ABOUT
THIS PROSPECTUS
The
registration statement on Form S-1 of which this prospectus forms a part and that we have filed with the U.S. Securities and Exchange
Commission (“SEC”), includes exhibits that provide more detail of the matters discussed in this prospectus. You should read
this prospectus and the related exhibits filed with the SEC, together with the additional information described under the heading “Where
You Can Find More Information.”
You
should rely only on the information contained in this prospectus and the related exhibits, any prospectus supplement or amendment thereto
and the documents incorporated by reference, or to which we have referred you, before making your investment decision. Neither we, nor
any underwriter or financial advisor engaged by us in connection with this offering, have authorized anyone to provide you with additional
information or information different from that contained in this prospectus. Neither the delivery of this prospectus nor the sale of
our securities means that the information contained in this prospectus is correct after the date of this prospectus.
You
should not assume that the information contained in this prospectus, any prospectus supplement or amendments thereto, as well as information
we have previously filed with the SEC, is accurate as of any date other than the date on the front cover of the applicable document.
Our business, financial condition, results of operations and prospects may have changed since those dates. This prospectus, any prospectus
supplement or amendments thereto do not constitute an offer to sell, or a solicitation of an offer to purchase, the securities offered
by this prospectus, any prospectus supplement or amendments thereto in any jurisdiction to or from any person to whom or from whom it
is unlawful to make such offer or solicitation of an offer in such jurisdiction.
For
investors outside the United States: Neither we, nor any underwriter or financial advisor engaged by us in connection with this offering,
have taken any action that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action
for that purpose is required, other than in the United States. Persons outside the United States who come into possession of this prospectus
must inform themselves about, and observe any restrictions relating to, the offering of the securities covered hereby and the distribution
of this prospectus outside of the United States.
No
person is authorized in connection with this prospectus to give any information or to make any representations about us, the securities
offered hereby or any matter discussed in this prospectus, other than the information and representations contained in this prospectus.
If any other information or representation is given or made, such information or representation may not be relied upon as having been
authorized by us. To the extent there is a conflict between the information contained in this prospectus and any prospectus supplement,
you should rely on the information in such prospectus supplement, provided that if any statement in one of these documents is inconsistent
with a statement in another document having a later date — for example, a document incorporated by reference in this prospectus
or any prospectus supplement — the statement in the document having the later date modifies or supersedes the earlier statement.
Neither
we nor the underwriters have done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction
where action for that purpose is required, other than the United States. You are required to inform yourself about, and to observe any
restrictions relating to, this offering and the distribution of this prospectus.
When
used herein, unless the context requires otherwise, references to the “Nxt-ID,” “Company,” “we,”
“our” and “us” refer to Nxt-ID, Inc., a Delaware corporation.
PROSPECTUS SUMMARY
This
summary highlights selected information contained elsewhere in this prospectus. This summary does not contain all of the information
that you should consider before investing in our securities. You should carefully read this entire prospectus, and our other filings
with the SEC, including the following sections, which are either included herein and/or incorporated by reference herein, “Risk
Factors,” “Special Note Regarding Forward-Looking Statements,” “Management’s Discussion and Analysis of
Financial Condition and Results of Operations” and the consolidated financial statements incorporated by reference herein, before
making a decision about whether to invest in our securities. All references to “we,” “us,” “our,”
and the “Company” refer to Nxt-ID, Inc., unless we specifically state otherwise or the context indicates otherwise.
Company
Overview
Nxt-ID
provides technology products and services for healthcare applications. We have extensive experience in access control, biometric and
behavior-metric identity verification, security and privacy, encryption and data protection, payments, miniaturization, sensor technologies
and healthcare applications.
Our
wholly-owned subsidiary, LogicMark, LLC (“LogicMark”), manufactures and distributes non-monitored and monitored personal
emergency response systems (“PERS”) sold through the United States Department of Veterans Affairs (the “VA”),
healthcare durable medical equipment dealers and distributors and monitored security dealers and distributors.
COVID-19
Pandemic
On
March 11, 2020, the World Health Organization designated the novel coronavirus disease 2019 (“COVID-19”) as a global pandemic.
