NXT Energy Solutions Inc.

Good day, ladies and gentlemen. My name is Melanie and I will be your conference operator today. At this time, I would like to welcome everyone to the NXT Energy Solutions Inc. Fourth Quarter 2023 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's keypad. If you wish to cancel your question, please press star 2. I would now like to turn the meeting over to Mr. Bruce Wilcox, Interim CEO of NXT Energy Solutions. Please go ahead, Mr. Wilcox.

Thank you, Melanie, and welcome and thank you everyone for joining us today for NXT Energy Solutions' 2023 Fourth Quarter Financial and Operating Results Conference Call. My name is Bruce Wilcox, NXT's Interim Chief Executive Officer. Joining me on today's conference call is Mr. Eugene Wichishen, VP of Finance and CFO, Mr. Enrique Hung, Director of Geosciences for the Americas, Mr. Rashid Tipu, Director of Geosciences for Africa, Asia, and the Middle East, and Mr. Mohammed Saqib, Operations and Interpretation Manager. So a little history on me. I joined the NXT board in 2015. I've had a 40 year career as an investor, primarily as an analyst slash portfolio manager, and ultimately CEO of one of the oldest long, short equity investment firms in the U S among other things, I was responsible for all of our investments in the energy sector, both EMP and service companies. I was appointed interim CEO of NXT in June of last year. As I observed my opening remarks for the 2023 shareholders meeting, I want to be judged on the progression of our stock price and for reasons that I will outline later, I am optimistic. The purpose of today's call is to briefly discuss the highlights of the release of NXT's 2023 fourth quarter financial operating results and to give some color on our business pipeline and prospects. Our CFO, Eugene Wichishin, will start with a financial review, and I will follow with perspective on our business outlook. 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 Q4 2023 press release and MD&A issued March 27, 2024. 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 2023 fourth quarter were published on March 27th and are available on NXT's website, CDAR's website, and soon will be available on Edgar's website. Now, over to Eugene for the financial reference.

Thank you, Bruce. First, I'll start with a review of our financial results. During the fourth quarter of 2023, the company commenced the Turkish SFD survey for an independent oil and gas exploration company in Turkey and recorded SFD-related revenues of approximately $2.15 million for work completed up till December 31st, 2023. Cash was $0.4 million at December 31st, 2023, The net working capital was a negative $1.86 million, which was an improvement versus an approximate negative $3.47 million at September 30, 2023. Accounts receivable were $1.83 million at December 31, 2023. Approximately $1.43 million of the payments on accounts receivable were received up to March 27, 2024. The debentures announced in November 2023 were finalized on January 12, 2024, for a total of $1.87 million. $0.72 million of these debentures were received in the first quarter of 2024. Insiders, including all the directors, participated in this debenture for a total of $1.522 million. Working capital needs. For operating activities, used approximately $1.47 million of cash during the fourth quarter and $4.83 million year-to-date. For the quarter, NXT recorded a net loss of approximately $0.43 million, or one cent per share, based on 78 million weighted average common shares outstanding. This compares to a net loss of $1.47 million in the fourth quarter of 2022, or two cents per share. Year to date, NXT recorded a net loss of approximately $5.45 million, or $0.07 per share, based on 77.5 million weighted average common shares outstanding. This compares to a net loss of $6.73 million in 2022, or $0.10 per share. DNA expenses decreased $37,000, or 5% in the fourth quarter of 2023 compared to 2022 for the following reasons. Salaries, benefits, and consulting charges decreased $37,000, or 10%, as a portion of some of the salaries were allocated as direct labor expense to support the Turkish SFD survey. Foreign and professional fees and public company costs decreased $15,000, or 9%, as audit fees were significantly lower due to change of auditor. And business development costs decreased $35,000, or 75%, in the Fourth quarter of 2022, the company traveled to the Middle East and Asia to pursue opportunities. While in Q4 23, the company focused on the Turkish SFD survey. G&A expenses decreased $316,000 or 8% in 2023 compared to 2022 for the following reasons. Salaries, benefits and consulting charges decreased $176,000 or 10% as the company had one less headcount for the first half of 2023. In addition, a portion of some of the salaries are allocated to direct labor expense to support the SFD survey. Awarded professional fees and public company costs decreased $65,000, or 8%. Audit fees were lowered due to the company changing its auditor. This was offset by increased professional fees due to the venture financing. And finally, business development costs decreased $105,000, or 53%. Due to less travel expense during 2023 versus 2022, the company engaged more travel to the Middle East and Asia to pursue opportunities in 2022. While in 2023, the company focused on the Turkish survey and attended more virtual meetings. The company continues its programs to reduce costs. On March 22nd, 2024, the company extended its lease on its aircraft for an additional three years as a capital lease. Under the terms of the lease, the company will own the aircraft at the end of the three-year term. In addition, we're working with our landlord to reduce our office space by an additional 30% beginning May 1st of 2024, thereby reducing total space by approximately 40% compared to the original lease agreement. We'll continue to negotiate and rate size other service provider contracts as they come due. Our 2023 financial statements and MD&A are filed on CEDA Plus' website. We're filed on March 27th and will shortly be available in EDGAR. To summarize the key financial points, we ended the quarter with $0.4 billion of cash and accounts receivable of approximately $1.83 million. Our main focus continues to be supporting the execution of NXT's commercial pipeline in a cost-efficient way. Now I'd like to turn the call back over to Bruce. Thank you.