EXHIBIT 99.2

NXT ENERGY SOLUTIONS INC.

Management’s Discussion and Analysis

For the three months ended

March 31, 2026

Management’s Discussion and Analysis

This management’s discussion and analysis (“MD&A”) was prepared by management of NXT Energy Solutions Inc. (“NXT”, “we”, “our” or the “Company”) based on information available as at May 14, 2026 and 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 three months ended March 31, 2026 (the “Consolidated Financial Statements”). This MD&A covers the unaudited three months ended March 31, 2026, with comparative amounts for the unaudited three months ended March 31, 2025.

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”, “would”, “could”, “should”, “estimate”, “expect”, “strategy”, “may”, “plan”, “ensure”, “will”, “remain”, “continue” and similar words and phrases suggesting future outcomes or an outlook. Forward-looking statements in this document include, but are not limited to: 

Such forward-looking information is based on several 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:

Although NXT believes that the expectations reflected in such forward-looking information are reasonable, readers are cautioned not to place any undue reliance 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:

For more information relating to risks, see the section titled “Risk and Uncertainties” in this MD&A and the section titled “Risk Factors” in NXT’s most recently filed Annual Information Form dated March 31, 2026 (“AIF”). Except as required by applicable securities law, NXT undertakes no obligation to update publicly or revise any forward-looking statements or information, whether because of new information, future events or otherwise. Accordingly, readers are cautioned not to place undue reliance on forward-looking statements.

Financial Outlook

This MD&A contains future-oriented financial information and financial outlook information (collectively, “FOFI”) about expectations regarding financial results which are subject to the same assumptions, risk factors, limitations and qualifications as set out under the heading “Forward-Looking Information”. The actual financial results of the Company may vary from the amounts set out herein and such variation may be material. The Company and its management believe that the financial outlook has been prepared on a reasonable basis, reflecting management’s best estimates and judgments, and the FOFI contained in this MD&A has been approved by management as of the date hereof. However, because this information is in part subjective and subject to numerous risks, it should not be relied on as necessarily indicative of future results. Except as required by applicable securities laws, the Company undertakes no obligation to update such FOFI. FOFI contained in this MD&A has been made as of the date hereof and is provided for the purpose of providing further information about the Company’s anticipated future business operations. Readers are cautioned that the FOFI contained in this MD&A should not be used for purposes other than for which it is disclosed herein.

Non-GAAP Measures

NXT’s accompanying Consolidated Financial Statements were prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). The Company has consistently used US GAAP for the eight most recently completed quarters.

Net Working Capital

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 difference between current assets and current liabilities. It is composed of cash and cash equivalents, accounts receivable and contract assets, prepaid expenses and deposits, accounts payable and accrued liabilities, unearned revenue, the current portion of convertible debentures, the current portion of long-term debt and the current portion of the Company’s lease obligations. Net working capital 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.

Free Cash Flow Per Share

Free Cash Flow Per Share represents the capital generated by the Company and available to allocate for investment in technology, assets, and repayment of debt. Free Cash Flow Per Share is a non-GAAP financial ratio and is not a standardized financial measure and may not be comparable to similar financial measures disclosed by other issuers. Free Cash Flow Per Share is defined as net cash from (used in) operating activities; plus or minus the change in non-cash working capital and adds back investments in technology or assets that have been expensed; all divided by the weighted average shares outstanding for the year (“Free Cash Flow Per Share”).

A reconciliation of Net cash from (used in) operating activities vs Free Cash Flow Per Share for the three months ended March 31, 2026, is as follows:

1. Share units.

Please see “Discussion of Operations – Stock Based Compensation Expenses” for further information.

Description of the Business

NXT is a Calgary-based technology company whose proprietary airborne SFD^® survey system (“SFD^®”), applied in numerous basins around the world, uses the principles of quantum mechanics to infer stress anomalies of exploration interest. The method can be used both onshore and offshore to remotely identify areas conducive to fluid entrapment to recommend areas with commercial hydrocarbon and/or geothermal potential. The SFD^® survey system enables our 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.

