SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following table sets forth, as of July 20, 2021, information regarding beneficial ownership of our capital stock by:
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each
person, or group of affiliated persons, known by us to beneficially own more than 5% of our Common Stock or Series C Preferred Stock;
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each
of our executive officers;
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each
of our directors; and
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all
of our current executive officers and directors as a group.
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Beneficial ownership is determined according to
the rules of the Securities and Exchange Commission (the “SEC’) and generally means that a person has beneficial ownership
of a security if he, she or it possesses sole or shared voting or investment power of that security, including securities that are exercisable
for shares of Common Stock or Series C Preferred Stock within sixty (60) days of July 20, 2021. Except as indicated by the footnotes below,
we believe, based on the information furnished to us, that the persons named in the table below have sole voting and investment power
with respect to all shares of Common Stock or Series C Preferred Stock shown that they beneficially own, subject to community property
laws where applicable.
For purposes of computing the percentage of outstanding
shares of our Common Stock and Series C Preferred Stock held by each person or group of persons named above, any shares of Common Stock
or Series C Preferred Stock that such person or persons has the right to acquire within sixty (60) days of July 20, 2021 is deemed to
be outstanding, but is not deemed to be outstanding for the purpose of computing the percentage ownership of any other person. The inclusion
herein of any shares of Common Stock and Series C Preferred Stock listed as beneficially owned does not constitute an admission of beneficial
ownership. Unless otherwise identified, the address of each beneficial owner listed in the table below is c/o Nxt-ID, Inc., 288 Christian
Street, Hangar C 2nd Floor, Oxford, CT 06478.
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Shares Beneficially Owned
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% Total
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Common Stock
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Series C Preferred Stock
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Voting
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Name of Beneficial Owner
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Shares
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%(1)
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Shares
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%
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Power (2)
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Non-Director or Officer 5% Stockholders:
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Anson Investments Master Fund LP (3)
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6,117,080
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9.85
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—
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—
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9.85
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Alpha Capital Anstalt (4)
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4,307,591
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7.40
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—
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—
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7.40
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Giesecke & Devrient Mobile Security America, Inc. (5)
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584,795
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1.04
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2,000
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100
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1.04
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Directors and Executive Officers:
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Chia-Lin Simmons
Chief Executive Officer and Director (6)
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2,665,595
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4.76
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—
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4.76
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Mark Archer
Interim Chief Financial Officer
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—
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—
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—
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—
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—
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Vincent S. Miceli (7)
Former Chief Executive Officer and
Former Chief Financial Officer and Director
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577,517
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1.03
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1.03
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Major General David R. Gust, USA, Ret.
Director (8)
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374,919
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*
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*
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Michael J. D’Almada-Remedios, PhD
Director (9)
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374,037
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*
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Daniel P. Sharkey
Director (10)
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369,907
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*
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Robert A. Curtis, Pharm.D.
Director (11)
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284,816
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Directors and Executive Officers as a Group (7 persons)
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4,646,791
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8.24
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8.24
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(1)
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Based on 55,977,493 shares of Common Stock issued and outstanding as of July 20, 2021.
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(2)
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Percentage
of total voting power represents voting power with respect to all shares of our Common Stock, Series C Preferred Stock, which have
the same voting rights as our shares of Common Stock. The holders of our Common Stock and Series C Preferred Stock are each entitled
to one vote per share.
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(3)
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Anson Investments Master Fund LP (“AIMF”) is the holder of warrants exercisable for up to an aggregate of 6,117,080 shares of Common Stock, which warrants are subject to, as applicable, certain beneficial ownership limitations, which provide that a holder of such warrants will not have the right to exercise any portion thereof if such holder, together with its affiliates, would beneficially own in excess of 4.99% or 9.99%, as applicable, of the number of shares of Common Stock outstanding immediately after giving effect to such exercise, provided that upon at least 61 days’ prior notice to us, such holder may increase or decrease such limitation up to a maximum of 9.99% of the number of shares of Common Stock outstanding. Anson Advisors Inc. (“AAI”) and Anson Funds Management LP (“AFM”, and together with AAI, “Anson”) are the co-investment advisers of AIMF. Anson holds voting and dispositive power over the securities held by AIMF. Bruce Winson is the managing member of Anson Management GP LLC, which is the general partner of AFM. Moez Kassam and Amin Nathoo are directors of AAI. Mr. Winson, Mr. Kassam and Mr. Nathoo each disclaim beneficial ownership of these securities except to the extent of their pecuniary interest therein. The principal business address of the AIMF is Walkers Corporate Limited, Cayman Corporate Centre, 27 Hospital Road, George Town, Grand Cayman KY1-9008, Cayman Islands.
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(4)
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Beneficial ownership includes 2,064,042 shares of Common Stock and additional
warrants exercisable into an aggregate of 2,883,159 shares of Common Stock, which warrants are subject to, as applicable, certain beneficial
ownership limitations, which provide that a holder of such warrants will not have the right to exercise any portion thereof if such holder,
together with its affiliates, would beneficially own in excess of 4.99% or 9.99%, as applicable, of the number of shares of Common Stock
outstanding immediately after giving effect to such exercise, provided that upon at least 61 days’ prior notice to us, such holder
may increase or decrease such limitation up to a maximum of 9.99% of the number of shares of Common Stock outstanding. Due to such 4.99%
warrant beneficial ownership limitations in certain warrants held by Alpha Capital Anstalt, its beneficial ownership includes warrants
with 4.99% beneficial ownership limitations exercisable for up to an aggregate of 767,533 shares of Common Stock and excludes warrants
with 4.99% beneficial ownership limitations exercisable for up to an aggregate of 639,610 shares of Common Stock. Alpha Capital Anstalt’s
beneficial ownership also includes certain warrants with 9.99% beneficial ownership limitations exercisable for up to an aggregate of
1,476,016 shares of Common Stock. Konrad Ackermann has voting and investment control over the securities held by Alpha Capital Anstalt.
The principal business address of Alpha Capital Anstalt is c/o Lettstrasse 32, FL-9490 Vaduz, Furstentums, Liechtenstein.
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(5)
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G&D
is the sole holder of our Series C Preferred Stock and thus has 100% of the voting power of our outstanding shares of Series C Preferred
Stock, which have the same voting rights as our shares of Common Stock (one vote per share). The address of Giesecke & Devrient
Mobile Security America, Inc. (“G&D”) is 45925 Horseshoe Drive, Dulles, VA 20166.
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(6)
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Consists
of 2,665,595 shares of restricted Common Stock granted outside the Plans (as defined herein), none of which are vested. Such
shares of restricted Common Stock vest over a period of 48 months, with one quarter of such shares to vest on June 14, 2022, and
thereafter, 1/36 of such shares to vest on the first day of each subsequent month until all such shares have vested, so long as Ms.
Simmons remains in the service of the Company on each such vesting date.
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(7)
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Pursuant to an employment agreement by and between
the Company and Mr. Miceli, effective as of January 1, 2021 (the “Employment Agreement”), the Company agreed to grant
Mr. Miceli 400,000 restricted shares of Common Stock (the “Restricted Shares”) under the Company’s 2013 Long-Term
Stock Incentive Plan or its 2017 Stock Incentive Plan, which were to vest so long as Mr. Miceli remains in the service of the
Company on each such vesting date. Mr. Miceli’s beneficial ownership information in the table above does not reflect such
Restricted Shares. The Company and Mr. Miceli are currently in dispute regarding the basis of the termination of the Employment
Agreement and his employment with the Company. Mr. Miceli has asserted that he has resigned his employment with the Company for
“Good Reason,” pursuant to the terms of the Employment Agreement, as a result of the Company’s breach of certain
of its obligations under the Employment Agreement. In its letter of termination provided to Mr. Miceli, the Company has asserted
that it has terminated Mr. Miceli’s employment as a result of his breach of certain of his obligations under the Employment
Agreement. The Company has and continues to dispute Mr. Miceli’s assertion that he has the right to terminate the Employment
Agreement for “Good Reason” and Mr. Miceli has and continues to dispute the Company’s assertion that it has the
right to terminate the Employment Agreement for “Cause”.
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(8)
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Includes
stock options to purchase 102,146 shares of Common Stock at an average exercise price of $0.39 per share.
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(9)
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Includes
stock options to purchase 102,146 shares of Common Stock at an average exercise price of $0.39 per share.
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(10)
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Includes
stock options to purchase 102,146 shares of Common Stock at an average exercise price of $0.39 per share.
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(11)
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Includes stock options to purchase 102,146 shares of Common Stock at an average exercise price of $0.39 per share.
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PROPOSAL
TO AUTHORIZE THE
BOARD
TO AMEND THE
CERTIFICATE
OF INCORPORATION TO EFFECT A REVERSE STOCK SPLIT OF ALL
OUTSTANDING
SHARES OF COMMON STOCK
(Proposal
No. 1)
Summary
Our Board has unanimously approved a proposal
to amend the Certificate of Incorporation to effect a reverse stock split of all of our outstanding shares of Common Stock by a ratio
in the range of one-for-three to one-for-ten (the “Common Stock Reverse Stock Split”). The proposal provides that our Board
shall have sole discretion pursuant to Section 242(c) of the DGCL to elect, as it determines to be in the Company’s best interests,
solely for the purpose of maintaining the listing of our Common Stock on the Nasdaq Capital Market, whether or not to effect the Common
Stock Reverse Stock Split before the Company’s 2022 Annual Meeting of Stockholders. The Company’s stockholders previously
approved a similar amendment to the Certificate of Incorporation in connection with the Company’s 2019 Annual Meeting of Stockholders.
