NXT Energy Solutions Inc., despite a sharp decline in performance, has initiated a "three-phase growth" through debt-to-equity conversion and order acquisition.

NXT Energy Solutions experienced a significant decline in sales and turned to losses in the first quarter of 2026, but by converting debt into equity and securing new orders, they reduced financial burdens and laid the groundwork for a rebound. Additionally, with the appointment of a new CEO and full acquisition of SFD® technology, the company is fully launching its “Third Phase of Growth.”

First quarter performance, sales plummeted due to base effects

NXT Energy Solutions (NSFDF) announced that as of March 31, 2026, sales related to SFD® amounted to $110k, approximately 165 million Korean won, based on the Korean currency. This is a sharp decrease compared to $12.46 million in the first quarter of last year. The company explained that this was due to differences in contract execution phases.

Net profit also turned into a loss. From a profit of $7.68 million in Q1 2025, it shifted to a net loss of $2.42 million in Q1 2026. However, short-term poor performance alone does not necessarily indicate a weakened business foundation, as revenue recognition timing for large projects varies significantly between quarters.

All convertible bonds converted into stock… financial structure improved

The most notable aspect this quarter is the improvement in financial structure. NXT Energy Solutions fully converted $6.17 million of convertible bonds into equity. As a result, interest burdens and repayment pressures were greatly reduced, with net working capital at the end of the quarter at $3.93 million, and cash and short-term investments at $2.02 million.

Previously, in Q3 2025, about 92.7% of all convertible bonds had also been converted into approximately 29.4 million common shares. This is seen as providing an important “buffer” for exploration service companies with high performance volatility.

Orders in Africa and South Asia… Pakistan project also completed

NXT Energy Solutions recently announced that it secured new SFD® survey service contracts in Africa and South Asia. Particularly, a contract with an independent oil and gas exploration company in South Asia plans to start data collection in Q3 2026, with interpretation and recommendations provided in Q4. Details are not disclosed at the client’s request.

Prior to this, the company completed the data collection phase of an SFD® survey in Pakistan on December 4, 2025, in partnership with AL-Hajj Enterprise. To execute subsequent projects, the survey aircraft has returned to Canada for routine maintenance. This indicates that NXT Energy Solutions is moving beyond one-time orders and continuing regional expansion momentum.

Leadership change, announcing “Third Phase of Growth”

On April 20, 2026, the company appointed Gerry Sheehan as CEO. Gerry Sheehan is a professional geologist and geophysicist with 40 years of experience, serving on the NXT board since 2021. Former CEO Bruce G. Wilcock will step down from management but remain on the board.

Management described this personnel change as the start of the “Third Growth Phase,” focusing on expanding services, broadening resource scope, achieving regional diversification, and enlarging the customer base. This is interpreted as a turning point from a technology-focused exploration company toward a broader application market.

Full ownership of SFD® technology, enhanced business scalability

NXT Energy Solutions’ mid- to long-term competitiveness is also confirmed by changes in the rights structure of the SFD® technology. The company announced that in December 2025, it acquired the remaining rights held by the heir of founder and former CEO George Liszicasz, gaining full ownership of SFD® technology across all current and future applications.

Previously, the company only held rights in hydrocarbon and geothermal fields, but through this transaction, the scope expanded to mineral systems and other subsurface resources. For the company, this means controlling a key foundation to broaden SFD® application markets.

2025 was a “turning point”… sales surged 2,437%

In fact, the annual performance of 2025 showed structural improvements. NXT Energy Solutions’ sales in 2025 reached CAD 16.35 million, a sharp increase of 2,437%. Net losses narrowed to CAD 2.32 million, cash and short-term investments improved to CAD 3.92 million, and net working capital improved to CAD 5.26 million.

The company explained that, due to a non-cash revaluation expense of CAD 5.2 million, it recorded a loss on the surface, but excluding this expense, pre-tax operating profit was about CAD 2.88 million. This indicates a gap between accounting losses and actual operational cash flow.

Major shareholder support continues

Behind the financial stability is also support from the major shareholder. Moke Capital, in November 2025, acquired 7,055,000 common shares of NXT Energy Solutions at CAD 0.40 per share through a non-brokered private placement, totaling CAD 110k.

This transaction increased Moke Capital’s stake from approximately 27.94% to 32.30%. At the same time, the company attracted a strategic investment of $2 million and announced plans to expand SFD® technology applications in Western Canada. This is seen as a strategic move to maintain a “technology + service” model rather than licensing the technology, while ensuring financial flexibility.

NXT Energy Solutions is currently experiencing a short-term performance gap, but with full ownership of SFD® technology, capital expansion, new order acquisition, and management changes, the company is undergoing a structural improvement. While quarterly results still face pressure, the market is watching whether it can evolve from an exploration service provider into a broader resource analysis platform.

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