Financial and Operational Highlights

Key financial and operational highlights for Q1-26 are summarized below:

Key financial and operational highlights occurring after March 31, 2026, are summarized below:

Discussion of Operations

NXT has entered 2026 on a sound commercial and financial footing. On the commercial side we received the mobilization fee for the next African SFD^® survey and on April 8, 2026, we announced a new contract in South Asia (the “South Asia SFD^® Survey”) allowing us to significantly increase our geographic diversity. We anticipate commencing the upcoming African SFD^® Survey during Q2-26.

The key financial milestone achieved in Q1-26 was the final conversion of the remaining convertible debentures. As a result, all the US$6,172,000 of convertible debentures previously issued have been converted into common shares, leaving NXT with $2.02 million of cash and $3.93 million of net working capital. In addition, $1.54 million of accounts receivable were collected after March 31, 2026.

Our revenue and profitability decreased significantly between Q1-26 and Q1-25 because of the different phases of the contracts we were engaged in each of the respective quarters. During Q1-2025, NXT was in the acquisition phase of the 2025 African SFD^® survey, which involved active flight operations and triggers large-scale revenue recognition. During Q1-26, the company was primarily engaged in the interpretation phase of the AL-Haj SFD^® Survey in Pakistan. During this phase, the focus shifted from survey acquisition to data analysis, resulting in much lower immediate revenue recognition.

With the appointment of Mr. Gerry Sheehan NXT is embarking upon the third major stage in the company’s evolution. The first was the development and demonstration of the efficacy of stress field detection, under inventor and former CEO George Liscicasz, resulting in patents in 47 countries. The second was a critical stage of contract and revenue growth, under Mr. Bruce G. Wilcox. The third, under Mr. Sheehan, will expand services, resources, geographies and clients for NXT.

Advance Application of SFD^® Technology in Canada

On November 24, 2025, the Company received a US$2,000,000 strategic investment by way of a private placement of common shares to its largest shareholder MCAPM LP to advance the application of the Company’s proprietary SFD^® technology within select areas of Western Canada (the “Private Placement”). The Private Placement proceeds are providing NXT with enhanced balance sheet flexibility to accelerate widespread usage of SFD^® data in Canada while preserving its core business model as a technology and service provider.

As part of this process, the Company engaged Baycrest Energy Ltd. to assist in evaluating strategic pathways related to this initiative. During Q1-26 the Company began to evaluate NXT’s extensive proprietary SFD^® data library, which includes more than 50,000 line-kilometers of airborne geophysical data in the Western Canadian sedimentary basin.

SFD^® Survey in Pakistan

During Q1-26, the Company completed the data interpretation phase for its SFD^® survey with AL-Haj Enterprises Private Limited (the “AL-Haj SFD^® Survey”). Recommendations are expected to be delivered to the customer by the end of Q2-26.

SFD^® Surveys in Africa

On September 24, 2024, the Company announced that it signed a contract with its Strategic Alliance Partner, Synergy, to provide a second SFD^® survey for an oil and gas exploration company in Africa (the “African SFD^® Survey”). NXT has now completed SFD^® data acquisition and interpretation of the African SFD^® Survey.

On May 1, 2025, the Company announced that it has entered into an additional contract with Synergy, to provide an SFD^® survey in Africa. Data acquisition operations for this SFD^® contract are expected to commence in Q2-26, and NXT’s interpretations and recommendations for both African SFD^® Surveys are expected to be delivered to the client in Q3-26. A mobilization fee of $346,500 was received in Q1-26 for this additional SFD^® Survey in Africa.

SFD^® Survey in South Asia

On May 22, 2024, the Company announced that it entered a contract to provide an SFD^® survey to an independent oil and gas exploration company in South Asia (the “South Asia SFD^® Survey”). Data acquisition operations for this contract are expected to commence by Q3-26, and NXT’s interpretations and recommendations are expected to be delivered during Q4-26.

