Item 1.01
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Entry into a Material Definitive Agreement.
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On December 21, 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 lead placement
agent, on a “reasonable best efforts” basis, in connection with the registered direct public offering (the “Offering”)
of an aggregate of 1,750,000 shares of the Company’s common stock, par value $0.0001 per share (the “Shares”),
for an aggregate purchase price of $7,000,000. The Shares are being offered at a price of $4.00 per share.
Additionally, Maxim
Group LLC agreed to serve as a co-placement agent in the Offering.
The Company expects the Offering to close on
or about December 26, 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
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 6% of the gross cash proceeds received by the Company from the sale of the Shares in the Offering and for its out
of pocket expenses, which includes 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 $6.48 million. The Company will use the net proceeds to
the
Company intends to use the proceeds for further debt reduction on its balance sheet, to fund its Crypto Currency exchange product
development, and for general corporate purposes.
The Shares 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 Offering on or about December 26, 2017.
The foregoing description of the Placement
Agency Agreement and the Purchase Agreement are qualified in their entirety by reference to the full text of the Placement Agency
Agreement, and the Purchase Agreement the forms of which are attached as Exhibit 1.1 and Exhibit 10.1, 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, 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.
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