MCAPM, LP Acquires Convertible Debenture of NXT Energy Solutions Inc.

Rhea-AI Summary

MCAPM, LP announced the acquisition of US$2,000,000 in unsecured convertible debentures of NXT Energy Solutions on May 31, 2024. These debentures, with a 10% annual interest rate, are convertible into NXT common shares at US$0.25 per share, totaling 8,000,000 shares upon conversion. However, conversion requires NXT shareholder approval due to existing holdings. Mork Capital, which includes MCAPM, LP and Michael P. Mork, will potentially increase its stake from 19.1% to 28.1%. Additionally, Mork Capital will nominate Peter Mork to NXT's board of directors at the upcoming annual general meeting on July 15, 2024. This transaction is for investment purposes, with no immediate plans for further acquisitions or changes in company structure.

Positive

• MCAPM, LP acquired US$2,000,000 in debentures, showing strong financial backing.
• Debentures have a 10% annual interest rate, offering a solid return until maturity in 2026.
• Potential conversion could increase Mork Capital's share ownership to 28.1%, indicating confidence in NXT's future.
• Appointment of Peter Mork to NXT's board can bring new strategic insights and strengthen governance.

Negative

• Conversion of debentures requires shareholder approval, introducing uncertainty.
• Current ownership of 19.1% might be seen as a risk of potential over-concentration of control by Mork Capital.
• Potential dilution of existing shares if debentures are converted.

CALGARY, AB / ACCESSWIRE / June 3, 2024 / MCAPM, LP announced today that on May 31, 2024, it subscribed for and received an aggregate principal amount of US$2,000,000 (approximately CDN$2,680,000) of unsecured convertible debentures (the "Debentures") of NXT Energy Solutions Inc. (TSX:SFD) ("NXT") in a non-brokered private placement. The Debentures bear interest at 10.0% per annum and are due and payable in full on May 31, 2026. The Debentures are convertible into common shares in the capital of NXT (the "Common Shares") at a conversion price of US$0.25 (CDN$0.3412) per Common Share which provides MCAPM, LP with the right to obtain an additional 8,000,000 Common Shares. However, due to the current shareholdings of MCAPM, LP, together with Michael P. Mork (collectively, "Mork Capital") in NXT, no conversion of the Debentures can occur until shareholder approval of NXT's shareholders is obtained. Mork Capital currently own an aggregate of 14,921,233 Common Shares, representing 19.1% of the currently issued and outstanding Common Shares of NXT. With the acquisition of the Debentures, Mork Capital will have the right to own, after conversion of the Debentures, 30,526,321 Common Shares, representing approximately 28.1% of the issued and outstanding Common Shares (after giving effect to the conversion of the full amount of Debentures). NXT has agreed to nominate a representative from Mork Capital for appointment to its board of directors. Mork Capital is nominating Peter Mork for appointment to NXT's board of directors at NXT's annual general meeting scheduled to be held on July 15, 2024.

The head office address of NXT is 302 3320 17th Avenue SW Calgary, Alberta, Canada T3E 0B4. The head office of MCAPM, LP is 132 Mill Street, #204, Healdsburg California, 95448

This news release is issued pursuant to National Instrument 62-103 - The Early Warning System and Related Take-Over Bid and Insider Reporting Issues, which also requires a report to be filed with regulatory authorities in each of the jurisdictions in which NXT is a reporting issuer containing information with respect to the foregoing matters (the "Early Warning Report"). A copy of the Early Warning Report will be available under NXT's profile at www.sedarplus.com or may be obtained by contacting Mork Capital at (707) 431-1057.

Mork Capital is acquiring the Debentures, and the Common Shares into which the Debentures are convertible, for investment purposes. Mork Capital may, from time to time, acquire additional Common Shares or other securities of NXT or dispose of some or all of the Common Shares or other securities of NXT that it owns at such time. Mork Capital currently has no other plans or intentions that relate to or would result in any of the following: the acquisition of additional securities of NXT, or the disposition of securities of NXT; a corporate transaction, such as a merger, reorganization or liquidation, involving NXT or any of its subsidiaries; a sale or transfer of a material amount of the assets of NXT or any of its subsidiaries; a change management of NXT, including any plans or intentions to change the term of directors; a material change in the present capitalization or dividend policy of NXT; a material change in NXT's business or corporate structure; a change in NXT's charter, bylaws or similar instruments or another action which might impede the acquisition of control of NXT by any person or company; a class of securities of NXT being delisted from, or ceasing to be authorized to be quoted on, a marketplace; NXT ceasing to be a reporting issuer in any jurisdiction of Canada; or soliciting proxies from any securityholders of NXT; but, depending on market conditions, general economic and industry conditions, trading prices of NXT's securities, NXT's business, financial condition and prospects and/or other relevant factors, Mork Capital may develop such plans or intentions in the future.

Contact Information

For investor and media inquiries please contact for NXT Energy Solutions Inc.:

Eugene Woychyshyn	Michael Baker
Vice President of Finance & CFO	Investor Relations
302, 3320 - 17th AVE SW	302, 3320 - 17th AVE SW
Calgary, AB, T3E 0B4	Calgary, AB, T3E 0B4
+1 403 206 0805	+1 403 264 7020
nxt_info@nxtenergy.com	nxt_info@nxtenergy.com
www.nxtenergy.com	www.nxtenergy.com

For MCAPM LP:

Michael P. Mork

General Partner, MCAPM LP

132 Mill Street, #204

Healdsburg California, 95448

Forward-Looking Statements

The information in this news release has been prepared as at May 31, 2024. Certain statements in this news release, referred to herein as "forward-looking statements", constitute "forward-looking information" under the provisions of Canadian provincial securities laws. These statements can be identified by the use of words such as "expected", "will" or similar terms. Forward-looking statements in this news release include statements relating to Mork Capital's future plans regarding NXT and the potential appointment of a representative to the board of directors.

SOURCE: NXT Energy Solutions, Inc.

View the original press release on accesswire.com

FAQ

What is the interest rate on NXT Energy Solutions' debentures acquired by MCAPM, LP?

The debentures have an interest rate of 10.0% per annum.

When are the debentures acquired by MCAPM, LP due?

The debentures are due and payable in full on May 31, 2026.

At what price can the debentures be converted into NXT Energy Solutions' common shares?

The debentures can be converted at a price of US$0.25 per common share.

How many common shares can MCAPM, LP acquire upon converting the debentures?

MCAPM, LP can acquire 8,000,000 common shares upon conversion.

What percentage of NXT Energy Solutions' shares will Mork Capital own after converting the debentures?

Mork Capital will own approximately 28.1% of the issued and outstanding common shares after conversion.

Who is Mork Capital nominating to NXT Energy Solutions' board?

Mork Capital is nominating Peter Mork to NXT's board of directors.

When is NXT Energy Solutions' annual general meeting scheduled?

NXT's annual general meeting is scheduled for July 15, 2024.