New Chief Executive Officer

NXT appointed Mr. Gerry Sheehan as Chief Executive Officer, effective April 20, 2026. Mr. Sheehan is a professional geologist, geophysicist and executive manager having served as a director of NXT since 2021. Mr. Sheehan’s experience and relationships will add great value to NXT as the company scales up its survey activities in areas of substantial potential in a world demanding new sources of oil and gas. His 40 years of experience have included early-stage oil and gas basin evaluation, field appraisal and development, satellite remote sensing and non-conventional resource assessments working with government, large and small E&P independents, state oil companies and regulators. His technical and business development experience in Africa, South Asia, and Europe aligns with NXT’s growth initiatives. Mr. Sheehan’s many accomplishments include being a founding member of the technical team of Tullow Oil Plc for almost 20 years where he served as International Exploration Manager from 1998 to 2004 directing technical activities on wide geographies including North and West Africa, the Indian subcontinent and Europe. Mr. Sheehan is tasked with expanding services, resources, geographies and clients for NXT.

Patents

As of the date of this MD&A, NXT has been granted SFD^® patents on its SFD^® technology in forty-seven jurisdictions, including 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). These patents protect our proprietary SFD^® technology and serve as independent third-party recognition of our technological invention.

Summary of Operating Results

Quarterly operating results. NXT incurred a net loss of $2,415,419 for Q1-26 compared to a net profit of $7,684,518 in Q1-25. The Company recorded SFD^®-related revenues in Q1-26 from the interpretation phase of the Al-Haj SFD^® survey. During Q1-25 NXT recorded revenues from the acquisition phase of the African SFD^® Survey. SFD^®-related costs, net, decreased in Q1-26 versus Q1-25 due to flight costs for the acquisition phase of the African SFD^® Survey and the required major maintenance after the survey incurred in Q1-25. NXT only incurred interpretation-related costs and regular maintenance work on the aircraft in Q1-26. G&A expenses increased $608,823 or approximately 55%, compared to Q1-25, due to higher salary costs, business development travel and SBCE. This was partially offset by decreased professional fees. Interest expense decreased $247,270 (99%) in Q1-26 versus Q1-25, due to the conversion of all the outstanding convertible debentures. On January 5, 2026, the Company recognized a gain on $6,584 on the fair value remeasurement on the conversion of the remaining convertible debentures. On March 31, 2025, the Company recognized a loss of $669,543 on the fair value remeasurement of the outstanding convertible debentures as a result of changes in the US$/CDN$ exchange rates, volatility and the Company’s share price on those dates. More details on each line item are provided herein.

SFD^®-Related Costs, Net

1. Percentages disclosed are approximate figures.

SFD^®-related costs include aircraft operation and maintenance costs. The Company has discontinued offering its aircraft for charter hire to conserve flight hours for SFD^® surveys.

Aircraft operations were $702,432 (68%) lower in Q1-26 versus Q1-25 as major maintenance was performed after the 2025 African SFD^® survey in Q1-25. For Q1-26 routine maintenance was performed on the aircraft. Survey project costs were $1,218,259 (93%) lower versus Q1-25 as the Company executed the acquisition phase of the 2025 African SFD^® survey in Q1-25. There were no acquisition activities in Q1-26, but costs were incurred for the interpretation phase of the Al-haj SFD^® survey.

G&A Expenses

1. Percentages disclosed are approximate figures.

G&A expenses increased $608,823, or approximately 55% in Q1-26 compared to Q1-25 for the following reasons:

Stock-based Compensation Expenses

1. Percentages disclosed are approximate figures.

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 issued in the period and the amortization term based on the number of years for full vesting of the units.

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.

Stock options granted expire, if unexercised, five years from the date granted, and entitlement to exercise them vests at a rate as determined by the Board. On January 6, 2023, the Company granted 2,050,000 incentive stock options at a strike price of $0.216 to employees, officers and directors (the “2023 Options”). The 2023 Options vest upon the occurrence of several milestones relating to the cash received for SFD^® services performed as follows: (i) one-third of the 2023 Options vest upon the collection of US$6.5 million for SFD^® services performed; (ii) one-third of the 2023 Options vest upon the collection of the next US$7.0 million for SFD^® services performed; and (iii) the final one-third of the 2023 Options vest upon collection of an additional US$7.5 million for SFD^® services performed. The Company has reached the first milestone of collecting US$6.5 million for the 2023 Options. The Company estimates that it should reach the remaining two milestones in 2026.