Originally intended to be utilized prior to May 18, 2020, the Board elected not to implement the reverse stock split at that time owing
to the Common Stock’s volatility during the middle of the COVID-19 pandemic, coupled with the relaxing of the Minimum Bid Price
Requirement (defined below) by the staff of the Listing Qualifications Department of the Nasdaq Stock Market, LLC (“Nasdaq”)
through June 30, 2020. The Company’s stockholders did not approve a similar amendment to the Certificate of Incorporation in connection
with the 2020 Annual Meeting of Stockholders. On January 5, 2021, the Company cancelled a special meeting of its stockholders that was
scheduled to be held on January 15, 2021 in connection with such similar amendment, as Nasdaq had confirmed that the Company had, at that
time, regained compliance with the Minimum Bid Price Requirement, subject to the Company complying with a monitoring period lasting until
July 5, 2021 (the “Monitor Period”), pursuant to Nasdaq Listing Rule 5815(d)(4)(A), and the Company no longer required authorization
to effect a reverse stock split of the outstanding shares of Common Stock at such special meeting. Pursuant to the Monitor Period, should
the closing bid price of the Common Stock remain under $1.00 for thirty (30) consecutive trading days at any point during the Monitor
Period, the Nasdaq Hearings Panel (the “Panel”) would provide written notice to the Company that it will promptly conduct
a hearing with regards to this deficiency. On June 18, 2021, the Company received a determination letter from Nasdaq stating that the
Company has failed to maintain compliance with the Minimum Bid Price Requirement, as the closing bid price of the Common Stock as of May
27, 2021 had not been at least $1.00 for the prior thirty (30) consecutive trading days during the Monitor Period, Accordingly, the Board
has elected to approve this Common Stock Reverse Split and Proposal No. 1 in order to allow the Company to regain compliance with the
Minimum Bid Price Requirement.
Should
the Board proceed with the Common Stock Reverse Stock Split, the exact ratio shall be set at a whole number within the above range as
determined by our Board in its sole discretion. Our Board believes that the availability of alternative reverse stock split ratios will
provide it with the flexibility to implement the Common Stock Reverse Stock Split in a manner designed to maximize the anticipated benefits
for the Company and its stockholders. In determining whether to implement the Common Stock Reverse Stock Split following the receipt
of stockholder approval, our Board may consider, among other things, factors such as:
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the
historical trading price and trading volume of our Common Stock;
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the
then prevailing trading price and trading volume of our Common Stock and the anticipated impact of the Common Stock Reverse Stock
Split on the trading market for our Common Stock;
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our
ability to have our shares of Common Stock remain listed on the Nasdaq Capital Market;
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the
anticipated impact of the Common Stock Reverse Stock Split on our ability to raise additional financing; and
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prevailing
general market and economic conditions.
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The Common Stock Reverse Stock Split will become effective upon filing
of an amendment to our Certificate of Incorporation with the Secretary of State of the State of Delaware. The amendment filed thereby
will set forth the number of shares of Common Stock to be combined into one share of our Common Stock, within the limits set forth in
this proposal. Except for adjustments that may result from the treatment of fractional shares as described below, each holder of our shares
of Common Stock will hold the same percentage of our outstanding Common Stock immediately following the Common Stock Reverse Stock Split
as such stockholder holds immediately prior to the Common Stock Reverse Stock Split. Further, assuming that the Series C Preferred Reverse
Stock Split is implemented by the Board at the same ratio as the Common Stock Reverse Stock Split, each holder of Common Stock will hold
the same percentage of our outstanding Common Stock and Series C Preferred Stock, in the aggregate, immediately following the Common Stock
Reverse Stock Split as such holder of Common Stock holds immediately prior to the Common Stock Reverse Stock Split. Even if Proposal #2
does not pass, the Board intends to implement the Common Stock Reverse Stock Split in order to achieve compliance with the Minimum Bid
Price Requirement.
The
text of the form of amendment to the Certificate of Incorporation, which would be filed with the Secretary of State of the State of Delaware
to effect the Common Stock Reverse Stock Split, is set forth in Appendix A to this Proxy Statement. The text of the
form of amendment accompanying this Proxy Statement is, however, subject to amendment to reflect the exact ratio for the Common Stock
Reverse Stock Split and any changes that may be required by the office of the Secretary of State of the State of Delaware or that the
Board may determine to be necessary or advisable ultimately to comply with applicable law and to effect the Common Stock Reverse Stock
Split.
Our
Board believes that approval of the amendment to the Certificate of Incorporation to effect the Common Stock Reverse Stock Split is in
the best interests of the Company and our stockholders and has unanimously recommended that the proposed amendment be presented to our
stockholders for approval.
Board
Discretion to Implement the Common Stock Reverse Stock Split
The
Common Stock Reverse Stock Split will be effected, if at all, only upon a determination by our Board that the Common Stock Reverse Stock
Split (with an exchange ratio determined by our Board as described above) is necessary to maintain the listing of our Common Stock on
the Nasdaq Capital Market and is also in the best interests of the Company and its stockholders. Such determination shall be based upon
certain factors, including, but not limited to, the historical trading price and trading volume of our Common Stock, the then prevailing
trading price and trading volume of our Common Stock and the anticipated impact of the Common Stock Reverse Stock Split on the trading
market for our Common Stock, our ability to have our shares of Common Stock remain listed on the Nasdaq Capital Market, the anticipated
impact of the Common Stock Reverse Stock Split on our ability to raise additional financing, and prevailing general market and economic
conditions. No further action on the part of stockholders would be required to either implement or not implement the Common Stock Reverse
Stock Split. If our stockholders approve the proposal, and the Board determines to effect the Common Stock Reverse Stock Split, we would
communicate to the public, prior to the Effective Date (as defined below), additional details regarding the Common Stock Reverse Stock
Split, including the specific ratio selected by the Board.
If the Board does not implement the Common
Stock Reverse Stock Split prior to the Company’s 2022 Annual Meeting of Stockholders, the authority granted in this proposal to
implement the Common Stock Reverse Stock Split will terminate. The Board is requesting authorization to implement the Common Stock Reverse
Stock Split up until such time in the event the Company needs to utilize this Proposal No. 1 in order to regain compliance with the minimum
bid price requirement of $1.00 per share for continued listing of our Common Stock on the Nasdaq Capital Market, as set forth in Nasdaq
Listing Rule 5550(a)(2) (the “Minimum Bid Price Requirement”) (described below under “Purpose of the Common Stock Reverse
Stock Split”). The Board would only want to implement the Common Stock Reverse Stock Split to regain compliance with the Minimum
Bid Price Requirement in order to remain listed on the Nasdaq Capital Market. As such, the Board reserves its right to elect not to proceed
with the Common Stock Reverse Stock Split if it determines, in its sole discretion, that this proposal is no longer in the Company’s
best interest. In the event that we regain compliance with the Minimum Bid Price Requirement without the need to effect the Common Stock
Reverse Stock Split, then the Board may not implement the Common Stock Reverse Stock Split unless it becomes necessary at some point later
in the future. The Board and the Company have committed to Nasdaq that it will implement a reverse stock split to ensure long-term compliance
with the Minimum Bid Price Requirement.
Effective
Date
If
the proposed amendment to the Certificate of Incorporation to give effect to the Common Stock Reverse Stock Split is approved at the
Special Meeting and the Board determines to effect the Common Stock Reverse Stock Split, subject to the conditions set out in this Proposal
No. 1, then the Common Stock Reverse Stock Split will become effective as of 5:30 p.m. Eastern Time on the effective date of the certificate
of amendment to our Certificate of Incorporation with the office of the Secretary of State of the State of Delaware, which we would expect
to be the date of filing (the “Effective Date”). Except as explained below with respect to fractional shares, each issued
share of Common Stock immediately prior to the Effective Date will automatically be changed, as of the Effective Date, into a fraction
of a share of Common Stock, based on the exchange ratio within the approved range determined by the Board.
Purpose
of the Reverse Stock Split
The sole purpose for the Common Stock Reverse
Stock Split is based on the Board’s belief that the Common Stock Reverse Stock Split will be necessary to maintain the listing of
our Common Stock on the Nasdaq Capital Market. In the event that the Board, in its sole discretion, determines to implement the Common
Stock Reverse Stock Split for such purpose, subject to the conditions set out in this Proposal No. 1, the Board believes that the Common
Stock Reverse Stock Split could also improve the marketability and liquidity of the Common Stock. Even if our Common Stock organically
increases in price to comply with the Minimum Bid Price Requirement, the Company has committed to Nasdaq to effect a reverse split to
ensure long-standing compliance with this Nasdaq requirement.
Maintain
our listing on the Nasdaq Capital Market. Our Common Stock is traded on the Nasdaq Capital Market. On May 24, 2019, the Company
received notice from Nasdaq that it no longer satisfied the Minimum Bid Price Requirement and had 180 calendar days from the date therein
to regain compliance. On November 21, 2019, the Company received a second notice from Nasdaq indicating that, while the Company had not
regained compliance with the Minimum Bid Price Requirement, Nasdaq had determined that the Company was eligible for an additional 180-day
period, or until May 18, 2020, to regain compliance. However, on April 17, 2020, the Company received notice from Nasdaq that the 180-day
grace period to regain compliance with the Minimum Bid Price Requirement under applicable Nasdaq rules was extended due to the global
market impact caused by COVID-19. More specifically, Nasdaq stated that the compliance periods for any company previously notified about
non-compliance would be suspended effective April 16, 2020, through June 30, 2020. On July 1, 2020, companies would receive the balance
of any pending compliance period exception to come back into compliance with the applicable Minimum Bid Price Requirement. As a result
of this extension, the Company had until August 3, 2020 to regain compliance with the Minimum Bid Price Requirement. Since the Company
did not satisfy the Minimum Bid Price Requirement by August 3, 2020, the Company received written notification (the “August 2020
Letter”) from Nasdaq that the Common Stock would be delisted, unless the Company requested a hearing to appeal Nasdaq’s determination.