Sales volumes and the related revenues for most of our products and services were significantly impacted during the latter portion of
the second quarter and throughout the balance of 2020 as a result of the healthcare industry’s focus on COVID-19 prevention
and treatment, which impacted the markets we serve, in particular the VA hospital and clinics. Sales of our products and services have
continued to be impacted as various policies were implemented by federal, state and local governments in response to the COVID-19 pandemic,
the public remains wary of real or perceived opportunities for exposure to the virus. We believe the extent of the COVID-19 pandemic’s
impact on our operating results and financial condition has been and will continue to be driven by many factors, most of which are beyond
our control and ability to forecast. Although we have experienced some positive trends during the first six months of 2021, because of
these uncertainties, we cannot estimate how long or to what extent the pandemic will impact our operations. As a result of prolonged
effects of the COVID-19 pandemic, we may be forced to write-down or write-off assets, restructure our operations, or incur impairment
or other charges that could result in losses. Even though these charges may be non-cash items and may not have an immediate impact on
our liquidity, the fact that we report charges of this nature could contribute to negative market perceptions about us or our securities.
Accordingly, our securityholders could suffer a reduction in the value of our securities that they hold if the trading price of our Common
Stock is adversely impacted due to such market perceptions.
In
light of broader macro-economic risks and already known impacts on certain industries that use our products and services, during 2020
we took targeted steps to lower our operating expenses because of the COVID-19 pandemic. We continue to monitor the impacts of COVID-19
on our operations closely and this situation could change based on a significant number of factors that are not entirely within our control
and are discussed in this and other sections of this prospectus and the information incorporated by reference to the registration statement
of which this prospectus forms a part. We do not expect there to be material changes to our assets on our balance sheet or our ability
to timely account for those assets.
To
date, travel restrictions and border closures have not materially impacted our ability to obtain inventory or manufacture or deliver
products or services to customers; however, they have impacted our ability to develop new markets and visit certain facilities, particularly
VA hospitals. We have taken steps to restrain and monitor our operating expenses and continue to monitor the trends in our business and
broader economy to ensure that we properly track any material changes to the relationship between costs and revenues.
Healthcare
Overview
With
respect to the healthcare market, our business initiatives are driven by LogicMark, which serves a market that enables two-way communication,
medical device connectivity and patient data tracking of key vitals through sensors, biometrics, and security to make home health care
a reality. There are four (4) major trends driving this market: (1) an increased desire for connectivity; specifically, a greater desire
for connected devices by people over 60 years of age who now represent the fastest growing demographic for social media; (2) the growth
of “TeleHealth”, which is the means by which telecommunications technologies are meeting the increased need for health systems
to better distribute doctor care across a wider range of health facilities, making it easier to treat and diagnose patients; (3) rising
healthcare costs – as healthcare spending continues to outpace the economy, the need to reduce hospital readmissions, increase
staffing efficiency and improve patient engagement remain the highest priorities; and (4) the critical shortage of labor in the home
healthcare industry, creating an increased need for technology to improve communication to home healthcare agencies by their clients.
Together, these trends have produced a large and growing market for us to serve. LogicMark has built a successful business on emergency
communications in healthcare. We have a strong business relationship with the VA today, serving veterans who suffer from chronic conditions
that often require emergency assistance. Our strategic plan calls for expanding LogicMark’s business into other healthcare verticals
as well as retail and enterprise channels in order to better serve the expanding demand for connected and remote healthcare solutions.
Home
healthcare is an emerging area for LogicMark. The long-term trend toward more home-based healthcare is a massive shift that is being
driven by demographics (an aging population) and basic economics. People also value autonomy and privacy which are important factors
in determining which solutions will suit the market. Consumers are beginning to enjoy the benefits of smart home technologies and online
digital assistants.
Our
Healthcare Monitoring Market Opportunity
PERS
devices are used to call for help and medical care during an emergency. These devices are also used by a wide patient pool, as well as
the general population, to ensure safety and security when living or traveling alone. The global medical alert systems market caters
to different end-users across the healthcare industry, including individual users, hospitals and clinics, assisted living facilities
and senior living facilities. The growing demand for home healthcare devices is mainly driven by an aging population, rising healthcare
costs and a severe shortage of workers in the home healthcare market worldwide. It is very beneficial for seniors who have a history
of falling or have been identified as having a high fall risk, older individuals who live alone and people who have mobility issues.