On February 24, 2025, the Company granted 1,400,000 incentive stock options at a strike price of $0.203 to directors of the Company (the “Incentive Options”). The Incentive Options will vest upon the Company achieving a trailing twelve-month free cash flow per share of $0.10. The Company currently estimates that it will achieve this target of $0.10 during Q1-27. Reaching the target has been delayed by one year due to the delayed start date for the second African SFD^® Survey and the increase in the outstanding shares due to the Private Placement.

On December 16, 2025, the Company granted 4,300,000 additional incentive stock options at a strike price of $0.309 to employees and directors of the Company (the “December 2025 Incentive Options”). One half of the December 2025 Incentive Options will vest when the Company achieves a trailing twelve-month free cash flow per share of $0.15. The other half will vest when the Company achieves a trailing 12-month revenue of $25,000,000. The Company currently estimates that it will achieve both targets during Q1-27. Please see “Advisories – Non-GAAP measures” for further information.

The deferred share unit (“DSUs”) plan (the “DSU Plan”) is a long-term plan that permits the grant of DSUs to directors that wish to take their director fees in DSUs instead of cash. One DSU converts to one common share at the retirement, resignation, or death of the Board member. Five directors elected to receive their fees as DSUs during 2026 and 2025.

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 on the first, second and third anniversaries of the date of grant. The Company has historically settled the exercise of vested RSUs with common shares and cash. On February 21, 2024, the Company granted 1,035,000 RSUs to employees and officers. On February 24, 2025, the Company granted 1,875,000 RSUs to employees and officers.

The 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 Toronto Stock Exchange. In 2025 and 2026, the Company elected to issue common shares from the treasury.

SBCE in Q1-26 was higher compared to Q1-25 by $137,763 or approximately 69% for the reasons that follow.  Stock option expense increased $108,011 or 106% as the Company began recognizing expense for the December 2025 Incentive Options in Q1-26 but only recognized the Incentive Options in Q1-25. RSU expense increased 35,064 or 83% as it recognized a full three months of the 2025 RSU grant in Q1-26, but only approximately one month in Q1-25. ESP Plan expense decreased $5,312 or 34% as employees were paid deferred salaries in Q1-25 and therefore contributed a larger dollar amount into the ESP Plan.

Amortization

1. Percentages disclosed are approximate figures.

Property and equipment and related amortization expenses. Property and equipment amortization was consistent between Q1-26 and Q1-25 as the Company did not incur any significant capital expenditures in the period.

IP and related amortization expenses. NXT is amortizing the acquisition costs of the SFD^® IP for both the Hydrocarbon and Geothermal rights over 15-year periods on a straight-line basis. Future amortization expense of $1,685,000 per year for the Hydrocarbon Right and $13,781 per year for the Geothermal Right.

IP is subject to ongoing assessment of potential indicators of impairment of the recorded net book value. No impairments were recognized in either Q1-26 or YE-25. All other SFD^® acquired rights and technology have been expensed.

Other Expenses (Income)

1. Percentages disclosed are approximate figures.

Interest expense, net. This category of other expenses includes interest expense from long-term debt and convertible debentures netted by interest income earned on guaranteed investment certificates.

Interest expense decreased $247,270 (99%) in Q4-25 versus Q1-25, due to the conversion of convertible debentures from Q2-25 to Q1-26.

Foreign exchange gain. This category includes losses and gains caused by changes in the relative currency exchange values of US$ and CDN$. The Company held net US$ assets at March 31, 2026, which included cash and cash equivalents, short-term investments, accounts receivable and contract assets, accounts payable and accrued liabilities, US$ lease obligations, and the security deposit for the aircraft, all of which influence the unrealized foreign exchange gain and loss.

Given the net US$ assets at March 31, 2026, and the weakening of the CDN$ by 1.4% since December 31, 2025, the Company recorded a foreign exchange gain in Q1-26. During Q1-25 the Company recognized a foreign exchange gain due to the large accounts receivable balance and the fluctuation of exchange rates between the recognition date of the accounts receivable and March 31, 2025. The US$ liabilities did not offset this gain as the US$ to CDN$ only changed from 1.4385 to 1.4388 between December 31, 2024, and March 31, 2025.