On August 6, 2020, the Company requested a hearing before the Panel to appeal the August 2020 Letter, and, on August 7, 2020, Nasdaq
notified the Company that a hearing was scheduled for September 10, 2020. The Company provided the Panel with a plan to regain compliance
with the Minimum Bid Price Requirement while requesting additional time to effect compliance with the Minimum Bid Price Requirement either
organically or by securing authorization for the Common Stock Reverse Stock Split. On September 16, 2020, the Hearings Panel granted
our request to continue the listing of our Common Stock on the Nasdaq Capital Market, subject to certain conditions. In order for our
Common Stock to continue to be listed on the Nasdaq Capital Market, the decision of the Panel required that, on or before October 31,
2020, the Company shall have completed a reverse stock split and shall have demonstrated compliance with the Minimum Bid Price Requirement
by evidencing a closing bid price above $1.00 per share for the previous ten consecutive trading sessions. On October 9, 2020, the Company
submitted a request to the Panel to extend the deadline to regain compliance with the Minimum Bid Price Requirement to November 30, 2020,
which request was granted by the Panel on October 12, 2020. On November 30, 2020, the Company submitted a second request to the Panel
to extend the deadline to regain compliance with the Minimum Bid Price Requirement to February 1, 2021, which request was granted by
the Panel on December 7, 2020. At such time, the Company had until February 1, 2021 to demonstrate compliance with the Minimum Bid Price
Requirement by evidencing a closing bid price above $1.00 per share for the previous ten consecutive trading sessions.
On January 4, 2021, the Company received a letter
from Nasdaq, dated January 4, 2021, notifying the Company that it had, at that time, regained compliance with the Minimum Bid Price Requirement,
and that Nasdaq was imposing the Monitor Period on the Company pursuant to Nasdaq Listing Rule 5815(d)(4)(A), which would last until July
5, 2021. During the Monitor Period, (i) the Company was required to notify the Hearings Panel, in writing, in the event that the closing
bid price of the Common Stock fell below $1.00 on any trading day, and in the event the Company fell out of compliance with any other
applicable listing requirement, and (ii) if the closing bid price of the Common Stock remained under $1.00 for thirty (30) consecutive
trading days at any point during the Monitor Period, the Panel (or a newly convened Panel if the initial Panel was unavailable) was required
to provide written notice to the Company that it would promptly conduct a hearing with regards to such deficiency.
However,
on June 18, 2021, the Company received a determination letter (the “June 2021 Letter”) from Nasdaq stating that the Company
had failed to maintain compliance with the Minimum Bid Price Requirement. As of May 27, 2021, the closing bid price of the Common Stock
had not been at least $1.00 for thirty (30) consecutive trading days during the Monitor Period, resulting in the issuance of the June
2021 Letter to the Company, which provides that the Common Stock is subject to delisting from the Nasdaq Capital Market, but that the
Company will have an opportunity to appeal such delisting determination by requesting a hearing with the Panel. The Company subsequently
requested a hearing before the Panel to appeal the June 2021 Letter, which hearing has been set for July 29, 2021 (the “July Hearing”).
A proposal similar to this Proposal No. 1 was previously approved by
the Company’s stockholders at the Company’s 2019 Annual Meeting of Stockholders, which was originally held on December 17,
2019 and adjourned to January 17, 2020, which gave the Board authority to amend the Certificate of Incorporation to effect a reverse stock
split of all of our outstanding shares of Common Stock, by a ratio in the range of one-for-three to one-for-fifteen, until May 18, 2020,
which was the original date by which Nasdaq had advised the Company it needed to achieve compliance with the Minimum Bid Price Requirement
at that time (the “2019 Approved Reverse Stock Split”). Despite Nasdaq’s unforeseen action that provided an extension
for all exchange listed companies that were not in compliance with this requirement, which effectively extended the Company’s 180-day
grace period to August 3, 2020 to regain compliance with the Minimum Bid Price Requirement, the Board’s authority expired on May
18, 2020 to authorize the 2019 Approved Reverse Stock Split. The volatility that the stock market experienced during the height of the
COVID-19 pandemic, including the weeks and months leading up to May 18, 2020, resulted in the determination that it was not in the best
interests of the Company and its stockholders to effect the 2019 Approved Reverse Stock Split at that time. The Company’s stockholders
did not approve a similar amendment to the Certificate of Incorporation in connection with the Company’s 2020 Annual Meeting of
Stockholders. On January 5, 2021, the Company cancelled a special meeting of its stockholders that was scheduled to be held on January
15, 2021 in connection with such similar amendment, as Nasdaq had confirmed that the Company had, at that time, regained compliance with
the Minimum Bid Price Requirement, subject to the Company complying with the Monitor Period, and the Company no longer required authorization
to effect a reverse stock split of the outstanding shares of Common Stock at such special meeting. Due to the Company’s subsequent
non-compliance with the Minimum Bid Price Requirement and its related receipt of the June 2021 Letter from Nasdaq, the Company currently
believes that it is in the best interests of the Company and its stockholders to provide the Board until the 2022 Annual Meeting to authorize
the Common Stock Reverse Stock Split and that such period will be a sufficient amount of time for the Board to select the ratio that will
enable the Company to achieve and maintain compliance with the Minimum Bid Price Requirement; however, the Board does intend to implement
the Reverse Stock Split upon Stockholder approval of this proposal in order to demonstrate to Nasdaq its intention promptly to comply
with the Minimum Bid Price Requirement.
The Company will be required to comply with any
further conditions that may be established by the Panel at the July Hearing in order to regain compliance with the Minimum Bid Price Requirement,
otherwise our Common Stock will be delisted by Nasdaq. As of the date of this Proxy Statement, the price of the Common Stock has not had
a minimum bid price of at least $1.00 since June 16, 2021.
The Board has considered the potential harm to
the Company and its stockholders should Nasdaq delist our Common Stock from the Nasdaq Capital Market. Delisting our Common Stock could
adversely affect the liquidity of our Common Stock because alternatives, such as the OTC Bulletin Board, OTC Markets, and the Pink Sheets,
are generally considered to be less efficient markets. An investor likely would find it less convenient to sell, or to obtain accurate
quotations in seeking to buy our Common Stock on an over-the-counter market. Many investors likely would not buy or sell our Common Stock
due to difficulty in accessing over-the-counter markets, policies preventing them from trading in securities not listed on a national
exchange or other reasons. The Board believes that the Common Stock Reverse Stock Split is the only effective means for us to maintain
compliance with the rules of Nasdaq and to avoid, or at least mitigate, the likely adverse consequences of our Common Stock being delisted
from the Nasdaq Capital Market by producing the immediate effect of increasing the bid price of our Common Stock. In addition, the Company
has committed to Nasdaq to effect the Reverse Stock Split in order to ensure long-term, continued compliance with the Minimum Bid Price
Requirement.
Improve
the marketability and liquidity of the Common Stock. In the event the Board elects to implement the Common Stock Reverse Stock
Split in order to avoid the delisting of our Common Stock from the Nasdaq Capital Market, we also believe that the increased market price
of our Common Stock expected as a result of implementing the Common Stock Reverse Stock Split will improve the marketability and liquidity
of our Common Stock and will encourage interest and trading in our Common Stock. The Common Stock Reverse Stock Split could allow a broader
range of institutions to invest in our Common Stock (namely, funds that are prohibited from buying stocks whose price is below a certain
threshold), potentially increasing the liquidity of our Common Stock. The Common Stock Reverse Stock Split could also help increase analyst
and broker interest in our stock as their policies can discourage them from following or recommending companies with low stock prices.
Because of the trading volatility often associated with low-priced stocks, many brokerage houses and institutional investors have internal
policies and practices that either prohibit them from investing in low-priced stocks or tend to discourage individual brokers from recommending
low-priced stocks to their customers. Some of those policies and practices may function to make the processing of trades in low-priced
stocks economically unattractive to brokers. Additionally, because brokers’ commissions on low-priced stocks generally represent
a higher percentage of the stock price than commissions on higher-priced stocks, the current average price per share of our Common Stock
can result in individual stockholders paying transaction costs representing a higher percentage of their total share value than would
be the case if the share price were substantially higher. It should be noted, however, that the liquidity of our Common Stock may in
fact be adversely affected by the proposed Common Stock Reverse Stock Split given the reduced number of shares of Common Stock that would
be outstanding after the Common Stock Reverse Stock Split.
For the above reasons, we believe that providing
the Board with the ability to effect the Common Stock Reverse Stock Split, in the event that it determines, in its sole discretion, that
implementing the Common Stock Reverse Stock Split will help us regain and maintain compliance with the Nasdaq listing requirements and,
as a result, could also improve the marketability and liquidity of our Common Stock, is in the best interests of the Company and our stockholders.
However, regardless as to whether or not the Board believes that implementing the Common Stock Reverse Stock Split could help us regain
and maintain compliance with the Nasdaq listing requirements, the Board reserves the right not to implement the Common Stock Reverse Stock
Split if it determines, in its sole discretion, that it otherwise would not be in our and our stockholders’ best interests; however,
it is highly unlikely that the Board will not implement the Common Stock Reverse Stock Split given the need to demonstrate conclusively
to Nasdaq of the Company’s ability to maintain long-term compliance with the Minimum Bid Price Requirement.
