the Employee Purchase Plan (Note 11)		23,229			29,803			52,066			65,698
Balance at end of the period		95,831,418			95,392,821			95,831,418			95,392,821

Contributed Capital

Balance at beginning of the period		9,389,466			9,359,466			9,381,966			9,355,716
Issuance of equity for intellectual property (Note 5)		-			207,300			-			207,300
Recognition of stock based compensation expense (Note 11)		7,552			7,500			15,052			11,250
Balance at end of the period		9,397,018			9,574,266			9,397,018			9,574,266

Deficit

Balance at beginning of the period		(88,843,383	)		(85,581,522	)		(87,002,515	)		(83,934,230	)
Net (loss) income		(1,774,671	)		1,531,522			(3,615,539	)		(115,770	)

Balance at end of the period		(90,618,054	)		(84,050,000	)		(90,618,054	)		(84,050,000	)

Total Shareholders' Equity at end of the period	$	14,610,382		$	20,917,087		$	14,610,382		$	20,917,087

	June 30, 2022
	Cost		Accumulated		Right of
	Base		Amortization		Use
Aircraft	$	1,847,617	$	1,260,073	$	587,544
Office Building		1,725,414		789,439		935,975
Printer		17,794		15,345		2,449
		3,590,825		2,064,857		1,525,968

	1.	US$40,000 (CAD$50,310) signature payment, which became due immediately and was paid on April 22, 2021;
	2.	300,000 common shares, which were issued in December 2021;
	3.	CAD$15,000 signature milestone payment paid in August 2021;
	4.	US$200,000 milestone payment which will become due in the event that the Company's cash balance exceeds CAD$5,000,000 due to receipt of specifically defined funds from operations; and
	5.	US$250,000 milestone payment which will become due in the event that the Company executes and completes and receives full payment for an SFD^® contract valued at US$10,000,000 or greater, provided such contract is entered into and completed and payment of at least US$5,000,000 is received by April 18, 2023.

Maturity of lease liabilities:	Weighted Average Remaining Lease Term
2022	$	346,911		2.7 years
2023		689,321		2.3 years
2024		377,545		1.7 years
2025		256,104		0.8 years
Total lease payments		1,669,881
Less imputed interest		(200,302	)
Total discounted lease payments		1,469,579
Current portion of lease obligations		574,058
Non-current portion of lease obligations		895,521

	Lease Term	Option to Extend	Incremental Borrowing Rate
Aircraft	April 2024	Executed		11.2	%
Office Building	September 2025	No		6.1	%
Printer	November 2022	No		7.4	%

For the fiscal period ending December 31,	Office Premises
2022	$	111,248
2023		222,496
2024		222,496
2025		166,872
		723,112

	For the three months				For the six months
	ended June 30, 2022				ended June 30, 2021
	# of shares		$ amount		# of shares		$ amount
As at the beginning of the period		65,250,710	$	95,779,352		64,437,790	$	95,327,123
Issuance for Employee Share Purchase Plan		91,065		52,066		118,515		65,698
As at the end of the period		65,341,775		95,831,418		64,556,305		95,392,821

	For the three months					For the six months
	ended June 30,					ended June 30,
	2022			2021		2022			2021
	(Adjusted – Note 2)					(Adjusted – Note 2)
Net income (loss) for the period	$	(1,774,671	)	$	1,531,522		(3,615,539	)		(115,770	)
Weighted average number of shares outstanding for the period:
Basic		65,330,821			64,526,430		65,307,012			64,499,475
Diluted		65,330,821			66,007,218		65,307,012			64,499,475
Net Income (loss) per share – Basic	$	(0.03	)	$	0.02	$	(0.06	)	$	0.00
Net Income (loss) per share – Diluted	$	(0.03	)	$	0.02	$	(0.06	)	$	0.00

For the three months ended June 30,					For the six months ended June 30,
	2022		2021		2022		2021
Stock Option Expense	$	7,552	$	7,500	$	15,052	$	11,250
Restricted Stock Units		90,368		19,595		126,654		19,546
Employee Share Purchase Plan		10,265		25,562		22,995		48,357
Total stock based compensation expense		108,185		52,657		164,701		79,153

Exercise price per share	# of options outstanding	# of options exercisable	Average remaining life (in years)
$0.44	21,360	21,360	4.0
$0.51	16,000	16,000	3.3
$0.52	100,000	100,000	2.1
$0.55	30,000	30,000	2.6
$0.59	150,000	150,000	1.3
$0.62	18,050	18,050	4.5
$0.68	14,750	14,750	4.3
$0.68	17,500	17,500	5.0
$0.72	24,460	24,460	4.9
	392,120	392,120	2.5

	For the six months ended						For the year ended
	June 30, 2022						December 31, 2021
				weighted						Weighted
	# of stock			average			# of stock			Average
	options			exercise price			options			exercise price
Options outstanding, start of the year		358,660			$0.56			421,000			$0.83
Granted		64,860			$0.70			62,660			$0.56
Expired		-			-			(125,000	)		$(1.48	)
Cancelled		(31,400	)		$(0.51	)		-			-
Options outstanding, end of the year		392,120			$0.57			358,660			$0.56
Options exercisable, end of the year		392,120			$0.57			358,660			$0.56

	June 30,			December 31,
For the period ended	2022			2021
Expected dividends paid per common share	Nil			Nil
Expected life in years		5.0			5.0
Weighted average expected volatility in the price of common shares		76	%		150	%
Weighted average risk free interest rate		2.73	%		0.15	%
Weighted average fair market value per share at grant date		$0.64			$0.49
Intrinsic (or “in-the-money”) value per share of options exercised		$-			$-

	For the six months ended		For the year ended
Opening balance	June 30, 2022		December 31, 2021
Opening balance		37,354		37,354
Granted		-		-
Closing balance		37,354		37,354

	For the six months ended,				For the year ended,
	June 30, 2022				December 31, 2021
	# of RSUs		FV/Unit		# of RSUs			FV/Unit
RSUs outstanding, start of the period		696,666	$	0.61		1,200,000		$	0.79
Granted		-		-		-			-
Common shares issued		-		-		(208,370	)	$	(0.55	)
Payroll withholdings settled in cash		-		-		(139,964	)	$	(0.55	)
Forfeited		-		-		(155,000	)	$	(0.79	)
RSUs outstanding, end of the period		696,666	$	0.68		696,666		$	0.61

	For three months ended June 30,				For the six-month period ended June 30
	2022		2021		2022		2021
Legal Fees	$	19,491	$	33,231	$	30,456	$	50,611
Design Services¹		-		-		-		4,013