We believe that the aging population will spur the usage of medical alert systems across the globe, as they offer safety and medical
security while being affordable and accessible.
Global
PERS Market Growth
Source:
Kenneth Research 2020
The
PERS market is divided into three (3) device segments: landline-based PERS, mobile PERS, and standalone devices. The global PERS market
is projected to grow at a compound annual growth rate (“CAGR”) of 5.8% to $4.5 billion in 2028, benefiting from strong demographic
tailwinds. As landline usage continues to decrease, other technologies such as cellular and WiFi will be used for in-home systems. According
to Kenneth Research, North America, Asia and Europe are the largest markets for PERS, accounting for approximately 37%, 31% and 24% of
total sales, respectively, in 2028. According to Kenneth Research, improvements in healthcare infrastructure and emerging economies will
fuel growth and significantly improve the relative market share of the rest of world regions.
Our
Health Care Products
LogicMark
produces a range of products within the PERS market and has differentiated itself by offering “no monthly fee” products,
which only require a one-time purchase fee, instead of a recurring monthly contract. The “no monthly fee” products contact
family, friends or 911 directly, eliminating the monthly fee from a monitoring center. As a result, we believe LogicMark’s
products are typically the most cost-effective PERS option. LogicMark’s non-monitored solution offers a significant value proposition
over monitored solutions.
The
cost of ownership of a monitored solution, which includes a monthly service fee, can be as much as $1,500 to $3,000 over a five-year
period. This compares to a one-time purchase of a LogicMark no monthly fee device, which provides a similar level of security for a purchase
price as low as one tenth of that amount.
LogicMark
offers both traditional (i.e., landline) and mPERS (i.e., cell-based) options. Our no monthly fee products are sold primarily
through the VA and healthcare distributors.
LogicMark
offers monitored products that are primarily sold by dealers and distributors for the monitored product channel. LogicMark sells its
devices to the dealers and distributors, who in turn offer the devices to consumers as part of their product/service offering. The service
providers charge consumers a monthly monitoring fee for the associated monitoring service. These products are monitored by a third-party
central station.
Our
Health Care Competition
LogicMark
offers a wide variety of products, enabling it to cater to users with different levels of health and safety needs. Compared to its competitors,
we believe LogicMark’s PERS products offer enhanced functionality at the best value due to the one-time purchase for non-monitored
solutions.
The
chart below summarizes LogicMark’s product offering versus those of its competitors:
Our
Health Care Business Strategy
We
intend to expand LogicMark’s product distribution by using larger distributors who can leverage the consumer value proposition
of offering a one-time device purchase as opposed to a leased monthly solution. We also intend to apply our technology to the next generation
of PERS devices that will have greater functionality, innovative design and clinical monitoring capability. We believe that there is
further potential for expansion in the domestic and international retail and institutional/senior living markets, and we intend to take
advantage of this through a new product offering, Notifi911+, which is a non-monitored device developed for direct-to-consumer sales
through retail channels and direct marketing initiatives. We are also seeking to leverage our PERS experience to develop new offerings
to serve the home healthcare and senior living markets with WiFi notification services.
Overall,
our healthcare division, through LogicMark, is positioned to take advantage of favorable market dynamics, a stable revenue-producing
customer base, a differentiated product line, a robust new product development pipeline and compelling growth opportunities.
Payments
and Financial Technology
Overview
Between 2017 and 2019, we also conducted a
payment credential management business through our former wholly-owned subsidiary, Fit-Pay, Inc. (“Fit Pay”). With the approval
of our Board, and upon similar terms and conditions to those set forth in that loan agreement, we entered into a non-binding letter of
intent for a potential sale of Fit Pay, excluding certain assets on August 6, 2019. In connection with the letter of intent, the purchaser
advanced $500,000 of non-interest bearing working capital for Fit Pay. On September 9, 2019, we completed the sale of Fit Pay to Garmin
International, Inc. for $3.32 million in cash. After the closing of the sale of our Fit Pay business, we terminated conducting any further
business related to payment credential management.