Risks
of the Common Stock Reverse Stock Split
We
cannot assure you that the proposed Common Stock Reverse Stock Split will increase our stock price and have the desired effect of maintaining
compliance with the rules of Nasdaq. The Board expects that the Common Stock Reverse Stock Split of our Common Stock will increase
the market price of our Common Stock so that we are able to regain and maintain compliance with the Minimum Bid Price Requirement. However,
the effect of the Common Stock Reverse Stock Split upon the market price of our Common Stock cannot be predicted with any certainty,
and the history of similar reverse stock splits for companies in like circumstances is varied.
It
is possible that the per share price of our Common Stock after the Common Stock Reverse Stock Split will not rise in proportion to the
reduction in the number of shares of our Common Stock outstanding resulting from the Common Stock Reverse Stock Split, and the market
price per post-Common Stock Reverse Stock Split share may not exceed or remain in excess of the $1.00 minimum bid price for a sustained
period of time, and the Common Stock Reverse Stock Split may not result in a per share price that would attract brokers and investors
who do not trade in lower priced stocks. Even if we effect the Common Stock Reverse Stock Split, the market price of our Common Stock
may decrease due to factors unrelated to the Common Stock Reverse Stock Split. In any case, the market price of our Common Stock may
also be based on other factors which may be unrelated to the number of shares outstanding, including our future performance. If the Common
Stock Reverse Stock Split is consummated and the trading price of the Common Stock declines, the percentage decline as an absolute number
and as a percentage of our overall market capitalization may be greater than would occur in the absence of the Common Stock Reverse Stock
Split. Even if the market price per post-Common Stock Reverse Stock Split share of our Common Stock remains in excess of $1.00 per share,
we may be delisted due to a failure to meet other continued listing requirements, including Nasdaq requirements related to the minimum
stockholders’ equity, the minimum number of shares that must be in the public float, the minimum market value of the public float
and the minimum number of round lot holders.
The
Common Stock Reverse Stock Split may decrease the liquidity of our Common Stock. The liquidity of our Common Stock may be harmed
by the Common Stock Reverse Stock Split given the reduced number of shares of Common Stock that would be outstanding after the Common
Stock Reverse Stock Split, particularly if the stock price does not increase as a result of the Common Stock Reverse Stock Split. In
addition, investors might consider the increased proportion of unissued authorized shares of Common Stock to issued shares to have an
anti-takeover effect under certain circumstances, because the proportion allows for dilutive issuances which could prevent certain stockholders
from changing the composition of the Board or render tender offers for a combination with another entity more difficult to successfully
complete. The Board does not intend for the Common Stock Reverse Stock Split to have any anti-takeover effects.
Principal
Effects of the Common Stock Reverse Stock Split
Common
Stock. If this proposal is approved by the stockholders at the Special Meeting and the Board determines to effect the Common
Stock Reverse Stock Split, subject to the conditions set out in this Proposal No. 1, and thus amend the Certificate of Incorporation,
the Company will file a certificate of amendment to the Certificate of Incorporation with the Secretary of State of the State of Delaware.
Except for adjustments that may result from the treatment of fractional shares as described below, each issued share of Common Stock
immediately prior to the Effective Date will automatically be changed, as of the Effective Date, into a fraction of a share of Common
Stock based on the exchange ratio within the approved range determined by the Board. In addition, proportional adjustments will be made
to the maximum number of shares of Common Stock issuable under, and other terms of, (i) our stock plans, and (ii) the number of shares
of Common Stock issuable under, and the exercise price of, our outstanding options and warrants.
Except
for adjustments that may result from the treatment of fractional shares of Common Stock as described below, because the Common Stock
Reverse Stock Split would apply to all issued shares of our Common Stock, and assuming Proposal No. 2 is approved by the Company’s
stockholders and the Board implements the Series C Preferred Reverse Stock Split at the same ratio that the Board sets for the Common
Stock Reverse Stock Split, as described in Proposal No. 2, the Common Stock Reverse Stock Split would not alter the relative rights and
preferences of our existing stockholders nor affect any stockholder’s proportionate equity interest in the Company. For example,
a holder of two percent (2%) of the voting power of the outstanding shares of our Common Stock and Series C Preferred Stock, in the aggregate,
immediately prior to the effectiveness of the Common Stock Reverse Stock Split will generally continue to hold two percent (2%) of the
voting power of the outstanding shares of our Common Stock and Series C Preferred Stock, in the aggregate, immediately after the Common
Stock Reverse Stock Split. Moreover, the number of stockholders of record of the Company’s Common Stock and Series C Preferred
Stock will not be affected by the Common Stock Reverse Stock Split. The amendment to the Certificate of Incorporation itself would not
change the number of authorized shares of our Common Stock. The Common Stock Reverse Stock Split will have the effect of creating additional
unreserved shares of our authorized Common Stock. Although at present we have no current arrangements or understandings providing for
the issuance of the additional shares of Common Stock that would be made available for issuance upon effectiveness of the Common Stock
Reverse Stock Split, other than those shares needed to satisfy the exercise of the Company’s outstanding warrants and options,
these additional shares of Common Stock may be used by us for various purposes in the future without further stockholder approval, including,
among other things:
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raising
capital to fund our operations and to continue as a going concern;
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establishing
strategic relationships with other companies;
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providing
equity incentives to our employees, officers or directors; and
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expanding
our business or product lines through the acquisition of other businesses or products.
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While
the Common Stock Reverse Stock Split will make additional shares of Common Stock available for the Company to use in connection with
the foregoing, the sole purpose of the Common Stock Reverse Stock Split is to increase our stock price in order to regain and maintain
compliance with the Minimum Bid Price Requirement, which compliance will be the sole factor in determining the ratio of the Common Stock
Reverse Stock Split.
Effect
on Employee Plans, Options, Restricted Stock Awards and Convertible or Exchangeable Securities. Pursuant to the terms of the
2013 Long Term Incentive Plan and the 2017 Stock Incentive Plan (collectively, the “Plans”), the Board or a committee thereof,
as applicable, will adjust the number of shares of Common Stock available for future grant under the Plans, the number of shares of Common
Stock underlying outstanding awards, the exercise price per share of outstanding stock options, and other terms of outstanding awards
issued pursuant to the Plans to equitably reflect the effects of the Common Stock Reverse Stock Split. Based upon the Common Stock Reverse
Stock Split ratio determined by the Board, proportionate adjustments are also generally required to be made to the per share exercise
or conversion prices, as applicable, and the number of shares of Common Stock issuable upon the exercise or conversion, as applicable,
of outstanding options and warrants, and any other convertible or exchangeable securities that may entitle the holders thereof to purchase,
exchange for, or convert into, shares of Common Stock. This would result in approximately the same aggregate price being required to
be paid under such options, warrants and other then outstanding convertible or exchangeable securities upon exercise or conversion, as
applicable, and approximately the same value of shares of Common Stock being delivered upon such exercise, exchange or conversion, immediately
following the Common Stock Reverse Stock Split as was the case immediately preceding the Common Stock Reverse Stock Split. The number
of shares of Common Stock subject to restricted stock awards and restricted stock units will be similarly adjusted, subject to our treatment
of fractional shares of Common Stock. The number of shares of Common Stock reserved for issuance pursuant to these securities and our
Plans will be adjusted proportionately based upon the Common Stock Reverse Stock Split ratio determined by the Board, subject to our
treatment of fractional shares of Common Stock.
Listing. Our shares of Common Stock
currently trade on the Nasdaq Capital Market. The Common Stock Reverse Stock Split will directly affect the listing of our Common Stock
on the Nasdaq Capital Market, and we believe that the Common Stock Reverse Stock Split could potentially increase our stock price, facilitating
compliance with the Minimum Bid Price Requirement. Following the Common Stock Reverse Stock Split, we intend for our Common Stock to continue
to be listed on the Nasdaq Capital Market under the symbol “NXTD”, subject to our ability to continue to comply with Nasdaq
rules, although our Common Stock would have a new committee on uniform securities identification procedures (“CUSIP”) number,
a number used to identify our Common Stock.
“Public
Company” Status. Our Common Stock is currently registered under Section 12(b) and 12(g) of the Securities Exchange Act
of 1934, as amended (the “Exchange Act”), and we are subject to the “public company” periodic reporting and other
requirements of the Exchange Act. The proposed Common Stock Reverse Stock Split will not affect our status as a public company or this
registration under the Exchange Act. The Common Stock Reverse Stock Split is not intended as, and will not have the effect of, a “going
private transaction” covered by Rule 13e-3 under the Exchange Act.
Odd
Lot Transactions. It is likely that some of our stockholders will own “odd-lots” of less than 100 shares of Common
Stock following the Common Stock Reverse Stock Split. A purchase or sale of less than 100 shares of Common Stock (an “odd lot”
transaction) may result in incrementally higher trading costs through certain brokers, particularly “full service” brokers,
and generally may be more difficult than a “round lot” sale. Therefore, those stockholders who own less than 100 shares of
Common Stock following the Common Stock Reverse Stock Split may be required to pay somewhat higher transaction costs and may experience
some difficulties or delays should they then determine to sell their shares of Common Stock.
Authorized
but Unissued Shares; Potential Anti-Takeover Effects. Our Certificate of Incorporation presently authorizes 100,000,000 shares
of Common Stock and 10,000,000 shares of blank check preferred stock, par value $0.0001 per share. The Common Stock Reverse Stock Split
would not change the number of authorized shares of the Common Stock, although the Common Stock Reverse Stock Split would decrease the
number of issued and outstanding shares of Common Stock. Therefore, because the number of issued and outstanding shares of Common Stock
would decrease, the number of shares of Common Stock remaining available for issuance by us in the future would increase.
