SEBASTIAN, Florida, October 22, 2018 /PRNewswire/ --
Nxt-ID, Inc. (NASDAQ: NXTD) today released a
shareholder update regarding LogicMark and the strategy and process for its proposed spin-off of its payments, authentication and
credential management business.
On September 21, 2018, Nxt-ID announced that it intends to separate its payments,
authentication, and credential management business into an independent company and distribute shares of the newly created company
to its shareholders through the execution of a spin-off, which the Company believes will qualify as a tax-free distribution.
Immediately following the transaction, Nxt-ID shareholders who owned common shares of Nxt-ID at the record date of October 17, 2018, will own shares of both companies. The record date was set for October
17, 2018 to allow shares purchased on October 15, 2018 to clear and be recorded on the
shareholder ledger.
The new company, PartX, Inc., will include the assets acquired in the May 2017 business
combination with Fit Pay, Inc. as well as the payment, authentication, and credential management assets that the Company
developed since inception. Following the spin-off, the PartX has a provisional investment commitment for $6.0 million to fund its operations. PartX plans to apply for listing on the NASDAQ exchange.
LogicMark
Our LogicMark subsidiary has grown substantially since we acquired the company in July 2016.
Unaudited revenue for the trailing twelve months ended September 30, 2018 was approximately
$17.4 million and Non GAAP Operating income for the twelve months ended September 30, 2018, adjusted for depreciation, amortization and non-cash charges was approximately $7.8 million, almost twice as much as when the company was acquired in 2016. LogicMark's core business is
derived from sales to the Veteran's Administration and wholesale distribution channels.
"We believe that LogicMark's strong core business and expertise in patient monitoring provides an ideal base for expansion
into this sector of healthcare," said Gino Pereira, CEO of NXT-ID. "We are making significant
progress toward building new distribution channels for the LogicMark family of products. As a result of a shift in the age
structure, it is estimated that 19 percent of the population will be aged 65 and older by 2030. In addition, we are developing
new wearable monitoring products to further extend our market beyond the senior population. These devices are designed for
students, children and workers in industries where personal safety is important. Furthermore, we are expanding into telemedicine
where we will offer monitoring services for the chronically ill, with the objective of reducing healthcare costs by early
detection of adverse symptoms allowing for more timely medical intervention."
"This spin-off transaction will free up cash flow that will allow LogicMark to fully pursue these new markets and
opportunities."
Spin-off Strategy
"The fundamental reason we are pursuing this transaction is that we believe the value of both of our key lines of business is
not reflected in the Company's valuation. This transaction is designed to unlock that value by providing a direct pure play
investment for shareholders in each strategy. While we have a process go through to complete the transaction, the goal is to have
the inherent value of both our lines of business be more fully realized. The payments and authentication business is at a
different stage of development compared to the healthcare business and needs some additional runway to achieve its full
potential. We believe that this is best served as a stand-alone entity. In addition, it will provide current and future investors
in an opportunity to invest in both businesses with a more clearly defined strategy and more transparency into the results and
progress toward achieving that strategy."
Transaction Update
"The next step in the process of completing the spin-off is the filing of an information statement, which will provide
additional details about the transaction and the resulting two businesses. It appears likely that our original estimated
completion date of November 15 will be pushed back towards the end of the year but we are working
diligently through the process."
PartX, Inc. (Fit Pay, Inc. and Additional Assets)
"Our payments, credential management and authentication business, currently operating as our Fit Pay, Inc. subsidiary,
continues to make strides in the commercialization and scaling of its business. Its flagship customer, Garmin International, now
features Garmin Pay, which is powered by Fit Pay on 10 of its smartwatches. The global footprint of Garmin Pay also continues to
grow. More than 200 issuers in 26 countries now enable Garmin Pay their account holders. This growing network increases the
activation of the Garmin Pay feature, which is a key driver of the Fit Pay business.
