Item 1.01. Entry into a Material Definitive
Agreement.
On January 29, 2021, Nxt-ID, Inc., a Delaware
corporation (the “Company”), entered into a securities purchase agreement (the “Purchase Agreement”) with
two (2) accredited investors (the “Investors”) providing for an aggregate investment of $4,000,000 by the Investors
for the issuance by the Company to them of (i) 1,476,016 shares of Series E Convertible Preferred Stock, par value $0.0001 per
share, of the Company (the “Series E Preferred Stock”) convertible into an aggregate of up to 2,952,032 shares of common
stock, par value $0.0001 per share, of the Company (the “Common Stock”) that are issuable from time to time upon conversion
of such shares of Series E Preferred Stock (the “Conversion Shares”); (ii) warrants, with a term of five (5) years
exercisable immediately upon issuance, to purchase an aggregate of up to 1,000,000 shares of Common Stock (the “Registered
Warrant Shares”) at an exercise price of $1.23 per share, subject to customary adjustments thereunder (the “Registered
Warrants”); and (iii) warrants, with a term of five (5) years exercisable immediately upon issuance, to purchase an aggregate
of up to 1,952,032 shares of Common Stock (the “Unregistered Warrant Shares” and collectively with the Registered Warrant
Shares, the “Warrant Shares”) at an exercise price of $1.23 per share, subject to customary adjustments thereunder
(the “Unregistered Warrants” and collectively with the Registered Warrants, the “Warrants”). Holders of
the Warrants may exercise them by paying the applicable cash exercise price or, if there is not an effective registration statement
for the sale of the Warrant Shares at the time of exercise, by exercising on a cashless basis pursuant to the formula provided
in the Warrants. The shares of Series E Preferred Stock, the Conversion Shares, the Warrants and the Warrant Shares are collectively
referred to as the “Securities.”
Pursuant to the provisions of the Purchase
Agreement and the Certificate of Designation of Preferences, Rights and Limitations of the Series E Preferred Stock (the “Certificate
of Designation”), each share of Series E Preferred Stock is convertible, at the option of the holders thereof, at any time,
subject to certain beneficial ownership limitations, into two (2) shares of Common Stock determined on a per share basis by dividing
the $2.71 Stated Value (as such term is defined in the Certificate of Designation) by the Conversion Price (as such term is defined
in the Certificate of Designation), which Conversion Price is subject to certain adjustments. In addition, the Purchase Agreement
and the Certificate of Designation also provide for the payment of dividends, in shares of Common Stock, to the holders of the
Series E Preferred Stock, of 10% per annum, based on the Stated Value, until the earlier of (i) the date on which the shares of
Series E Preferred Stock are converted to Common Stock or (ii) twelve (12) months after the Original Issue Date (as such term is
defined in the Certificate of Designation). The shares of Series E Preferred Stock also (i) vote on an as-converted to Common Stock
basis, subject to certain beneficial ownership limitations, (ii) are redeemable at the option of the Company, at any time after
five (5) years after the Original Issue Date, (iii) rank senior to the Common Stock and any class or series of capital stock created
after the Series E Preferred Stock and (iv) have a special preference upon the liquidation of the Company.
The Purchase Agreement also contains customary
representations, warranties and agreements of the Company and the Investors and customary indemnification rights and obligations
of the parties thereto. The Investors have previously invested in securities of the Company or otherwise had pre-existing relationships
with the Company; the Company did not engage in general solicitation or advertising with regard to the issuance and sale of the
Securities. The Investors represented that they are accredited investors and purchased the Securities for investment and not with
a view to distribution.
The Company is registering (i) the 1,476,016
shares of Series E Preferred Stock, (ii) the 2,952,032 Conversion Shares, (iii) the Registered Warrants and (iv) the 1,000,000
Registered Warrant Shares in a registered direct offering (the “Registered Offering”), pursuant to the Securities
Act of 1933, as amended (the “Securities Act”), pursuant to a prospectus supplement to the Company’s currently
effective registration statement on Form S-3 (File No. 333-228624), which was initially filed with the U.S. Securities and Exchange
Commission (the “SEC”) on November 30, 2018, and was declared effective on December 12, 2018 (the “Shelf Registration
Statement”). The Company expects to file the prospectus supplement for the Registered Offering on or about February 1, 2021.
Pursuant to the Purchase Agreement, the
Company is also issuing to the Investors in a concurrent private placement 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 “Private
Placement,” and together with the Registered Offering, the “Offering”), the Unregistered Warrants and the 1,952,032
Unregistered Warrant Shares.
Pursuant to the Purchase Agreement and
the Unregistered Warrants, the Company also agreed to file a registration statement as soon as practicable, but in any event within
forty-five (45) days after the date of the Purchase Agreement, or March 15, 2021, to register the Unregistered Warrant Shares and
to use commercially reasonable efforts to cause such registration statement to be declared effective within ninety (90) days after
the date of the issuance of the Unregistered Warrants and to keep such registration statement effective at all times until the
holders of the Unregistered Warrants and the Unregistered Warrant Shares no longer own any of such securities.
The closing of the Offering is expected
to take place on or about February 2, 2021, subject to the satisfaction of customary closing conditions.
The prospectus supplement relating to the
Registered Offering will be available on the SEC’s web site at http://www.sec.gov.