Such
additional shares of Common Stock would be available for issuance from time to time for corporate purposes such as issuances of Common
Stock in connection with capital-raising transactions and acquisitions of companies or other assets, as well as for issuance upon conversion
or exercise of securities such as convertible preferred stock, convertible debt, warrants or options convertible into or exercisable
for Common Stock. We believe that the availability of the additional shares of Common Stock will provide us with the flexibility to meet
business needs as they arise, to take advantage of favorable opportunities and to respond effectively in a changing corporate environment.
For example, we may elect to issue shares of Common Stock to raise equity capital, to make acquisitions through the use of stock, to
establish strategic relationships with other companies, to adopt additional employee benefit plans or reserve additional shares of Common
Stock for issuance under such plans, where the Board determines it advisable to do so, without the necessity of soliciting further stockholder
approval, subject to applicable stockholder vote requirements under Delaware law and Nasdaq rules. If we issue additional shares of Common
Stock for any of these purposes, the aggregate ownership interest of our current stockholders, and the interest of each such existing
stockholder, would be diluted, possibly substantially.
The
additional shares of our Common Stock that would become available for issuance upon an effective Common Stock Reverse Stock Split could
also be used by us to oppose a hostile takeover attempt or delay or prevent a change of control or changes in or removal of our management,
including any transaction that may be favored by a majority of our stockholders or in which our stockholders might otherwise receive
a premium for their shares of Common Stock over then-current market prices or benefit in some other manner. Although the increased proportion
of authorized but unissued shares of Common Stock to issued shares of Common Stock could, under certain circumstances, have an anti-takeover
effect, the Common Stock Reverse Stock Split is not being proposed in order to respond to a hostile takeover attempt or to an attempt
to obtain control of the Company.
Fractional
Shares
We
will not issue fractional certificates for post-Common Stock Reverse Stock Split shares of Common Stock in connection with the Common
Stock Reverse Stock Split. To the extent any holders of pre-Common Stock Reverse Stock Split shares of Common Stock are entitled to fractional
shares of Common Stock as a result of the Common Stock Reverse Stock Split, the Company will issue an additional share to all holders
of fractional shares of Common Stock.
No
Dissenters’ Rights
Under
Delaware law, our stockholders would not be entitled to dissenters’ rights or rights of appraisal in connection with the implementation
of the Common Stock Reverse Stock Split, and we will not independently provide our stockholders with any such rights.
Certain
United States Federal Income Tax Consequences
The
following is a summary of certain United States federal income tax consequences of the Common Stock Reverse Stock Split. It does not
address any state, local or foreign income or other tax consequences, which, depending upon the jurisdiction and the status of the stockholder/taxpayer,
may vary from the United States federal income tax consequences. It applies to you only if you held pre-Common Stock Reverse Stock Split
shares of Common Stock as capital assets for United States federal income tax purposes. This discussion does not apply to you if you
are a member of a class of our stockholders subject to special rules, such as (a) a dealer in securities or currencies, (b) a trader
in securities that elects to use a mark-to-market method of accounting for your securities holdings, (c) a bank, (d) a life insurance
company, (e) a tax-exempt organization, (f) a person that owns shares of Common Stock that are a hedge, or that are hedged, against interest
rate risks, (g) a person who owns shares of Common Stock as part of a straddle or conversion transaction for tax purposes or (h) a person
whose functional currency for tax purposes is not the U.S. dollar. The discussion is based on the Internal Revenue Code of 1986, as amended
(the “Internal Revenue Code”), its legislative history, existing, temporary and proposed regulations under the Internal Revenue
Code, published rulings and court decisions, all as of the date hereof. These laws, regulations and other guidance are subject to change,
possibly on a retroactive basis. We have not sought and will not seek an opinion of counsel or a ruling from the Internal Revenue Service
regarding the United States federal income tax consequences of the Common Stock Reverse Stock Split.
PLEASE
CONSULT YOUR OWN TAX ADVISOR CONCERNING THE CONSEQUENCES OF THE COMMON STOCK REVERSE STOCK SPLIT IN YOUR PARTICULAR CIRCUMSTANCES UNDER
THE INTERNAL REVENUE CODE AND THE LAWS OF ANY OTHER TAXING JURISDICTION.
Tax
Consequences to United States Holders of Common Stock. A United States holder, as used herein, is a stockholder who or that
is, for United States federal income tax purposes: (a) a citizen or individual resident of the United States, (b) a domestic corporation,
(c) an estate whose income is subject to United States federal income tax regardless of its source, or (d) a trust, if a United States
court can exercise primary supervision over the trust’s administration and one or more United States persons are authorized to
control all substantial decisions of the trust. This discussion applies only to United States holders.
Except
for adjustments that may result from the treatment of fractional shares of Common Stock as described above, no gain or loss should be
recognized by a stockholder upon such stockholder’s exchange of pre-Common Stock Reverse Stock Split shares of Common Stock for
post-Common Stock Reverse Stock Split shares of Common Stock pursuant to the Common Stock Reverse Stock Split, and the aggregate adjusted
basis of the post-Common Stock Reverse Stock Split shares of Common Stock received will be the same as the aggregate adjusted basis of
the Common Stock exchanged for such new shares. The stockholder’s holding period for the post-Common Stock Reverse Stock Split
shares of Common Stock will include the period during which the stockholder held the pre-Common Stock Reverse Stock Split shares of Common
Stock surrendered.
Accounting
Consequences
Following
the Effective Date of the Common Stock Reverse Stock Split, if any, the net income or loss and net book value per share of Common Stock
will be increased because there will be fewer shares of the Common Stock outstanding. We do not anticipate that any other accounting
consequences would arise as a result of the Common Stock Reverse Stock Split.
Exchange
of Stock Certificates
As
of the Effective Date, each certificate representing shares of our Common Stock outstanding before the Common Stock Reverse Stock Split
will be deemed, for all corporate purposes, to evidence ownership of the reduced number of shares of our Common Stock resulting from
the Common Stock Reverse Stock Split. All shares of Common Stock underlying options, warrants and other securities exchangeable or exercisable
for or convertible into Common Stock also automatically will be adjusted on the Effective Date.
Our
transfer agent, VStock Transfer, LLC, will act as the exchange agent for purposes of exchanging stock certificates subsequent to the
Common Stock Reverse Stock Split. Shortly after the Effective Date, stockholders of record will receive written instructions requesting
them to complete and return a letter of transmittal and surrender their old stock certificates for new stock certificates reflecting
the adjusted number of shares as a result of the Common Stock Reverse Stock Split. Certificates representing shares of Common Stock issued
in connection with the Common Stock Reverse Stock Split will continue to bear the same restrictive legends, if any, that were borne by
the surrendered certificates representing the shares of Common Stock outstanding prior to the Common Stock Reverse Stock Split. No new
certificates will be issued until such stockholder has surrendered any outstanding certificates, together with the properly completed
and executed letter of transmittal, to the exchange agent. Until surrendered, each certificate representing shares of Common Stock outstanding
before the Common Stock Reverse Stock Split would continue to be valid and would represent the adjusted number of shares of Common Stock,
based on the ratio of the Common Stock Reverse Stock Split.
Any
stockholder whose stock certificates are lost, destroyed or stolen will be entitled to a new certificate or certificates representing
post-Common Stock Reverse Stock Split shares of Common Stock upon compliance with the requirements that we and our transfer agent customarily
apply in connection with lost, destroyed or stolen certificates. Instructions as to lost, destroyed or stolen certificates will be included
in the letter of instructions from the exchange agent.
Upon
the Common Stock Reverse Stock Split, we intend to treat stockholders holding our Common Stock in “street name,” through
a bank, broker or other nominee, in the same manner as registered stockholders whose shares of Common Stock are registered in their names.
Banks, brokers and other nominees will be instructed to effect the Common Stock Reverse Stock Split for their beneficial holders holding
our Common Stock in “street name”. However, such banks, brokers and other nominees may have different procedures than registered
stockholders for processing the Common Stock Reverse Stock Split. If you hold your shares in “street name” with a bank, broker
or other nominee, and if you have any questions in this regard, we encourage you to contact your bank, broker or nominee.
YOU
SHOULD NOT DESTROY YOUR STOCK CERTIFICATES AND YOU SHOULD NOT SEND THEM NOW. YOU SHOULD SEND YOUR STOCK CERTIFICATES ONLY AFTER YOU HAVE
RECEIVED INSTRUCTIONS FROM THE EXCHANGE AGENT AND IN ACCORDANCE WITH THOSE INSTRUCTIONS.
If any certificates for shares of Common Stock
are to be issued in a name other than that in which the certificates for shares of Common Stock surrendered are registered, the stockholder
requesting the reissuance will be required to pay to us any transfer taxes or establish to our satisfaction that such taxes have been
paid or are not payable and, in addition, (a) the transfer must comply with all applicable federal and state securities laws, and (b)
the surrendered certificate must be properly endorsed and otherwise be in proper form for transfer.
Book-Entry
The Company’s registered stockholders may
hold some or all of their shares of Common Stock electronically in book-entry form with our transfer agent. These stockholders do not
have stock certificates evidencing their ownership of Common Stock. They are, however, provided with a statement reflecting the number
of shares of Common Stock registered in their accounts.
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If you hold registered
shares of Common Stock in book-entry form, you do not need to take any action to receive your post-Common Stock Reverse Stock Split
shares of Common Stock in registered book-entry form.
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If you are entitled to
post-Common Stock Reverse Stock Split shares of Common Stock, a transaction statement will automatically be sent to your address
of record by our transfer agent as soon as practicable after the Effective Date indicating the number of shares of Common Stock that
you hold.
