NXT Energy Solutions Inc.

Good day, ladies and gentlemen. My name is Faith, and I will be your conferencing operator today. At this time, I would like to welcome everyone to the NXT Energy Solutions 2021 Second Quarter and Operating and Financial Results Conference Call. All participants will be in listening-only mode for the first part of the conference call, with the ability to ask questions after the presentation by the company. For the question and answer session, if you would like to ask a question, please press star 1 on your telephone keypad. Should you wish to cancel your question, please press the pound key. So that all callers have an opportunity to ask their question, we will limit each caller to one question and a follow-up question. I would now like to turn the meeting over to Mr. George Lizikas, President and CEO of NXT Energy Solutions. Please go ahead, Mr. Lizikas.

Thank you, Faith. Welcome, and thank you, everyone, for joining us today for NXT Energy Solutions Second Order 2021 Financial and Operating Results Conference Call. This is George Lisitas, and joining me today's conference call is Eugene Wojcicin, Vice President of Finance and Chief Financial Officer, Dr. Xiang Gui, Director of R&D, Rashid Tipu, Director of Geosciences for Africa, Asia, Middle East, and Enrique Hung, Director of Geosciences for the Americas, and Mohamed Saqib, Head of Interpretation and Project Engineer. The purpose of today's call is to briefly discuss the highlights of the release of NXT's second quarter 2021 financial and operating results. Following our update, we will open up the line for questions. Please note all statements made by the company and management during this call are subject to the reader's advisory regarding forward-looking information and non-GAAP measures set forth in our Q2 2021 press release and MD&A issued on August 12th. All dollar amounts discussed in today's conference call are in Canadian dollars unless otherwise stated. The complete financial and operating results and consolidated financial statements for the second quarter of 2021 were published on August 12th and are available on NXT's website, CEDAR's website, and soon will be available on Edgard's website. Now, over to Eugene for the financial review.

Thank you, George, and welcome everyone. As George mentioned, our second quarter 2021 financial statements and management discussion analysis were filed on CDAR's website on August 12th and will shortly be available on EDGAR. We are pleased with the quarter results, especially with $729,000 of operating cash flow and net income of $1.53 million or two cents per share. From a financial perspective, the focus remained on supporting the execution of the business development effort and continuing to control and optimize costs. For the second quarter, our financial results were as follows. Cash and short-term investments were $3.78 million at June 30th, 2021, and net working capital was $4.64 million. Operating activities provided $729,000 of cash during the quarter, Revenue was $3.14 million in the second quarter and year to date. For the quarter, NXT recorded a net income of approximately $1.53 million or two cents per share based on 64.5 million weighted average common shares outstanding. This compares to a net loss of $1.48 million in the second quarter of 2020 or two cents per share. For year to date, NXT recorded a net loss of approximately $110,000 or zero cents per share based on 64.5 million weighted average common shares outstanding. This compares to a net loss of $2.8 million during year-to-date 2020 or four cents per share. Total operating expenses for the second quarter were $1.51 million including survey costs. This includes non-cash expenses of half a million dollars related to amortization and stock-based compensation expenses. Total operating expenses year-to-date were $3.12 million including survey costs. This included non-cash expenses of $.96 million related to amortization and stock-based compensation expenses. General administrative expenses decreased by $127,000 or 16% in the second quarter compared to 2020 for the following reasons. Salaries, benefits and consulting charges decreased $36,000 or 11% through the Canada emergency wage subsidy. Board and professional fees and public company costs decreased $29,000, or 11%, due to lower professional fees. Premises and administrative and overhead costs decreased $107,000 for the quarter, or 52%, due to receipt of the Canada emergency rent subsidy. And stock-based compensation was higher by $45,000, or 22%, due to the employee share purchase plan which commenced in the fourth quarter of 2020 and has approximately 75% employee participation. G&A expenses decreased $223,000 or 12% year to date 2021 compared to 2020 for the following reasons. Board and professional fees of public company costs decreased $80,000 or 21% due to lower professional fees. Premises administrative overhead costs decreased $80,000 for the quarter, or 21%, due to the receipt of the Canada Emergency Rent Subsidy. Business development costs decreased $126,000, or 96%, as travel restrictions continued due to the COVID-19 pandemic. And stock-based compensation was higher by $49,000 due to the employee share purchase and RSU plans. During the quarter, the company received a million-dollar ASCAP loan with an interest rate of 4% for a 10-year term. To summarize some of the key financial points, we ended the quarter with $3.78 million of cash and short-term investments on hand and a net working capital balance of $4.64 million. Net income for the quarter is $1.53 million and net loss was $110,000 year-to-date. Cash provided by operations was $729,000 for the quarter, and we used $154,000 year to date. Our main focus continues to be on the execution of NXT's commercial opportunities. I would now like to hand the call back over to George to further discuss our business update and forward plans.