Our
Intellectual Property
Our
ability to compete effectively depends to a significant extent on our ability to protect our proprietary information. We currently rely
and will continue to rely primarily on patents and trade secret laws and confidentiality procedures to protect our intellectual property
rights. We have filed the following patent applications, nineteen of which have been awarded to date:
THE
UN-PASSWORD™: RISK AWARE END-TO-END MULTI-FACTOR AUTHENTICATION VIA DYNAMIC PAIRING
Filed
March 17, 2014
Application
Number 14/217,202
Patent
Number 9,407,619
METHOD
TO LOCALLY VALIDATE IDENTITY WITHOUT PUTTING PRIVACY AT RISK
Filed
September 1, 2015
Application
Number 14/842,252
Patent
Number 10,282,535
METHOD
TO LOCALLY VALIDATE IDENTITY WITHOUT PUTTING PRIVACY AT RISK
Filed
May 6, 2019
Application
Number 16/404,044
METHODS
AND SYSTEMS RELATED TO MULTI-FACTOR, MULTIDIMENSIONAL, MATHEMATICAL, HIDDEN AND MOTION SECURITY PINS
Filed
August 1, 2016
Application
Number 15/224,998
Patent
Number 10,565,569
COMPONENTS
FOR ENHANCING OR AUGMENTING WEARABLE ACCESSORIES BY ADDING ELECTRONICS THERETO
Filed
September 2, 2015
Application
Number 14/843,930
Patent
Number 10,395,240
COMPONENTS
FOR ENHANCING OR AUGMENTING WEARABLE ACCESSORIES BY ADDING ELECTRONICS THERETO
Filed
August 22, 2019
Application
Number 16/550,698
THE
UN-PASSWORD: RISK AWARE END-TO-END MULTI-FACTOR AUTHENTICATION VIA DYNAMIC PAIRING
Filed
March 14, 2016
Application
Number 15/068,834
Patent
Number 10,015,154
THE
UN-PASSWORD: RISK AWARE END-TO-END MULTI-FACTOR AUTHENTICATION VIA DYNAMIC PAIRING
Filed
July 2, 2018
Application
Number 16/025,992
Patent
Number 10,609,014
SYSTEM
AND METHOD TO AUTHENTICATE ELECTRONICS USING ELECTRONIC-METRICS
Filed
July 5, 2016
Application
No. 15/202,553
Patent
Number 10,419,428
SYSTEM
AND METHOD TO AUTHENTICATE ELECTRONICS USING ELECTRONIC-METRICS
Filed
September 15, 2019
Application
No. 16/571,171
Patent
Number 10,841,301
PREFERENCE
DRIVEN ADVERTISING SYSTEM AND METHOD
Filed
July 15, 2016
Application
Number 15/212161
Patent
Number 10,643,245
PREFERENCE
DRIVEN ADVERTISING SYSTEM AND METHOD
Filed
May 4, 2020
Application Number 16/866,487
AN
EVENT DETECTOR FOR ISSUING A NOTIFICATION RESPONSIVE TO OCCURRENCE OF AN EVENT
Filed
July 27, 2018
Application
Number 16/048,181
METHOD
AND SYSTEM TO IMPROVE ACCURACY OF FALL DETECTION USING MULTI-SENSOR FUSION
Filed
December 17, 2018
Application
Number 16/222,359
METHOD
AND SYSTEM TO REDUCE INFRASTRUCTURE COSTS WITH SIMPLIFIED INDOOR LOCATION AND RELIABLE COMMUNICATIONS
Filed
November 11, 2019
Application
Number 16/679,494
WIRELESS
CENTRALIZED EMERGENCY SERVICES SYSTEM
Filed
January 15, 2008
Application
Number 12/007,740
Patent
Number 8,275,346
VOICE-EXTENDING
EMERGENCY RESPONSE SYSTEM
Filed
September 5, 2008
Application
Number 12/230,841
Patent
Number 8,121,588
LIST-BASED
EMERGENCY CALLING DEVICE
Filed
March 11, 2009
Application
Number 12/402,304
Patent
Number 8,369,821
ALARM
SIGNALING DEVICE AND ALARM SYSTEM
Filed
February 2, 2005
Application
Number 10/523,115
Patent
Number 7,312,709
FALL
DETECTION SYSTEM HAVING A FLOOR HEIGHT THRESHOLD AND A RESIDENT HEIGHT DETECTION DEVICE
Filed
June 27, 2008
Application
Number 12/216,053
Patent
Number 7,893,844
APPARATUS
AND METHOD FOR LOCATING AND UPDATING LOW-POWER WIRELESS COMMUNICATION DEVICES
Filed
August 24, 2014
Application
Number 14/467,268
Patent
Number 9,472,088
APPARATUS
AND METHOD FOR LOCATING AND UPDATING LOW-POWER WIRELESS COMMUNICATION DEVICES
Filed
September 8, 2016