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Interests of Directors and Executive Officers
Our directors and executive officers have no
substantial interests, directly or indirectly, in the matters set forth in this proposal except to the extent of their ownership of shares
of our Common Stock and equity awards granted to them under our equity incentive plans.
Vote Required and Recommendation
Our Bylaws provide that, on all matters (other
than the election of directors and except to the extent otherwise required by our Certificate of Incorporation or applicable Delaware
law), the affirmative vote of a majority of the shares outstanding and entitled to vote on the matter will be required for approval.
Accordingly, the affirmative vote of a majority of the shares of Common Stock and Series C Preferred Stock, in the aggregate, outstanding
on the Record Date and entitled to vote on the matter will be required to approve the Common Stock Reverse Stock Split.
At the Special Meeting, a vote will be taken
on a proposal to amend the Certificate of Incorporation to effect the Common Stock Reverse Stock Split at the discretion of the Board.
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR”
THE APPROVAL OF
PROPOSAL NO. 1.
PROPOSAL TO AUTHORIZE THE
BOARD TO AMEND THE
CERTIFICATE OF INCORPORATION BY AMENDING THE
SERIES C PREFERRED CERTIFICATE OF DESIGNATIONS TO
(i) EFFECT A REVERSE STOCK SPLIT OF ALL
OUTSTANDING SHARES OF SERIES C PREFERRED STOCK
BY THE SAME RATIO THAT THE BOARD SELECTS FOR THE COMMON STOCK REVERSE STOCK SPLIT AND (ii) INCREASE THE STATED VALUE OF THE SERIES C
PREFERRED STOCK BY THE SAME AMOUNT AS THE RATIO OF THE SERIES C PREFERRED REVERSE STOCK SPLIT
(Proposal No. 2)
Summary
Our Board has unanimously approved a proposal
to amend the Certificate of Incorporation by amending the Series C Preferred Certificate of Designations to effect the Series C Preferred
Reverse Stock Split by the same ratio that the Board selects for the Common Stock Reverse Stock Split. The proposal provides that our
Board shall be required, pursuant to Section 242(b) of the DGCL, to effect the Series C Preferred Reverse Stock Split, if it determines
to implement the Common Stock Reverse Stock Split described in Proposal No. 1, solely for the purpose of maintaining the proportionate
relationship of the Series C Preferred Stock to the Common Stock, at the same time the Board effects the Common Stock Reverse Stock Split,
and in any event, before the Company’s 2022 Annual Meeting of Stockholders. The proposal also provides that the Board’s authority
to effect the Series C Preferred Reverse Stock Split is conditioned on the Board’s implementing the Common Stock Reverse Stock
Split at the same ratio as implemented with respect to the Series C Preferred Reverse Stock Split. Therefore, if Proposal No. 1 is not
approved, or, even if approved, if the Board does not otherwise elect to implement the Common Stock Reverse Stock Split at the same ratio
as the Series C Preferred Reverse Stock Split, then the Board shall not have authority to effect the Series C Preferred Reverse Stock
Split pursuant to this Proposal No. 2.
Should the Board proceed with the Series C Preferred
Reverse Stock Split, the same ratio that is set for the Common Stock Reverse Stock Split shall be set for the Series C Preferred Reverse
Stock Split, so that the proportionate relationship of the Series C Preferred Stock to the Common Stock remains the same, and so that
neither the ratio set for the Common Stock Reverse Stock Split, nor the ratio set for the Series C Preferred Reverse Stock Split, adversely
affects the rights, preferences or privileges of the Series C Preferred Stock.
If our Board determines, in its sole discretion,
that effecting the Series C Preferred Reverse Stock Split is necessary to maintain the proportionate relationship of the Series C Preferred
Stock to the Common Stock and it is also in the best interests of the Company and our stockholders, then the Series C Preferred Stock
Reverse Stock Split will become effective upon filing of an amendment to our Series C Preferred Certificate of Designations with the
Secretary of State of the State of Delaware. The amendment filed thereby will set forth the number of shares of Series C Preferred Stock
to be combined into one share of our Series C Preferred Stock, within the limits set forth in this proposal. Except for adjustments that
may result from the treatment of fractional shares as described below, each holder of Series C Preferred Stock will hold (i) the same
percentage of our outstanding Series C Preferred Stock and (ii) assuming the implementation of the Common Stock Reverse Stock Split,
the same percentage of our outstanding Common Stock and Series C Preferred Stock, in the aggregate, immediately following the Series
C Preferred Reverse Stock Split as such stockholder holds immediately prior to the Series C Preferred Stock Reverse Stock Split.
Additionally, our Board has unanimously approved
a corresponding amendment to our Series C Preferred Certificate of Designations to increase the stated value of the Series C Preferred
Stock by the same amount as the ratio of the Series C Preferred Reverse Stock Split so that the rights and preferences of the Series
C Preferred Stock including, without limitation, the amount payable to the holders of shares of Series C Preferred Stock upon a redemption
of the Series C Preferred Stock by the Company would not be affected by the Series C Preferred Reverse Stock Split. Any amendment increasing
the stated value of the Series C Preferred Stock is solely conditioned on the implementation of the Series C Preferred Reverse Stock
Split. In the event that the Series C Preferred Reverse Stock Split is not implemented by the Board, the amendment to our Series C Preferred
Certificate of Designations increasing the stated value of the Series C Preferred Stock will not be implemented.
The text of the form of amendment to the Series
C Preferred Certificate of Designations, which would be filed with the Secretary of State of the State of Delaware to effect (i) the
Series C Preferred Reverse Stock Split and (ii) the increase in stated value of the Series C Preferred Stock, is set forth in Appendix
B to this Proxy Statement. The text of the form of amendment accompanying this Proxy Statement is, however, subject to amendment
to reflect the exact ratio for the Series C Preferred Reverse Stock Split and any changes that may be required by the office of the Secretary
of State of the State of Delaware or that the Board may determine to be necessary or advisable ultimately to comply with applicable law
and to effect the Series C Preferred Reverse Stock Split.
Our Board believes that approval of the amendments
to the Series C Preferred Certificate of Designations to (i) effect the Series C Preferred Reverse Stock Split and (ii) increase the
stated value of the Series C Preferred Stock is in the best interests of the Company and our stockholders and has unanimously recommended
that the proposed amendment be presented to our stockholders for approval.
Implementation of the Series C Preferred Reverse
Stock Split
The Series C Preferred Reverse Stock Split
will be effected, if at all, only upon a determination by our Board to implement the Common Stock Reverse Stock Split, in which case
the Board will also implement the Series C Preferred Reverse Stock Split (at the same ratio determined by our Board for the Common Stock
Reverse Stock Split as described above) in order to maintain the proportionate relationship of the Series C Preferred Stock to the Common
Stock. No further action on the part of stockholders would be required to implement the Series C Preferred Reverse Stock Split. If our
stockholders approve the proposal, and the Board effects the Series C Preferred Reverse Stock Split, we would communicate to the public,
prior to the Effective Date, additional details regarding the Series C Preferred Reverse Stock Split, including the specific ratio selected
by the Board. Notwithstanding the foregoing, the Board’s authority to effect the Series C Preferred Reverse Stock Split is conditioned
on the Board’s also implementing the Common Stock Reverse Stock Split at the same ratio as implemented with respect to the Series
C Preferred Reverse Stock Split. Therefore, if Proposal No. 1 is not approved, or, even if approved, if the Board does not otherwise
elect to implement the Common Stock Reverse Stock Split at the same ratio as the Series C Preferred Reverse Stock Split, then the Board
shall not have authority to effect the Series C Preferred Reverse Stock Split pursuant to this Proposal No. 2.
If the Board does not implement the Series
C Preferred Reverse Stock Split prior to the Company’s 2022 Annual Meeting of Stockholders, the authority granted in this proposal
to implement the Series C Preferred Reverse Stock Split will terminate. The Board is requesting authorization to implement the Series
C Preferred Reverse Stock Split up until such time in the event the Company needs to utilize this Proposal No. 2 in order to maintain
the proportionate relationship of the Series C Preferred Stock to the Common Stock.
Increase in the Stated Value of the Series
C Preferred Stock
The amendment to our Series C Certificate
of Designations will be effected, if at all, only upon the implementation of the Series C Preferred Reverse Stock Split so that the rights
and preferences of the Series C Preferred Stock including, without limitation, the amount payable to the holders of shares of Series
C Preferred Stock upon a redemption of the Series C Preferred Stock by the Company, would not be affected by the Series C Preferred Reverse
Stock Split.
Effective Date
If the proposed amendment to the Certificate
of Incorporation by amending the Series C Preferred Certificate of Designations to (i) give effect to the Series C Preferred Stock Reverse
Stock Split and (ii) increase the stated value of the Series C Preferred Stock is approved at the Special Meeting, and the Board effects
the Series C Preferred Reverse Stock Split as a result of its determination to implement the Common Stock Reverse Stock Split, the Company
will file the amendment to the Series C Preferred Certificate of Designations with the office of the Secretary of State of Delaware on
the Effective Date and it will become effective as of 5:30 p.m. Eastern Time on the Effective Date. Except as explained below with respect
to fractional shares, each issued share of Series C Preferred Stock immediately prior to the Effective Date will automatically be changed,
as of the Effective Date, into a fraction of a share of Series C Preferred Stock, based on the exchange ratio within the approved range
determined by the Board.
Purpose of the Series C Preferred Reverse
Stock Split
The sole purpose for the Series C Preferred Reverse
Stock Split is based on the Board’s belief that the Series C Preferred Reverse Stock Split will be necessary to maintain the proportionate
relationship of the Series C Preferred Stock to the Common Stock.
