Item 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
signature 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 (5
th
) 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 pursuant 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”), pursuant to the registration statement
of which the aforementioned prospectus supplement and the accompanying base prospectus form a part and are not being offered pursuant
to aforementioned prospectus supplement and the accompanying base prospectus. The Purchase Warrants are being offered pursuant
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 Exhibit 5.1
hereto. Exhibit 5.1 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.