Application
Number 15/259,247
Patent
Number 9,900,737
ALARM
SIGNALING DEVICE AND ALARM SYSTEM
Canadian
patent
Filed
August 1, 2003
Application
Number 2,494,166
Patent
Number 2,494,166
APPARATUS
AND METHOD FOR LOCATING AND UPDATING LOW-POWER WIRELESS COMMUNICATION DEVICES
Canadian
Patent
Filed
August 11, 2015
Application
Number 2,900,180
We
enter into confidentiality agreements with our consultants and key employees, and maintain control over access to and distribution of
our technology, software and other proprietary information. The steps that we have taken to protect our technology may be inadequate
to prevent others from using what we regard as our technology to compete with us.
We
do not generally conduct exhaustive patent searches to determine whether the technology used in our products infringes on the patents
that are held by third parties. In addition, product development is inherently uncertain in a rapidly evolving technological environment
in which there may be numerous patent applications pending, many of which are confidential when filed, with regard to similar technologies.
We
may face claims by third parties that our products or technology infringe their patents or other intellectual property rights in the
future. Any claim of infringement could cause us to incur substantial costs defending against the claim, even if the claim is invalid,
and could distract the attention of our management. If any of our products are found to violate third-party proprietary rights, we may
be required to pay substantial damages. In addition, we may be required to re-engineer our products or seek to obtain licenses from third
parties to continue to offer our products. Any efforts to re-engineer our products or obtain licenses on commercially reasonable terms
may not be successful, which would prevent us from selling our products, and in any case, could substantially increase our costs and
have a material adverse effect on our business, financial condition and results of operations.
Corporate
Information
History
We
were incorporated in the State of Delaware on February 8, 2012. We are a security technology company and we currently operate our business
in one segment – hardware and software security systems and applications. We are engaged in the development of proprietary products
and solutions that serve multiple end markets, including the security, healthcare, financial technology and the Internet of Things (“IoT”)
markets. We evaluate the performance of our business on, among other things, profit and loss from operations. With extensive experience
in access control, biometric and behavior-metric identity verification, security and privacy, encryption and data protection, payments,
miniaturization, and sensor technologies, we develop and market solutions for payment, IoT and healthcare applications.
Our
wholly-owned subsidiary, LogicMark, manufactures and distributes non-monitored and monitored personal emergency response systems sold
through the VA, healthcare durable medical equipment dealers and distributors and monitored security dealers and distributors.
Our
principal executive offices are located at 288 Christian Street, Hangar C, 2nd Floor, Oxford, Connecticut 06478, and
our telephone number is (203) 266-2103. Our website address is www.nxt-id.com. The information contained therein or connected
thereto shall not be deemed to be incorporated into this prospectus. The information on our website is not part of this prospectus.
