Item 2.01 Completion of Acquisition
or Disposition of Assets.
On September 9, 2019 (the “Effective
Date”), Nxt-ID, Inc. (the “Company”) entered into a stock purchase agreement (the “Purchase Agreement”),
by and between Garmin International, Inc., a Kansas corporation (“Garmin”), the Company and Fit Pay, Inc., a Delaware
corporation and wholly owned subsidiary of the Company (“Fit Pay”), pursuant to which the Company sold and transferred
all of the issued and outstanding shares of capital stock of Fit Pay, which consisted of 1,000 shares of common stock, par value
$0.0001 per share, of Fit Pay (the “Shares”), to Garmin (the “Sale”). As previously disclosed in the Company’s
public filings with the U.S. Securities and Exchange Commission (the “SEC”), the Company conducted its payments business
through Fit Pay, and Fit Pay provided technology, platform and tokenization services to Garmin to power Garmin Pay™, a contactless
payment feature included on smartwatches manufactured by Garmin. Fit Pay’s financial technology business had been previously
reclassified to discontinued operations in the third quarter of 2018. In consideration for the Shares, Garmin paid the Company
an aggregate amount of approximately $3.32 million in cash (the “Purchase Price”). A portion of the net proceeds received
by the Company pursuant to the Purchase Agreement were used to pay in full a promissory note issued by the Company to one of its
directors (the “Director Note”), as well as to pay down the promissory note that had been issued pursuant to the Credit
Agreement (the “Promissory Note”). Garmin previously paid the Company $500,000 of the Purchase Price as an advance
on August 7, 2019, and paid the remainder of the Purchase Price at the closing of the Sale. The Company anticipates recording a
loss associated with the Sale, however it has not yet closed its books and records for the current period and cannot yet quantify
the loss at this time.
In connection with the Purchase Agreement,
the Company entered into a Consent and Waiver to Senior Secured Credit Agreement and Release of Liens, dated as of September 9,
2019 (the “Consent”), by and among the Company, FitPay, LogicMark, LLC, a Delaware limited liability company and wholly
owned subsidiary of the Company (“LogicMark”), 3D-ID, LLC, a Florida limited liability company and wholly owned subsidiary
of the Company (“3D-ID”), the Lenders (as defined below) and an administrative agent and a collateral agent for the
Lenders (the “Agent”), pursuant to which the parties thereto agreed to modify the terms of that certain Senior Secured
Credit Agreement, dated as of May 3, 2019, by and among LogicMark, each financial institution from time to time party thereto as
lender (the “Lenders”) and the Agent (the “Credit Agreement”), in order to consent to the (i) disposition
of Fit Pay to Garmin (ii) termination as of the Effective Date of all Equity Interests (as defined in the Credit Agreement) of
Fit Pay pledged by the Company, including termination of that certain pledge amendment, dated July 24, 2019, by and between the
Company and the Agent (the “Pledge Amendment”), (iii) prepayment of the Promissory Note, totaling approximately $1.99
million, with a portion of the proceeds payable to the Company pursuant to the Purchase Agreement to pay the Director Note in full,
an amount totaling $425,921, and (iv) release of Fit Pay as of the Effective Date as a guarantor and as a party to each of the
(x) security agreement, dated as of May 3, 2019, by and among the Company, LogicMark, 3D-ID, the Agent, as supplemented by that
certain joinder agreement, dated as of July 24, 2019, by and between Fit Pay and the Agent (the “Security Agreement”),
(y) intellectual property security agreement, dated as of August 6, 2019, made by Fit Pay in favor of the Agent (the “IP
Security Agreement”), (z) guaranty agreement, dated as of May 3, 2019, by and among the Company, 3D-ID and the Agent, as
supplemented by that certain guaranty supplement, dated as of July 24, 2019, by Fit Pay in favor of the Agent (the “Guaranty
Agreement”). Pursuant to the Consent, the Agent and Lenders also waived each event of default under the Promissory Note.
Upon the Effective Date, all liens in favor of the Agent on the assets of Fit Pay were released and terminated.
Also in connection with the Purchase Agreement,
the Company entered into a Manufacturing and Distribution Agreement, dated as of September 9, 2019 (the “Manufacturing Agreement”),
with Garmin Switzerland GmbH, a Swiss corporation (“Garmin Switzerland”), pursuant to which Garmin Switzerland agreed
to grant the Company a non-exclusive right to manufacture, distribute and sell Garmin Switzerland’s proprietary smart wallet
(the “Product”) to certain customers in the U.S. designated by Garmin Switzerland on a royalty-free basis (the “License”),
unless otherwise agreed to by the parties thereto. The Company was also granted a right to sub-license the Product pursuant to
the Manufacturing Agreement. The Company’s has been granted the License for an initial term of three years, which term automatically
renews for additional one-year periods unless either party provides the other with at least ninety days written notice of its election
not to renew such term. The Manufacturing Agreement may be terminated by either party if (i) a party breaches any material provision
of such agreement, which breach is not cured within thirty calendar days after receipt of written notice of such breach, (ii) upon
written notice, a party petitions for reorganization or to be adjudicated to be bankrupt, or if a receiver is appointed for substantially
all of either party’s business, or a party makes a general assignment for the benefit of such party’s creditors, or
if any involuntary bankruptcy petition is brought against such party and has not been discharged within sixty calendar days of
the date the petition is brought, or (iii) in the event of a change of control (as defined in the Manufacturing Agreement).
The foregoing description of the Credit
Agreement, the Security Agreement, the IP Security Agreement and the Guaranty Agreement are qualified in their entirety by reference
to the description of the Credit Agreement in the Company’s Current Report on Form 8-K filed with the SEC on May 9, 2019
and to the full text of such Credit Agreement, Security Agreement, IP Security Agreement and Guaranty Agreement, the forms of which
are attached as Exhibits 10.1, 10.2, 10.4 and 10.5, respectively, to the Company’s Quarterly Report on Form 10-Q for the
quarterly period ended March 31, 2019, filed with the SEC on May 15, 2019, and which are incorporated herein in their entirety
by reference. The foregoing description of the Manufacturing Agreement is qualified in its entirety by reference to the full text
of the Manufacturing Agreement, filed as Exhibit 10.1 to this Current Report on Form 8-K, and which is incorporated herein in its
entirety by reference.