Nxt-ID, Inc. (NASDAQ:NXTD) Files An 8-K Entry into a Material Definitive AgreementItem 1.01 Entry into a Material Definitive Agreement.
On July 10, 2017, Nxt-ID, Inc., a Delaware corporation (the “Company”), entered into a placement agency agreement (the “Placement Agency Agreement”) with Aegis Capital Corp. (the “Placement Agent”) under which the Placement Agent agreed to serve as the sole placement agent, on a “reasonable best efforts” basis, in connection with the registered direct public offering (the “Registered Direct Offering”) of an aggregate of 2,170,000 shares of the Company’s common stock, par value $0.0001 per share (the “Shares”) and pre-funded warrants (the “Pre-Funded Warrants”) to purchase 230,000 shares of Common Stock, for an aggregate purchase price of $3,432,000. Also on July 10, 2017, to effect the Registered Direct Offering, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with certain institutional investors named in the pages thereto (the “Purchasers”) under which we agreed to issue and sell the Shares and Pre-Funded Warrants directly to the Purchasers.
The Shares are being offered at a price of $1.43 per share. The Pre-Funded Warrants will have an exercise price of $0.01 per share as the Company will have already received $1.42 per Pre-Funded Warrant.(the prefunded amount). The Pre-Funded Warrants will be exercisable immediately upon their issuance and will expire five (5) years from the date of issuance. Subject to limited exceptions, a holder of the Pre-Funded Warrants will not have the right to exercise any portion of its Pre-Funded Warrant if the holder, together with its affiliates, would beneficially own over 9.99% of the number of shares of Common Stock outstanding immediately after giving effect to such exercise.
In a concurrent private placement (the “Private Placements”; together with the Registered Direct Offering, the “Offering”), we are also selling to the Purchasers, for no additional consideration, a warrant (each a “Purchase Warrant” and collectively, the “Purchase Warrants”) to purchase 0.75 of a share of Common Stock for each Share purchased for cash in the Offering as well as each share of Common Stock underlying the Pre-Funded Warrants. The Purchase Warrants will be exercisable beginning on the six (6)-month anniversary of the date of issuance (the “Initial Exercise Date”), at an exercise price of $2.00 per share and will expire on the fifth (5th) anniversary of the Initial Exercise Date.
The Company expects the Offering to close on or about July 13, 2017, subject to the satisfaction of customary closing conditions in the Purchase Agreement. The Purchase Agreement contains customary representations, warranties and agreements of the Company and the Purchasers and customary indemnification rights and obligations of the parties.
The Placement Agency Agreement contains customary representations, warranties and agreements by us and customary conditions to closing. The Placement Agency Agreement provides that the Company will indemnify the Placement Agent against certain liabilities, including liabilities under the Securities Act of 1933, as amended, or reimburse the Placement Agent for payments that the Placement Agent may be required to make because of such liabilities. Additionally, under the Placement Agency Agreement the Company agreed not to contract to issue or announce the issuance or proposed issuance of any Common Stock or Common Stock equivalents for 150 days following the closing of the Offering.
The Placement Agent did not purchase or sell any securities, nor is it required to arrange the purchase or sale of any minimum number or dollar amount of securities. The Placement Agent agreed to use its reasonable best efforts to arrange for the sale of all of the Shares, Pre-Funded Warrants, and Purchaser Warrants being issued and sold in the Offering. The Placement Agent will be paid a cash fee (the “Placement Fee”) in an aggregate amount equal to 7% of the gross cash proceeds received by the Company from the sale of the Shares and Pre-Funded Warrants in the Offering. In addition to the Placement Fee to be paid by the Company, the Company has agreed to reimburse the Placement Agent at the closing non-accountable expense allowance in the aggregate amount of 1% of the gross proceeds in the Offering and for its out-of-pocket expenses, including fees of counsel to the Placement Agent, subject to compliance with FINRA Rule 5110(f)(2)(D). The Company estimates the total expenses of this Offering, which will be payable by us, excluding the Placement Agent fee, will be approximately $100,000. After deducting the Placement Agent fees due to the Placement Agent and our estimated offering expenses, we expect the net proceeds from this offering to be approximately $3.1 million.
The Shares and the Pre-Funded Warrants will be issued to a prospectus supplement to the Company’s effective shelf registration statement on Form S-3 (Registration No. 333-203637), which was initially filed with SEC on April 24, 2015 and was declared effective on May 14, 2015. The Company expects to file the prospectus supplement for the Registered Direct Offering on or about July 10, 2017.
The Purchase Warrants and the shares of Common Stock issuable upon the exercise of the Purchase Warrants (the “Purchase Warrant Shares”), are not being registered under the Securities Act of 1933, as amended (the “Securities Act”), to the registration statement of which the aforementioned prospectus supplement and the accompanying base prospectus form a part and are not being offered to aforementioned prospectus supplement and the accompanying base prospectus. The Purchase Warrants are being offered to an exemption from the registration requirements of the Securities Act provided in Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder. The Purchase Warrants are not and will not be listed for trading on any national securities exchange. The Placement Agent is acting as the sole placement agent for the offer and sale of the Purchase Warrants
The foregoing description of the Placement Agency Agreement, Purchase Agreement, the Pre-Funded Warrants, and the Purchase Warrants are qualified in their entirety by reference to the full text of the Placement Agency Agreement, the Purchase Agreement, the Pre-Funded Warrants, and the Warrants, the forms of which are attached as Exhibit 1.1, Exhibit 10.1, Exhibit 4.2, and Exhibit 4.2, respectively, to this Current Report on Form 8-K (this “Report”), and which are incorporated herein in their entirety by reference. The Company is filing the opinion of its counsel, Robinson Brog Leinwand Greene Genovese & Gluck P.C., relating to the legality of the issuance and sale of the shares of the Shares, the Pre-Funded Warrants, and the Purchase Warrants in the Purchase Agreement, as Exhibit5.1 hereto. Exhibit5.1 is incorporated herein by reference and into the registration statement.
This Report contains forward-looking statements. Forward-looking statements include, but are not limited to, statements that express our intentions, beliefs, expectations, strategies, predictions or any other statements related to our future activities, or future events or conditions. These statements are based on current expectations, estimates and projections about the Company’s business based, in part, on assumptions made by management. These statements are not guarantees of future performances and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in the forward-looking statements due to numerous factors, including those risks discussed in the Company’s Annual Report on Form 10-K, as amended, and in other documents the Company files from time to time with the Securities and Exchange Commission (the “Commission”). Any forward-looking statements speak only by the date on which they are made, and the Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date of this report, except as required by law.
The prospectus supplement relating to the Offering will be available on the Commission’s web site at http://www.sec.gov. Copies of the prospectus supplement may also be obtained from Aegis Capital Corp., 810 Seventh Avenue, 18th Floor, New York, New York 10019, (212) 813-1047.
Item 1.01Unregistered Sales of Equity Securities.
The applicable information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated by reference in this Item 1.01.
On July 10, 2017, the Company also issued a press release announcing the pricing of the Offering. The press release is attached hereto as Exhibit 99.1.
Exhibits 99.1 contains forward-looking statements regarding the Company, and include cautionary statements identifying important factors that could cause actual results to differ materially from those anticipated.
Item 1.01 Financial Statements and Exhibits.
(d)Exhibits.
Nxt-ID, Inc. ExhibitEX-1.1 2 f8k071017ex1i_nxtidinc.htm FORM OF PLACEMENT AGENCY AGREEMENT,…To view the full exhibit click here
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.