Recent
Developments
Closing
of August Offering and Designation of Series F Preferred Stock
As previously disclosed on the Company’s Current Report on Form
8-K filed with the SEC on August 17, 2021 (the “August 17th Form 8-K”), we closed a private placement offering
on August 16, 2021 (the “August Offering”), pursuant to which we issued to institutional accredited investors (the “August
Investors”), in consideration for an aggregate investment of $4,000,000 and pursuant to a securities purchase agreement, dated as
of August 13, 2021 (the “August Purchase Agreement”), (i) an aggregate of 1,333,333 shares of Series F Preferred Stock and
(ii) the warrants (the “August Warrants”), which each have a term of five and a half (5.5) years and are exercisable on February
16, 2022 for an aggregate of up to 6,666,665 shares of Common Stock at an exercise price of $0.78 per share, subject to customary adjustments
thereunder. The shares of Series F Preferred Stock are convertible, at the option of the holders, subject to beneficial ownership limitations,
into such number of shares equal to the Stated Value (valued at $3.00 per share in the Certificate of Designation of Preferences, Rights
and Limitations of the Series F Preferred Stock (the “Series F Certificate of Designation”)) divided by the Conversion Price
(initially valued at $0.60 per share in the Series F Certificate of Designation), which Conversion Price is subject adjustment as follows
(such new Conversion Price, the “Reset Conversion Price”): (i) upon the SEC declaring the registration statement on Form S-3
to register for resale the shares of Common Stock issuable upon conversion or exercise, as applicable, of the shares of Series F Preferred
Stock and the August Warrants (the “Resale Registration Statement”), the Conversion Price will equal 90% of the average VWAPs
reported on Nasdaq for the five consecutive trading days after the effective date of the Resale Registration Statement (the “Conversion
Price Reset Calculation Period”) if 90% of the average VWAPs for such period is lower than the Conversion Price in effect at the
time of the effective date of the Resale Registration Statement; and (ii) upon the closing of this offering of shares of Common Stock
and Warrants, the Conversion Price will equal the combined public offering price of the shares of Common Stock and accompanying Warrants
if such combined public offering price is lower than the Conversion Price in effect at the time of the closing this offering, all subject
to a floor Conversion Price of $0.375 per share (the “Floor Price”). On September 3, 2021, the SEC declared the Resale Registration
Statement effective. The maximum number of shares of Common Stock issuable upon conversion of the 1,333,333 shares of Series F Preferred
Stock at the Floor Price is 10,666,664 shares of Common Stock. As of September 10, 2021, an aggregate of 993,333 shares of Series F Preferred
Stock have been converted by their holders into 5,445,009 shares of Common Stock, using an assumed Reset Conversion Price of $0.54729
per share.
In
connection with the August Offering, on August 16, 2021, the Company filed with the Secretary of State of the State of Delaware (i) the
Series F Certificate of Designation establishing the rights, preferences, privileges, qualifications, restrictions, and limitations relating
to the Series F Preferred Stock, and (ii) an Elimination of the Certificate of Designation of Preferences, Rights and Limitations of
Series E Convertible Preferred Stock in order to eliminate and cancel all designations, rights, preferences and limitations of our shares
of Series E Convertible Preferred Stock, par value $0.0001 per share, of the Company (the “Series E Preferred Stock”). For
more information on the preferences, rights and limitations of the Series F Preferred Stock, see the Form of Series F Certificate of
Designation, filed as an exhibit to the August 17th Form 8-K.
Settlement
Agreement with GDMSAI
As
previously disclosed on the Company’s Current Report on Form 8-K filed with the SEC on August 13, 2021, the Company entered into
a settlement agreement, effective August 11, 2021 (the “Settlement Agreement”), with Giesecke+Devrient Mobile Security America,
Inc. (“GDMSAI”) to settle an ongoing dispute between the parties (the “Dispute”) with regard to the payment of
dividends under the Company’s Certificate of Designations, Preferences and Rights of Series C Non-Convertible Voting Preferred
Stock (the “Series C Certificate of Designations”). Pursuant to the Settlement Agreement, the Company has agreed to compensate
GDMSAI in cash in full satisfaction of the amounts that GDMSAI asserted it is owed for past dividend payments under the Series C Certificate
of Designations, with such payment obligations to be guaranteed by LogicMark, subject to the senior obligations to the Company’s
senior lender, CrowdOut Capital LLC (“CrowdOut”). In addition, pursuant to the Settlement Agreement, each of the Company
and GDMSAI have agreed to withdraw their respective filings with the Court of Chancery for the State of Delaware regarding the Dispute
and have agreed that such payments to GDMSAI will be in full settlement and satisfaction of any obligations of the Company with respect
to any litigation or proceedings relating to the Dispute.
