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.