NXTD NXT ID Inc

Item 1.01 Entry into a Material Definitive Agreement.

On August 13, 2021, Nxt-ID, Inc., a Delaware corporation (the “Company”), entered into a securities purchase agreement (the “Purchase Agreement”) with institutional accredited investors (the “Investors”) providing for an aggregate investment of $4,000,000 by the Investors for the issuance by the Company to them of (i) 1,333,333 shares of Series F Convertible Preferred Stock, par value $0.0001 per share, of the Company (the “Series F Preferred Stock”) convertible into shares of common stock, par value $0.0001 per share, of the Company (the “Common Stock”) that are issuable from time to time upon conversion of such shares of Series F Preferred Stock (the “Conversion Shares”); (ii) warrants, with a term of five and a half (5.5) years exercisable on February 16, 2022, to purchase an aggregate of up to 6,666,665 shares of Common Stock (the “Warrant Shares”) at an exercise price of $0.78 per share, which was the closing price of our Common Stock on August 12, 2021, subject to customary adjustments thereunder. Holders of the Warrants may exercise them by paying the applicable cash exercise price or, if there is not an effective registration statement for the sale of the Warrant Shares at the time of exercise, by exercising on a cashless basis pursuant to the formula provided in the Warrants. The shares of Series F Preferred Stock, the Conversion Shares, the Warrants and the Warrant Shares are collectively referred to as the “Securities.”

Pursuant to the provisions of the Purchase Agreement and the Certificate of Designation of Preferences, Rights and Limitations of the Series F Preferred Stock (the “Certificate of Designation”), each share of Series F Preferred Stock is convertible, at the option of the holders thereof, at any time, subject to certain beneficial ownership limitations, into shares of Common Stock at $0.60 per share, which Conversion Price is subject to certain adjustments. In addition, the Purchase Agreement and the Certificate of Designation also provide for the payment of dividends, in shares of Common Stock, to the holders of the Series F Preferred Stock, of 10% per annum, based on the Stated Value, until the earlier of (i) the date on which the shares of Series F Preferred Stock are converted to Common Stock or (ii) twelve (12) months after the Original Issue Date (as such term is defined in the Certificate of Designation). The shares of Series F Preferred Stock also (i) vote on an as-converted to Common Stock basis, subject to certain beneficial ownership limitations, (ii) are redeemable at the option of the Company, at any time after five (5) years after the Original Issue Date, (iii) rank senior to the Common Stock and any class or series of capital stock created after the Series F Preferred Stock and (iv) have a special preference upon the liquidation of the Company subject only to senior equity securities outstanding.

The Purchase Agreement also contains customary representations, warranties and agreements of the Company and the Investors and customary indemnification rights and obligations of the parties thereto, as well as an obligation to register the Conversion Shares and the Warrant Shares. The Company did not engage in general solicitation or advertising with regard to the issuance and sale of the Securities. The Investors represented that they are accredited investors and purchased the Securities for investment and not with a view to distribution.

A form of the Warrant is included as Exhibit 4.1 and a form of the Purchase Agreement is included as Exhibit 10.1 to this Form 8-K and are incorporated herein by reference.