Resignation
of Vincent S. Miceli from the Board
As
previously disclosed on the Company’s Current Report on Form 8-K filed with the SEC on August 13, 2021, Vincent S. Miceli notified
the Company on August 9, 2021 of his decision to resign from the Board and as Chairman of the Board, effective immediately. Mr. Miceli
did not resign due to any disagreement between the Company and Mr. Miceli, or any matter related to the Company s operations, policies
or practices.
Interim
Chief Financial Officer and Consulting Agreement
As
previously disclosed on the Company’s Current Report on Form 8-K filed with the SEC on July 21, 2021, the Board formally appointed
Mark Archer to the role of Interim Chief Financial Officer of the Company. In connection with such appointment, the Company entered into
a consulting agreement, effective as of July 15, 2021, with FLG Partners, pursuant to which the Company has agreed to compensate FLG
Partners for its engagement of Mr. Archer’s services to the Company in such role.
Appointment
of Chief Executive Officer
As
previously disclosed on the Company’s Current Report on Form 8-K filed with the SEC on June 17, 2021, Chia-Lin Simmons was appointed
the roles of Chief Executive Officer of the Company and member of the Board, effective June 14, 2021. In connection therewith, the Company
entered into an employment agreement with Ms. Simmons, dated as of June 8, 2021 and effective as of June 14, 2021 upon ratification of
the Board (the “Simmons Employment Agreement”). Pursuant to the Simmons Employment Agreement, Ms. Simmons agreed to serve
as our Chief Executive Officer in consideration for an annual cash salary, incentive bonuses as determined by the Board, a one-time sign-on
bonus, and employee benefits, including health and disability insurance. Additionally, pursuant to the Simmons Employment Agreement and
as a material inducement to Ms. Simmons’ acceptance of employment with the Company, the Company offered Ms. Simmons shares of restricted
stock of the Company, which was approved by the Board’s compensation committee, and issued in accordance with Nasdaq Listing Rule
5635(c)(4) outside of the Company’s 2017 Stock Incentive Plan and 2013 Long-Term Stock Incentive Plan. In connection with the Stock
Award, the parties entered into a restricted stock award Agreement on June 14, 2021, which agreement contemplates that the restricted
shares vest over a 48-month period commencing on June 14, 2021. One fourth of such shares will vest on June 14, 2022 and thereafter,
1/36 of such shares will vest on the first day of each subsequent month until all such shares have vested.
CrowdOut
Waiver
As
previously disclosed in the Company’s Current Report on Form 8-K, filed with the SEC on May 9, 2019, the Company is a party to
that certain Senior Secured Credit Agreement, dated May 3, 2019 (the “Credit Agreement”) between the Company and CrowdOut.
The Credit Agreement provides, among other things, that any money judgment involving (i) in any individual case an amount in excess of
$100,000 or (ii) in the aggregate at any time an amount in excess of $250,000 entered or filed against the Company that remains undischarged,
unvacated, unbonded or unstayed for a period of sixty (60) days will constitute an event of default. On May 25, 2021, CrowdOut agreed
to waive Section 8.01(h) of the Credit Agreement for a period of 30-days, for a $5,000 monitoring fee, upon the Delaware Chancery Court
entering a judgment in favor of GDMSAI against the Company in the amount of $540,000 plus interest. See also “Prospectus Summary
– Recent Developments – Settlement Agreement with GDMSAI”.
Senior
Secured Debt Prepayment
On
May 3, 2021, the Company made a prepayment to CrowdOut of approximately $3.0 million in principal of its senior secured debt. As a result
of such prepayment, the Company reduced the outstanding principal amount to approximately $2.2 million. On July 1, 2021, the Company,
made a $1,064,627 voluntary prepayment on such term loan. The Company did not incur a prepayment premium as it relates to such voluntary
prepayment. After such prepayment, the Company’s term loan balance was $0. As a result of such prepayment, as of the date of this
prospectus, the Company has an outstanding exit fee of $1,072,500 due to CrowdOut in connection with such loan.