"In addition, it was announced last week the Fit Pay is included among companies participating in a new tokenization program
from Visa. This new program significantly increases the addressable market for Fit Pay's services, allowing it to provide
tokenization services to merchants and e-commerce companies.
Conclusion
"We believe that the remaining business in NXT-ID will provide a firm foundation for continued significant growth. This
transaction is a critical step toward realizing the inherent value of both our subsidiaries in the market and will strategically
position both companies to be able to execute on their full potential."
Transaction Details
For further details about the spin-off transaction, please see the Form 8-K filed by Nxt-ID with the Securities and Exchange
Commission on September 21, 2018. Completion of the tax-free spin-off and the new company's
subsequent listing is not assured and will be subject to final approval by the Nxt-ID Board of Directors, approval by NASDAQ and
a number of factors, including market conditions, the execution of inter-company agreements, lender's consents and other
matters. Nasdaq has not approved the spin-off company for listing and there are no guarantees that the company will be able
to list on Nasdaq or any other exchange.
About Nxt- ID, Inc.
Nxt-ID, Inc. (NASDAQ: NXTD) provides a comprehensive platform of technology
products and services that enable the Internet of Things (IoT). With extensive experience in access control, biometric and
behavior-metric identity verification, security and privacy, encryption and data protection, payments, miniaturization and sensor
technologies, Nxt-ID develops and markets groundbreaking solutions for payment and IoT applications. Its industry-leading
technology products and solutions include MobileBio®, a suite of biometric solutions that secure consumers' mobile platforms, the
Wocket™, a next-generation smart wallet and the Flye, a digital credit card developed in collaboration with WorldVentures.
Nxt-ID includes three mobile and IoT-related subsidiaries: LogicMark,
LLC, a manufacturer and distributor of non-monitored and monitored personal emergency response systems ("PERS") sold through
dealers/distributors and the United States Department of Veterans Affairs; Fit
Pay, Inc., a proprietary technology platform that delivers end-to-end solutions to device manufacturers for contactless
payment capabilities, credential management, authentication and other secure services within the IoT ecosystem, and 3D-ID LLC,
which is engaged in biometric identification and authentication. Learn more about Nxt-ID at http://www.nxt-id.com .Fit Pay and the Fit Pay Payment Platform are the sole property of Fit Pay, Inc. For Nxt-ID
Inc. corporate information contact: info@nxt-id.com
Statement regarding use of non-GAAP financial measures
In this press release, the Company's financial results and financial guidance are provided in accordance with accounting
principles generally accepted in the United States (GAAP) and using certain non-GAAP financial
measures. Management believes that presentation of operating results using non-GAAP financial measures provides useful
supplemental information to investors and facilitates the analysis of the Company's core operating results and comparison of
operating results across reporting periods. Management also uses non-GAAP financial measures to establish budgets and to manage
the Company's business.
Forward-Looking Statements for Nxt-ID: This press release contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Forward-looking statements reflect management's current expectations, as of the
date of this press release, and involve certain risks and uncertainties. Forward-looking statements include statements herein
with respect to the successful execution of the Company's business strategy. The Company's actual results could differ materially
from those anticipated in these forward-looking statements as a result of various factors. Such risks and uncertainties include,
among other things, our ability to establish and maintain the proprietary nature of our technology through the patent process, as
well as our ability to possibly license from others patents and patent applications necessary to develop products; the
availability of financing; the Company's ability to implement its long range business plan for various applications of its
technology; the Company's ability to enter into agreements with any necessary marketing and/or distribution partners; the impact
of competition, the obtaining and maintenance of any necessary regulatory clearances applicable to applications of the Company's
technology; and management of growth and other risks and uncertainties that may be detailed from time to time in the Company's
reports filed with the Securities and Exchange Commission.
Media Contacts:
Chris Orlando
chris.orlando@nxt-id.com
+1-760-468-7273
D. Van Zant
+1-800-665-0411
press@nxt-id.com
SOURCE Nxt-ID, Inc.