The Company does not currently enter into hedging contracts but instead uses alternative strategies to reduce the volatility of US dollar liabilities including holding excess US dollars before converting to CDN dollars.

Loss (gain) on fair value remeasurement. The Company recognized a gain of $6,584 in Q1-26 on the fair value remeasurement of the November Debentures (defined herein) on conversion of the remaining US$45,000 on January 5, 2026. They were revalued at their fair value, using level 3 inputs which include the market price, volatility and the price of the Company’s common stock as at the conversion date. Likewise on March 31, 2025, the Company recognized a loss of $669,543 on the fair value remeasurement of the outstanding convertible debentures at that date due to changes in the US$/CDN$ exchange rates, volatility and the Company’s share price.

Intellectual Property. This category of other expenses primarily includes costs related to IP filings and research and development activity related to the SFD^® technology. In Q1-26 and Q1-25 the Company’s IP and other expenses were associated with periodic patent maintenance and renewal fees required during these time periods.

Competition

NXT’s 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 it believes is technically superior to other airborne survey systems. To the Company’s knowledge, there is no other company employing technology comparable to its 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. NXT’s 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 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 (that is, a tract 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. Deploying an SFD^® survey first can provide necessary information to target a seismic program over a limited area of locations selected by SFD^®. This approach can result in a more effective seismic program and reduce the overall cost, time, community resistance, and environmental impact required to locate and qualify a prospect.

The 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 several risks and uncertainties that may affect the Consolidated Financial Statements and are reasonably likely to affect them in the future. These risks and uncertainties are discussed in detail in NXT’s AIF for the year ended December 31, 2025, “Section 5 Risk Factors”, dated March 31, 2026, and available as an electronic copy on NXT’s website at www.nxtenergy.com and on SEDAR+ at www.sedarplus.ca.

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

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:

During Q1-26, SFD^®-related revenue versus the previous quarter decreased due to only the interpretation phase of the Al-Haj SFD^® survey being recognized and as a result the lower revenue also increased the net loss. During Q4-25, SFD^®-related revenue versus the previous two quarters increased due to the Al-Haj SFD^® survey in Q4-25 and as a result also decreased the net loss. During Q3-25, the loss was driven by SFD^®-related costs, net increasing due to costs to support the SFD^® flown surveys and aircraft maintenance costs for upcoming SFD^® surveys. During Q2-25, the Company recorded a net loss due to the fair value remeasurement on the convertible debentures. During Q1-25, the Company’s earned net income due to the African SFD^® Survey. During Q4-24, the Company’s net loss increased due to unrealized foreign exchange losses due to the weakening CDN$ and interest increases due to the issuance of the debentures. In Q3-24, the Company incurred additional G&A costs in anticipation of increased commercial activity, recognized a gain for the fair value remeasurement of the convertible debentures, and unrealized foreign exchange loss (gain) improved due to a strengthening CDN$. In Q2-24, the Company wrote off leasehold improvements due to the 31% office space reduction, recognized a loss for the fair value remeasurement of the convertible debentures, related increased interest expense, and unrealized foreign exchange loss increased due to the net US$ liabilities held by the Company. In each quarter between Q2-24 and Q4-24, the Company incurred net losses due to incurred SFD^®-related costs related to aircraft lease and aircraft maintenance costs, G&A expenses, and non-cash items such as SBCE, which can be a significant expense in any given quarter. More details are provided below:

Liquidity and Capital Resources

Going Concern

The Consolidated 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 continues to be material uncertainties that cast substantial doubt about NXT’s ability to continue as a going concern within one year after the date that the Consolidated 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 Consolidated Financial Statements have been issued.

The Company continues to develop its pipeline of opportunities to secure additional revenue contracts. The Company’s longer-term success remains dependent upon its ability to convert these revenue 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 certainty.

Further financing options that may or may not be available to the Company include the issuance of new equity, debentures or bank credit facilities. The need for any of these options will be dependent on the timing of securing additional SFD^® related revenues and obtaining financing on terms that are acceptable to both the Company and the financier.