Principal Effects of the Series C Preferred
Reverse Stock Split and Increase in the Stated Value of the Series C Preferred Stock
Series C Preferred Stock. If this
proposal is approved by the stockholders at the Special Meeting and the Board effects the Series C Preferred Reverse Stock Split, as
a result of its determination to implement the Common Stock Reverse Stock Split, and thus amend the Certificate of Incorporation by amending
the Series C Preferred Certificate of Designations, the Company will file a certificate of amendment to the Series C Preferred Certificate
of Designations with the Secretary of State of the State of Delaware.
There is only one holder of our Series C Preferred
Stock. Because the Series C Preferred Reverse Stock Split would be applied proportionately to the outstanding shares of Series C Preferred
Stock as the application of the Common Stock Reverse Stock Split would be applied to the outstanding shares of Common Stock, the proposed
Series C Preferred Reverse Stock Split would not alter the Series C Preferred stockholder’s percentage ownership of the outstanding
shares of Series C Preferred Stock or the outstanding shares of Common Stock and Series C Preferred Stock, in the aggregate. Such holder
will continue to hold one hundred percent (100%) of the voting power of the outstanding shares of our Series C Preferred Stock immediately
after the Series C Preferred Reverse Stock Split. Such holder will also continue to hold the same percentage of the voting power of the
outstanding shares of our Common Stock and Series C Preferred Stock, in the aggregate, after the Series C Preferred Reverse Stock Split.
One (1) share of Series C Preferred Stock shall continue to carry the same voting rights as one (1) share of Common Stock. The amendment
to the Series C Preferred Certificate of Designations would not change the number of authorized shares of our blank check preferred stock,
par value $0.0001 per share, nor will it change the number of designated shares of Series C Preferred Stock. The Series C Preferred Reverse
Stock Split will have the effect of creating unreserved designated shares of Series C Preferred Stock. We have no current arrangements
or understandings providing for the issuance of the additional shares of Series C Preferred Stock that would be made available for issuance
upon effectiveness of the Series C Preferred Reverse Stock Split; provided, however, if we plan to issue any additional
shares of Series C Preferred Stock, pursuant to the provisions of the Series C Preferred Certificate of Designations, we would be required
to obtain the approval of the holder of Series C Preferred Stock to do so.
Effect on Employee Plans, Options, Restricted
Stock Awards and Convertible or Exchangeable Securities. We do not have any employee plans which provide for the issuance of
our Series C Preferred Stock.
Listing. Our Series C Preferred Stock
is not listed and does not trade on any stock or securities exchange.
Authorized but Unissued Shares; Potential
Anti-Takeover Effects. Our Certificate of Incorporation presently authorizes 10,000,000 shares of blank check preferred stock,
par value $0.0001 per share, 2,000 shares of which are designated as Series C Preferred Stock. The Series C Preferred Reverse Stock Split
would not change the number of authorized shares of the Company’s blank check preferred stock as designated. Therefore, because
the number of issued and outstanding shares of Series C Preferred Stock would decrease, the number of shares of Series C Preferred Stock
remaining available for issuance by us in the future would increase. We have no current arrangements or understandings providing for
the issuance of the additional shares of Series C Preferred Stock that would be made available for issuance upon effectiveness of the
Series C Preferred Reverse Stock Split; provided, however, if we plan to issue any additional shares of Series C Preferred
Stock, pursuant to the provisions of the Series C Preferred Certificate of Designations, we would be required to obtain the approval
of the holder of Series C Preferred Stock to do so.
Fractional Shares
We will not issue fractional certificates for
post-Series C Preferred Reverse Stock Split shares of Series C Preferred Stock in connection with the Series C Preferred Reverse Stock
Split. To the extent any holders of pre-Series C Preferred Reverse Stock Split shares of Series C Preferred Stock are entitled to fractional
shares of Series C Preferred Stock as a result of the Series C Preferred Reverse Stock Split, the Company will issue an additional share
to all holders of fractional shares of Series C Preferred Stock.
No Dissenters’ Rights
Under Delaware law, our stockholders would not
be entitled to dissenters’ rights or rights of appraisal in connection with the implementation of the Series C Preferred Stock
Reverse Stock Split, and we will not independently provide our stockholders with any such rights.
Certain United States Federal Income Tax Consequences
Holders of our shares of Series C Preferred Stock
should consult with their personal tax advisors concerning any tax matters relating to the proposed Series C Preferred Reverse Stock
Split and an increase in the stated value of the Series C Preferred Stock.
Exchange of Stock Certificates
The holders of shares of Series C Preferred Stock
may, but shall not be required to, exchange each certificate representing shares of our Series C Preferred Stock outstanding before the
Series C Preferred Reverse Stock Split for the reduced number of shares of our Series C Preferred Stock resulting from the Series C Preferred
Reverse Stock Split. The Company will provide such new certificates upon a written request by a holder of Series C Preferred Stock accompanied
by such holder’s pre-Series C Preferred Stock Split share certificate being exchanged.
Interests of Directors and Executive Officers
Our directors and executive officers have no
substantial interests, directly or indirectly, in the matters set forth in this proposal.
Vote Required and Recommendation
Our Bylaws provide that, on all matters (other
than the election of directors and except to the extent otherwise required by our Certificate of Incorporation or applicable Delaware
law), the affirmative vote of a majority of the shares outstanding and entitled to vote on the matter will be required for approval.
Section 242(b) of the DGCL requires that we obtain
the approval of the majority of the shares of Series C Preferred Stock outstanding and entitled to vote, separately as a class, in addition
to the approval of the majority of the shares of Common Stock and Series C Preferred Stock, outstanding and entitled to vote, in the
aggregate, if we take any action that adversely affects the powers, preferences or rights of our Series C Preferred Stock. The provisions
of our Series C Preferred Certificate of Designations requires that we obtain the approval of the holders of at least seventy percent
(70%) of the outstanding shares of our Series C Preferred Stock, separately as a class, in addition to the approval of the majority of
the shares of Common Stock and Series C Preferred Stock, outstanding and entitled to vote, in the aggregate, if we take any action that
adversely affects the rights, preferences or privileges of the holders of our Series C Preferred Stock. Such separate approval would
also be required if we were increasing or reducing the number of shares designated as Series C Preferred Stock. Since the Series C Preferred
Reverse Stock Split can be implemented only if the ratio is the same as the ratio for the Common Stock Reverse Stock Split, and, further,
since the stated value of the Series C Preferred Stock must be relatively increased by an amount equal to the ratio of the Series C Preferred
Reverse Stock Split, the rights, preferences and privileges of the holder of the Series C Preferred Stock will not be affected adversely
or disproportionately compared to the rights of the holders of our Common Stock. Additionally, we are not proposing to increase or reduce
the number of shares designated as Series C Preferred Stock.
Accordingly, the affirmative vote of a majority
of the shares of Common Stock and Series C Preferred Stock, in the aggregate, outstanding on the Record Date and entitled to vote on
the matter will be required to (i) approve the Series C Preferred Reverse Stock Split and (ii) increase the stated value of the Series
C Preferred Stock as stated herein.
At the Special Meeting, a vote will be taken
on a proposal to amend the Certificate of Incorporation to effect (i) the Series C Preferred Reverse Stock Split and (ii) the increase
of the stated value of the Series C Preferred Stock as provided herein.
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR”
THE APPROVAL OF
PROPOSAL NO. 2.
FUTURE STOCKHOLDER PROPOSALS
The Board has not yet determined the date on
which the next Annual Meeting of Stockholders will be held. Stockholders may submit proposals on matters appropriate for stockholder
action at annual meetings in accordance with the rules and regulations adopted by the SEC. Any proposal which an eligible stockholder
desires to have included in our proxy statement and presented at the next Annual Meeting of Stockholders will be included in our proxy
statement and related proxy card if it is received by us a reasonable time before we begin to print and send our proxy materials and
if it complies with SEC rules regarding inclusion of proposals in proxy statements. In order to avoid controversy as to the date on which
we receive a proposal, it is suggested that any stockholder who wishes to submit a proposal submit such proposal by certified mail, return
receipt requested.
Other deadlines apply to the submission of stockholder
proposals for the next Annual Meeting of Stockholders that are not required to be included in our proxy statement under SEC rules. With
respect to these stockholder proposals for the next Annual Meeting of Stockholders, a stockholder’s notice must be received by
us a reasonable time before we begin to print and send our proxy materials. The form of proxy distributed by the Board for such meeting
will confer discretionary authority to vote on any such proposal not received by such date. If any such proposal is received by such
date, the proxy statement for the meeting will provide advice on the nature of the matter and how we intend to exercise our discretion
to vote on each such matter if it is presented at that meeting.
EXPENSES AND SOLICITATION
We will bear the costs of printing and mailing
proxies. In addition to soliciting stockholders by mail or through our regular employees, we may request banks, brokers and other custodians,
nominees and fiduciaries to solicit their customers who have shares of our Common Stock and/or shares of Series C Preferred Stock registered
in the name of a nominee and, if so, will reimburse such banks, brokers and other custodians, nominees and fiduciaries for their reasonable
out-of-pocket costs. Solicitation by our officers and employees may also be made of some stockholders following the original solicitation.
ADDITIONAL INFORMATION
We are subject to the information and reporting
requirements of the Exchange Act, and in accordance therewith, we file periodic reports, documents and other information with the SEC
relating to our business, financial statements and other matters. Such reports and other information may be accessed at www.sec.gov.
You are encouraged to review our Annual Report on Form 10-K for the fiscal year ended December 31, 2020, filed with the SEC on April
15, 2021, together with any subsequent information we filed or will file with the SEC and other publicly available information. A copy
of any public filing is also available, at no charge, by contacting our legal counsel, Sullivan & Worcester LLP, Attn: David E. Danovitch,
Esq. at (212) 660-3060.
