Nxt-ID, Inc. (NASDAQ:NXTD) Files An 8-K Entry into a Material Definitive Agreement
Item 2.03 Entry into a Material Definitive Agreement

Debt Refinancing

On May 24, 2018, LogicMark, LLC (“LogicMark”), a wholly owned subsidiary of Nxt-ID, Inc. (the “Company”), and Sagard Holdings Manager LP, as administrative agent and collateral agent for the lenders party to the Credit Agreement (collectively, the “Lender”), entered into a Senior Secured Credit Agreement (the “Credit Agreement”), whereby the Lender extended a term loan (the “Term Loan”) to LogicMark in the principal amount of $16,000,000 (the “Debt Financing”). The maturity date of the Term Loan is May 24, 2023. The outstanding principal amount of the Term Loan bears interest at a rate of LIBOR, adjusted monthly, plus 9.5% per annum. Capitalized terms, not otherwise defined in this Report shall have their respective meanings ascribed to them in the Credit Agreement or, as applicable, the referenced agreement.

The Credit Agreement contains customary covenants, including a covenant that (a) LogicMark shall not permit the Fixed Charge Coverage Ratio as of the last day of any Fiscal Quarter, beginning with June 30, 2018, to be less than the correlative ratio indicated, which correlative ratio is initially 3.00 : 1:00 for the Fiscal Quarter beginning June 30, 2018 and increasing by .25 annual increments for each Fiscal Quarter until March 31, 2021 and thereafter, the correlative ratio is 4.00 : 1.00, and (b) LogicMark shall not permit the Leverage Ratio as of the last day of any Fiscal Quarter, beginning with June 30, 2018, to exceed the correlative ratio indicated which correlative ratio is initially 2.60 : 1:00 for the Fiscal Quarter beginning June 30, 2018 and decreasing by various annual increments until for each Fiscal Quarter until March 31, 2021 and thereafter, the correlative ratio is 2.00 : 1.00.

The performance of LogicMark under the Credit Agreement is secured by: (a) a senior lien granted to a Security Agreement on all of the assets of LogicMark, the Company, and 3D-ID, LLC and Fit-Pay, Inc., the Company’s subsidiaries; (b) a senior lien granted to an Intellectual Property Security Agreement on all of the intellectual property assets of the foregoing companies; and (c) a pledge of the Pledged Securities of the foregoing companies to a Securities Pledge Agreement. The performance of LogicMark is guaranteed to a guaranty under a Guaranty Agreement by the Company, 3D-ID, LLC and Fit-Pay, Inc.

The foregoing description of the Credit Agreement, the Security Agreement, the Intellectual Property Security Agreement, the Securities Pledge Agreement, and the Guaranty Agreement, are qualified in their entirety by reference to the provisions of the agreements filed as Exhibits 10.1, 10.2, 10.3, 10.4, and 10.5, respectively, to this Report, which are incorporated by reference herein.

Warrants and Registration Rights

In addition to entering into the Credit Agreement, the Company issued two Common Stock Purchase Warrants to the Lender. Each Warrant is exercisable for an aggregate of 244,081 shares of the Company’s Common Stock. Each Warrant will be exercisable beginning on May 24, 2018, and will be exercisable for a period of five years. The exercise price per Warrant Share, is $3.90 for the first Warrant and $4.88 for the second Warrant. The exercise price and the amount of shares of the Company’s common stock issuable upon exercise of each Warrant is subject to adjustment upon certain events, such as stock splits, combinations, dividends, distributions, reclassifications, mergers or other corporate change and dilutive issuances. The foregoing description of the Warrants is qualified in its entirety by reference to the provisions of the form Common Stock Purchase Warrant filed as Exhibit 4.1 to this Report, which is incorporated by reference herein.

Each Warrant contains a covenant to register to which the Company covenants that within 90 days of May 24, 2018, at the Company’s sole cost and expense, it will file or cause to be filed a Registration Statement covering the sale or resale of the Warrant Shares, and will promptly provide confirmation of such registration to the Holder. To the extent a legal opinion is required in connection therewith, such opinion shall be obtained by the Company at the Company’s expense. In no event shall the Company be responsible for any broker or similar commissions of any Holder or any legal fees or other costs of the Holder.

A.G.P./Alliance Global Partners, offering securities through Euro Pacific Capital Inc., served as the Placement Agent for the Company.

Item 2.03Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information set forth in Item 2.03 hereof is incorporated herein by reference.

Item 2.03Unregistered Sales of Equity Securities

The information set forth in Item 2.03 hereof is incorporated herein by reference.

The issuance of the Warrants were made in reliance upon exemptions from registration to Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”) and Rule 506(b) of Regulation D promulgated under the Securities Act.

Item 2.03Other Events

On May 29, 2018, the Company issued a press release (the “Press Release”) announcing the Debt Refinancing. A copy of the Press Release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

Item 2.03.Financial Statements and Exhibits.

(d) Exhibits

Nxt-ID, Inc. Exhibit
EX-4.1 2 f8k052418ex4-1_nxtidinc.htm FORM OF WARRANT Exhibit 4.1    Execution Version   NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933,…
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About Nxt-ID, Inc. (NASDAQ:NXTD)

Nxt-ID, Inc. is a technology company. The Company is focused on products, solutions and services for security on mobile devices. The Company’s core technologies consist of those that support digital payments, biometric identification, encryption, sensors and miniaturization. It has three lines of business: mobile commerce (m-commerce), primarily through the application of secure digital payment technologies; biometric access control applications, and Department of Defense contracting. It intends to use its core biometric facial and voice recognition algorithms to develop security applications (both cloud based and locally hosted) that can be used for companies, as well as individuals, law enforcement, the defense industry, and the United States Department of Defense. Its offerings include Wocket, a physical electronic smart wallet; the NXT Smartcard, a standalone smartcard; Wi-Mag, an antenna and payment technology, and 3D FaceMatch and 3D SketchArtist facial recognition products.