The Consolidated 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 Consolidated 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 and short-term deposits as at March 31, 2026, totaled $2,021,578. Net working capital totaled $3,925,348. 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 NXT’s normal practice of obtaining advance payments and progress payments from customers throughout the course of projects, which often span three to four months. In addition, where possible, risk of default on client billings are mitigated using export insurance programs offered by Export Development Canada.

The Company does not have provisions in its leases, contracts, or other arrangements that would trigger additional funding requirements or early payments except if the Company were to default on its office lease, where the current month’s rent plus the next three months would 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 (Non-GAAP Measure)

1. Percentages disclosed are approximate figures.

NXT had net working capital of $3,925,348 as at March 31, 2026.

Net working capital as at March 31, 2026, compared to December 31, 2025, decreased by $1,331,669, or 25%. Funds were received for the mobilization fee for the second African SFD^® Survey which increased deferred revenues. Funds were used to settle accounts payable and accrued liabilities related to preparing for the upcoming SFD^® surveys, and scheduled lease and long-term liability obligations. Prepaid expenses and deposits increased $313,235 or 144% as the US$150,000 deposit on the aircraft will be returned to NXT in March 2027, and expenses incurred for upcoming SFD^® surveys have been prepaid. Accounts payable and accrued liabilities increased due to costs accrued for the Al-Haj SFD^® Surveys and aircraft scheduled maintenance. The remaining US$45,000 of convertible debentures at December 31, 2025, were converted in January 2026. Please see “Advisories – Non-GAAP measures” for further information.

Accounts Payable and Accrued Liabilities

1. Percentages disclosed are approximate figures.

Accounts payable and accrued liabilities decreased by $559,518 or approximately 34%, as at March 31, 2026, compared to December 31, 2025, for the following reasons:

Cash Flow

The overall net changes in cash balances in each of the periods noted above is a function of several factors including any inflows (outflows) due to changes in net working capital balances, funds from and repayment of financings and property, and plant and equipment investments. Further information on the net changes in cash, by each of the operating, financing, and investing activities, is as follows:

Operating cash flow decreased $3,237,399 from Q1-25 to Q1-26 due to receipts from the African SFD^® Survey in Q1-25. Other than the mobilization fee for the 2026 African SFD^® Survey in Q1-26, no other significant payments from accounts receivable were received in the quarter.

Proceeds were received from employees under the ESP Plan in both quarters. Repayments were made toward the HASCAP Loan and aircraft lease as per schedule. Please see the section “Contractual Obligations Leases”

The Company upgraded certain SFD^® equipment in Q1-25. The Company also purchased US$ short-term investments to segregate funds that mature just prior to monthly payment obligations for the Aircraft Lease.

Contractual Obligations

Leases

Office Lease. The Company has a lease that expires on September 30, 2030, for its current office space. Terms of the lease include an implied interest rate of 10% and monthly payments of $19,771.

Aircraft Lease. The Company has a lease on its aircraft lease which expires on March 28, 2027. The Company will own the aircraft at the end of the lease term. Terms of the lease include an interest rate of 12% and monthly payments of US$40,189. The Company has an early purchase option to acquire the aircraft on September 28, 2026. The early purchase option purchase price is the amortized value of the lease liability, plus a four-month interest penalty. The lease is being treated as a finance lease.

The estimated minimum annual commitments for the Company’s lease components as at March 31, 2026, are listed in the following table:

1. Figures are given in $.

2. US$ payments have been converted to CDN$ at a rate of 1.3916.

Convertible Debentures

There were no convertible debentures outstanding as at March 31, 2026.

Debenture Conversions

Between November 8, 2023, and January 11, 2024, the Company issued a total of US$1,872,000 (approximately CAD$2,543,636) of a multi-tranche unsecured convertible debenture (the "November Debentures"). The November Debentures bore interest at 10.0% per annum, paid quarterly in arrears, and are due and payable two years after issuance. The November Debentures were unsecured. Directors of NXT purchased US$147,000 of the November Debentures (approximately CDN$196,686). The November Debentures are convertible to common shares at a fixed conversion price of US$0.1808. On June 26, 2025, Mork Capital converted US$1,347,000 of their November Debentures into 7,450,221 common shares of NXT. On September 23, 2025, US$49,000 of the November Debentures were converted into 271,017 common shares of NXT. During December 2025, US$677,000 of November Debentures were converted into 2,228,979 common shares of NXT. The remaining US$45,000 of the November Debentures were converted into 248,893 common shares of NXT on January 5, 2026.