Proxies may be solicited by directors, executive
officers, and other employees of the Company in person or by telephone or mail only for use at the Special Meeting or any adjournment
thereof. The Company has retained Laurel Hill Advisory Group LLC (“Laurel Hill”) to assist with the solicitation of proxies
for a project management fee of $7,500, plus reimbursement for out-of-pocket expenses. The Company may also engage Laurel Hill to solicit
proxies by telephone for a reasonable additional fee determined on a per call basis. All solicitation costs will be borne by the Company.
*************
It is important that the proxies be returned
promptly and that your shares of Common Stock and/or Series C Preferred Stock be represented. Stockholders are urged to mark, date, execute,
and promptly return the accompanying proxy card.
____, 2021
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By Order of the Board of Directors,
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/s/ Chia-Lin
Simmons
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Chia-Lin Simmons
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Chief Executive Officer
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Appendix A
FORM OF CERTIFICATE OF AMENDMENT OF
CERTIFICATE OF INCORPORATION OF
NXT-ID, INC.
Nxt-ID, Inc., a corporation organized and existing
under and by virtue of the General Corporation Law of the State of Delaware (the “Corporation”), does hereby certify
that:
FIRST: The name of the Corporation is Nxt-ID,
Inc.
SECOND: This Certificate of Amendment (this “Certificate
of Amendment”) amends the provisions of the Corporation’s Certificate of Incorporation, as amended, and any amendments
thereto (the “Certificate of Incorporation”), last amended by a certificate of amendment to the Certificate of Incorporation
filed with the Secretary of State on September 9, 2016.
THIRD: A new Article 4(b) is added to the Certificate
of Incorporation to provide in its entirety as follows:
“b) Upon the filing of this
Amendment with the Secretary of State of the State of Delaware (the “Effective Time”), each ________ outstanding shares
of Common Stock outstanding immediately prior to the Effective Time (the “Old Common Stock”) shall be combined and
converted into one (1) share of Common Stock (the “New Common Stock”) based on a ratio of one share of New Common
Stock for each _____ shares of Old Common Stock (the “Reverse Split Ratio”). This reverse stock split (the “Reverse
Split”) of the outstanding shares of Common Stock shall not affect the total number of shares of capital stock, including the
Common Stock, that the Company is authorized to issue, which shall remain as set forth under this Article 4.
The Reverse Split shall occur without
any further action on the part of the Corporation or the holders of shares of New Common Stock and whether or not certificates representing
such holders’ shares prior to the Reverse Split are surrendered for cancellation. No fractional interest in a share of New Common
Stock shall be deliverable upon the Reverse Split, all of which shares of New Common Stock be rounded up to the nearest whole number
of such shares. All references to “Common Stock” in these Articles shall be to the New Common Stock.
The Reverse Split will be effectuated
on a stockholder-by-stockholder (as opposed to certificate-by-certificate) basis, except that the Reverse Split will be effectuated on
a certificate-by-certificate basis for shares held by registered holders. For shares held in certificated form, certificates dated as
of a date prior to the Effective Time representing outstanding shares of Old Common Stock shall, after the Effective Time, represent
a number of shares of New Common Stock as is reflected on the face of such certificates for the Old Common Stock, divided by the Reverse
Split Ratio and rounded up to the nearest whole number. The Corporation shall not be obligated to issue new certificates evidencing the
shares of New Common Stock outstanding as a result of the Reverse Split unless and until the certificates evidencing the shares held
by a holder prior to the Reverse Split are either delivered to the Corporation or its transfer agent, or the holder notifies the Corporation
or its transfer agent that such certificates have been lost, stolen or destroyed and executes an agreement satisfactory to the Corporation
to indemnify the Corporation from any loss incurred by it in connection with such certificates.
FOURTH: This amendment was duly adopted in accordance
with the provisions of Sections 212 and 242 of the General Corporation Law of the State of Delaware.
FIFTH: This Certificate of Amendment shall be
effective as of New York Time on the date written below.
IN WITNESS WHEREOF, the Corporation has caused
this Certificate of Amendment to be signed by its officer thereunto duly authorized this day of ,
202 .
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NXT-ID, INC.
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By:
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/s/ Chia-Lin
Simmons
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Name:
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Chia-Lin Simmons
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Title:
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Chief Executive Officer
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Appendix B
FORM OF CERTIFICATE OF AMENDMENT OF CERTIFICATE
OF DESIGNATIONS, PREFERENCES AND RIGHTS OF
SERIES C NON-CONVERTIBLE VOTING PREFERRED STOCK
OF
NXT-ID, INC.
The undersigned, Chia-Lin
Simmons, the Chief Executive Officer of Nxt-ID, Inc. (the “Corporation”), pursuant to the provisions of the General
Corporation Law of the State of Delaware (the “GCL”), does hereby certify and set forth as follows:
First: The date
on which the Certificate of Designations, Preferences and Rights of Series C Non-Convertible Voting Preferred Stock of the Corporation
(the “Certificate of Designations”) was originally filed with the Secretary of State of the State of Delaware was
May 23, 2017.
Second: The Board
of Directors of the Corporation (the “Board”), acting in accordance with the provisions of Section 242 of the GCL
and pursuant to the authority vested in the Board by the affirmative vote of a majority of the shares of the Corporation’s common
stock, par value $0.0001 per share, and Series C Non-Convertible Voting Preferred Stock, par value $0.0001 per share (the “Series
C Preferred Stock”), in the aggregate, outstanding and entitled to vote on the matter, adopted resolutions amending the Certificate
of Designations (the “Certificate of Amendment”) as provided below.
Third: Section
12 of the Certificate of Designations has been added to read as follows:
12. REVERSE
STOCK SPLIT. Upon the filing of this certificate of amendment with the Secretary of State of the State of Delaware (the
“Effective Time”), each ________ outstanding shares of Series C Preferred Stock outstanding immediately prior to
the Effective Time (the “Old Series C Preferred Stock”) shall be combined and converted into one (1) share of
Series C Preferred Stock (the “New Series C Preferred Stock”) based on a ratio of one share of New Series C
Preferred Stock for each _____ shares of Old Series C Preferred Stock (the “Reverse Split Ratio”). This reverse
stock split (the “Reverse Split”) of the outstanding shares of Series C Preferred Stock shall not affect the
total number of shares of authorized preferred stock, par value $0.0001 per share, that the Company has designated as Series C
Preferred Stock, which shall remain as set forth under Section 1.
The Reverse Split shall occur without
any further action on the part of the Company or the holders of shares of New Series C Preferred Stock and whether or not certificates
representing such holders’ shares prior to the Reverse Split are surrendered for cancellation. No fractional interest in a share
of New Series C Preferred Stock shall be deliverable upon the Reverse Split, all of which shares of New Series C Preferred Stock be rounded
up to the nearest whole number of such shares. All references to “Series C Preferred Stock” in these Articles shall be to
the New Series C Preferred Stock.
The Reverse Split will be effectuated
on a stockholder-by-stockholder (as opposed to certificate-by-certificate) basis, except that the Reverse Split will be effectuated on
a certificate-by-certificate basis for shares held by registered holders. For shares held in certificated form, certificates dated as
of a date prior to the Effective Time representing outstanding shares of Old Series C Preferred Stock shall, after the Effective Time,
represent a number of shares of New Series C Preferred Stock as is reflected on the face of such certificates for the Old Series C Preferred
Stock, divided by the Reverse Split Ratio and rounded up to the nearest whole number. The Company shall not be obligated to issue new
certificates evidencing the shares of New Series C Preferred Stock outstanding as a result of the Reverse Split unless and until the
certificates evidencing the shares held by a holder prior to the Reverse Split are either delivered to the Company or its transfer agent,
or the holder notifies the Company or its transfer agent that such certificates have been lost, stolen or destroyed and executes an agreement
satisfactory to the Company to indemnify the Company from any loss incurred by it in connection with such certificates.”
Fourth: Section
4(l) of the Certificate of Designations, which sets forth the stated value of the Series C Preferred Stock shall be amended and
restated in its entirety to adjust the stated value, as a result of the one-for-_____ reverse split of the Series C Preferred Stock,
to read as follows:
(l) “Stated Value” means
$______.00 per share, subject to adjustment for stock splits, stock dividends, recapitalizations, reorganizations, combinations, subdivisions
or other similar events occurring after the Effective Time.
Fifth: All other
provisions of the Certificate of Designations shall remain in full force and effect.
Sixth: This
amendment was duly adopted in accordance with the provisions of Sections 228 and 242 of the GCL.
Seventh: This Certificate
of Amendment shall be effective as of 5:30 P.M. New York time on the date written below.
IN WITNESS WHEREOF,
the Corporation has caused this Certificate of Amendment to the Certificate of Designations to be signed by the undersigned, a duly authorized
officer of the Corporation, and the undersigned has executed this Certificate of Amendment and affirms the foregoing as true and under
penalty of perjury this day of , 202 .
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NXT-ID, INC.
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By:
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/s/ Chia-Lin
Simmons
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Name: Chia-Lin Simmons
Title: Chief Executive Officer
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* SPECIMEN *
1 MAIN STREET
ANYWHERE PA 99999-9999
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VOTE ON INTERNET
Go to http://www.vstocktransfer.com/proxy
and log-on using the below control number.
CONTROL #
VOTE BY MAIL
Mark, sign and date your proxy card and return
it in the envelope we have provided.
VOTE IN PERSON
If you would like to vote in person, please
attend the Special Meeting to be held on September 21, 2021 at 9:00 a.m. Eastern Time.
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Please Vote, Sign, Date and Return Promptly
in the Enclosed Envelope.