Mr. Eugene Woychyshyn reports

NXT ANNOUNCES US$0.5 MILLION CONVERTIBLE DEBENTURE

NXT Energy Solutions Inc. has received the first tranche of a planned $900,000 (U.S.) (approximately $1,252,080 (Canadian)) convertible debenture from Ataraxia Capital for the principal amount of $500,000 (U.S.), (approximately $695,600 (Canadian)), pursuant to the terms of the subscription agreement signed between Ataraxia and NXT in 2023. The Toronto Stock Exchange has provided conditional approval of the final phase of this 2023 agreement.

The debentures bear interest at 10.0 per cent per annum, paid quarterly in arrears, and are due and payable two years after the issue date. The debentures are convertible into common shares of NXT at a conversion price of 24 U.S. cents (32.4 Canadian cents) per common share which provides Ataraxia with the right to obtain up to 2,083,333 common shares of NXT. The debentures may also be converted into voting preferred shares of NXT with an annual dividend rate of 10 per cent paid quarterly in arrears. The preferred shares are not transferable, but may be converted on a one-to-one basis into common shares. The debentures are payable on demand and are secured by a general security agreement, subordinate to the Business Development Bank of Canada's highly affected sectors credit availability program loan.

Ataraxia currently holds $1.4-million (U.S.) (approximately $1,947,680 (Canadian)) of previously issued debentures under the 2023 subscription agreement with a conversion price of 14.3 U.S. cents per common share. Once Ataraxia has completed the tranches of its $900,000 (U.S.) investment, Ataraxia will own an aggregate of $2.3-million (U.S.) debentures and 2023 debentures. With the acquisition of the debentures, Ataraxia will have the right to own, after conversion of the Ataraxia debentures, up to 13,540,209 common shares, representing approximately 14.7 per cent of the issued and outstanding common shares (after giving effect to the conversion of the full amount of the Ataraxia debentures).

The proceeds from the debentures will be used to support the working capital needs of the upcoming SFD surveys in Africa and Southeast Asia and other general and administrative costs which include business development and marketing activities required to transform the existing pipeline of SFD opportunities into firm contracts.

Commenting on the debenture offering, Bruce G. Wilcox, chief executive officer of NXT, said: "We are very pleased and grateful that our strategic alliance partner, Ataraxia Capital, has increased its ownership position in fulfillment of its commitment from 2023. This provides NXT with additional capital to support the successful execution of our upcoming surveys. As previously disclosed, NXT was recently awarded an SFD survey contract in Africa by Synergy Exploration and Production Technologies Ltd., an affiliate of Ataraxia Capital. Data acquisition operations for this contract are expected to commence in the fourth quarter of 2024, and NXT's interpretations and recommendations are expected to be delivered during the first quarter of 2025."

In accordance with MI 61-101 (Protection of Minority Security Holders in Special Transactions), the company's issuance of the debentures to ataraxia constitutes a related-party transaction.

The company has relied on exemptions from the formal valuation and minority shareholder approval requirements of MI 61-101 contained in sections 5.5(a) and 5.7(1)(a) of MI 61-101 in respect to the issuance of the debentures to Ataraxia as the fair market value of the debentures is below 25 per cent of the company's market capitalization (in each case as determined in accordance with MI 61-101).

About NXT Energy Solutions Inc.

NXT Energy Solutions is a Calgary-based technology company whose proprietary 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 its clients to focus its 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 Energy Solutions. NXT Energy Solutions provides its clients with an effective and reliable method to reduce time, costs and risks related to exploration.

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