On May 30, 2025, Ataraxia Capital (“Ataraxia”) converted US$2,300,000 of convertible debentures into 13,540,208 common shares and on June 26, 2025, Mork Capital converted US$3,375,000 of convertible debentures into 15,605,088 common shares (including their November Debentures).

Mork Capital currently owns 37,576,821 common shares. This represents approximately 31.4% of the issued and outstanding common shares as of the date of this MD&A.

Investor’s Rights Agreement

On May 31, 2023, the Company and Ataraxia entered into an Investor Rights Agreement (the “Investor Rights Agreement”) pursuant to which Ataraxia has been granted the right: (i) to nominate one person for election or appointment as a director of the Company; (ii) to have one representative of Ataraxia attend the Company’s Board meetings as an observer (except any portion of a Board meeting where the Company’s relationship with Ataraxia is to be a subject of discussion); (iii) to purchase up to its pro rata portion (calculated on a fully diluted basis) of any securities offered by the Company, subject to certain limitations set forth in the Investor Rights Agreement; and (iv) receive certain information regarding the Company, including annual and quarterly financial statements, annual budgets, the capitalization tables, and access to its premises upon reasonable notification. In each case, Ataraxia will retain the rights set forth in the Investor Rights Agreement for so long as Ataraxia holds common shares representing at least 5% of the outstanding common shares of the Company. Ataraxia currently owns 13,540,208 common shares. This represents approximately 11.3% of the issued and outstanding common shares as of the date of this MD&A.

The Investor Rights Agreement is publicly available under the Company’s profile on SEDAR+ at www.sedarplus.ca.

Long-term Debt (HASCAP Loan)

On May 26, 2021, the Company received $1,000,000 from the Business Development Bank of Canada’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 the Business Development Bank of Canada.

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 as per NXT’s office lease agreement. If the Company were to default on its office lease, the current month’s 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 in the first quarter of the following year if the estimate was low. Conversely, it will receive a refund if the estimate was too high. Currently, the Company believes that the operating cost estimate is reasonable and is consistent with discussions with the landlord under the Company’s office lease.

Transactions with Related Parties

1. US$62 for the three months ended March 31, 2026, and US$143,556 for the three months ended March 31, 2025. Includes interest expense for Board of directors, Ataraxia (2025 only), and Mork Capital (2025 only).

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 include a total of $11,238 ($41,540 as at December 31, 2025) payable to this law firm.

Another member of the Board was a board member of Pana Holdings Mauritius, the parent company of Ataraxia until May 1, 2025. Ataraxia held two-year term convertible debentures until May 30, 2025. Please see the section “Liquidity and Capital Resources – Convertible Debentures”. The terms of the convertible debentures issued to Ataraxia included an annual interest rate of 10%, paid quarterly in arrears with conversion prices of US$0.143 and US$0.24 per common share. The debentures were able to be converted into either common shares or voting preferred shares with an annual dividend rate of 10% paid per quarter for the preferred shares, and they could have been converted on a one-to-one basis into common shares. The convertible debentures were payable on demand.

A third member of the Board is an employee of Mork Capital, which held two-year term convertible debentures until June 26, 2025. Please see the section “Liquidity and Capital Resources – Convertible Debentures”. The terms of the convertible debentures issued to Mork Capital included an annual interest rate of 10%, paid quarterly in arrears with conversion prices of US$0.1808 and US$0.25 per common share.

Certain members of the Board, elected to have most of their Board fees payable at December 31, 2023, transferred into convertible debentures for a total of US$147,000 (CDN$196,686). All of these convertible debentures were converted into common shares of NXT by January 5, 2026. Please see the section “Liquidity and Capital Resources – Convertible Debentures”. In addition, accounts payable and accrued liabilities at March 31, 2026, include a total of $nil, (December 31, 2025 - $2,954 or US$2,152) to Board members for accrued interest on the convertible debentures. The terms of the convertible debentures issued to members of the Board included an annual interest rate of 10%, paid quarterly in arrears with conversion price of US$0.25 per common share.

Accounts payable and accrued liabilities include $313,718 ($291,218 as at December 31, 2025) for Board fees.

Critical Accounting Estimates

In preparing the Consolidated 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 Consolidated 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 Consolidated 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.

Certain estimates and judgments have a material impact where the assumptions underlying these accounting estimates relate to matters that are highly uncertain at the time the estimate or judgment is made or are subjective. In 2026 and 2025, the estimates and judgments included the assessment of impairment indicators of IP and recognition of SFD^® related revenue.

The Company reviews IP for impairment whenever events or changes in circumstances indicate the carrying value may not be recoverable. The Company considers both internal and external factors when assessing potential indicators of impairment of its IP, including the consideration of historical and forecasted SFD^® related revenues, market capitalization, and the SFD^® related revenue multiples compared to industry peers. When indicators of impairment exist, the Company first compares the total of the estimated undiscounted future cash flows or the estimated sale price to the carrying value of an asset. If the carrying value exceeds these amounts, an impairment loss is recognized for the excess of the carrying value over the estimated fair value of the IP.

The Company recognizes SFD^® related revenue in the Consolidated Financial Statements based on the performance obligation for NXT in SFD^® surveys, which are the acquisition, processing, interpretation and integration of SFD^® data. Revenue from the sale of SFD^® survey contracts is recognized over time by measuring the progress toward satisfaction of its performance obligation to the customer. The Company uses direct survey costs as the input measure to recognize revenue in any fiscal period. The percentage of direct survey costs incurred to date over the total expected survey costs to be incurred, provides an appropriate measure of the stage of the performance obligation being satisfied over time. The accounting for contracts that are not complete at the reporting date involves significant judgment, particularly as it relates to determining the total anticipated costs at completion.

Changes in Accounting Policies

The Consolidated Financial Statements have been prepared by management in accordance with US GAAP. The Company has consistently used US GAAP for the eight most recently completed quarters. The accounting policies applied are consistent with those outlined in NXT’s annual audited consolidated financial statements for the year ended December 31, 2025, available on NXT’s website at www.nxtenergy.com and on SEDAR+ at www.sedarplus.ca.

Financial Instruments and Other Instruments

The Company’s non-derivative financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities, deferred revenue and long-term debt. The carrying value of these financial instruments, excluding long-term debt approximates their fair values due to their short terms to maturity. NXT is not exposed to significant interest rate fluctuations 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 because of holding foreign denominated financial instruments. Any unrealized foreign exchange gains and losses arising from such holdings are reflected in earnings at the end of each period. The Company does not currently enter into hedging contracts but instead uses alternative strategies to reduce the volatility of US dollar liabilities including holding excess US dollars before converting to CDN dollars.

The Company has elected to measure the convertible debentures at fair value under ASC 815. Therefore, changes in fair value were measured through profit and loss.

For more information relating to risks, see the section titled “Liquidity and Capital Resources – Net Working Capital”.

Outstanding Share Capital

The dilutive securities in the above table reflect the number of common shares that would be issued if the dilutive securities were fully converted or exercised by the holder of the dilutive security.

Current Director & Officer Common Share Holdings

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 (the “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 for 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.

In evaluating the effectiveness of the Company’s DCPs, as defined under the rules adopted by the Canadian securities’ regulatory authorities and by the SEC, 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:

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 external consultants, legal counsel, the Company’s Disclosure Committee and Audit Committee in reviewing public disclosure.

The Responsible Officers concluded that, as at March 31, 2026, NXT’s ICFR is not effective and as a result, its DCPs are not effective. NXT reached this conclusion based upon its assessment that there is a more than a 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:

In addition, the CFO engages subject matter consultants as the need arises.

There were no changes to the Company’s ICFR in Q1-26.

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 2025 Annual Information Form is available on NXT’s website at www.nxtenergy.com and on SEDAR+ at www.sedarplus.ca.