Regaining
Compliance with Nasdaq Listing Requirements
On August 16, 2021, we received a letter from
The Nasdaq Stock Market LLC, stating that The Nasdaq Stock Market LLC’s Hearing’s Panel (the “Panel”) has determined
to grant the Company’s request to remain listed on Nasdaq (the “August Letter”), subject to the following conditions:
(i) on or before August 19, 2021, the Company will have completed its planned private investment in public equity transaction, (ii) on
or before August 26, 2021, the Company will have filed with the SEC a registration statement for the completion of a public offering,
(iii) on or before September 15, 2021, the Company will have completed such public offering pursuant to such registration statement,
(iv) on or before October 15, 2021, the Company will hold its planned special meeting of its stockholders to obtain approval to effect
a reverse split of its Common Stock and Series C Non-Convertible Voting Preferred Stock of the Company, par value $0.0001 per share (the
“Series C Preferred Stock”), and (v) on or before November 1, 2021, the Company will have demonstrated compliance with Nasdaq
Listing Rule 5550(a)(2). On August 16, 2021, the Company closed the August Offering, which the Company believes resulted in compliance
with the first condition listed in the August Letter described above. On August 26, 2021, the Company filed a registration statement,
of which this prospectus forms a part, in order to comply with the second condition listed in the August Letter described above, and
intends to complete this offering on or prior to September 15, 2021 in order to comply with the third condition listed in the August
Letter described above, which condition is subject to the SEC declaring such registration statement effective prior to such date. The
Company intends to hold its planned special meeting of its stockholders to effect such reverse split in order to comply with the fourth
condition listed in the August Letter described above, and has filed a preliminary proxy statement with the SEC on July 23, 2021 regarding
such special meeting. It is the Company’s intention that upon demonstrating compliance with conditions (i)-(iv) listed in the August
Letter, it will be able to demonstrate compliance with Nasdaq Listing Rule 5550(a)(2) on or before November 1, 2021 to satisfy the fifth
condition listed in the August Letter and described above.
As
previously disclosed on our Current Report on Form 8-K that we filed with the SEC on May 24, 2019, we initially received written notice
from the staff of the Listing Qualifications Department of The Nasdaq Stock Market LLC indicating that we were not in compliance with
Nasdaq Listing Rule 5550(a)(2) because the closing bid price of our Common Stock had closed below $1.00 per share for the previous 30
consecutive business days (the “Minimum Bid Price Requirement”) and had 180 calendar days from the date therein to regain
compliance, which was extended due to the global market impact caused by COVID-19 to August 3, 2020. We subsequently received a further
extension from the Nasdaq Stock Market LLC requiring us to evidence a closing bid price of our Common Stock above $1.00 per share for
at least ten consecutive trading days by February 1, 2021.
As
previously disclosed on our Current Report on Form 8-K that we filed with the SEC on January 5, 2021, as a result of the closing bid
price of our Common Stock having closed above $1.00 per share for at least ten consecutive trading days prior to February 1, 2021, we
received a letter from The Nasdaq Stock Market LLC, dated January 4, 2021 (the “Nasdaq Letter”), confirming that we had,
at that time, regained compliance with the Minimum Bid Price Requirement, but remained subject to a monitoring period until July 5, 2021
(the “Monitor Period”), pursuant to which (i) we were required to notify the Panel in writing in the event that the closing
bid price of our Common Stock fell below $1.00 on any trading day and in the event we are not in 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 us that it would promptly conduct a hearing with regards to such deficiency
Subsequently,
on June 18, 2021, we received a determination letter from The Nasdaq Stock Market LLC (the “June Letter”) stating that we
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
Letter to us, which advised us that our Common Stock was subject to delisting from Nasdaq, but providing us an opportunity to appeal
such delisting determination by requesting a hearing with the Panel. We subsequently requested a hearing before the Panel to appeal the
June Letter, which hearing was held on July 29, 2021 (the “July Hearing”). Subsequently, we received the August Letter described
above.
There
can be no assurance that the Company will be able to comply with all of the obligations placed on us by the Panel pursuant to the August
Letter or The Nasdaq Stock Market LLC, and, assuming that we are able to comply with such obligations, that we will be able to continue
to comply with the listing standards of The Nasdaq Stock Market LLC in the future, including the Minimum Bid Price Requirement. If we
fail to meet all of the conditions listed in the August Letter, our Common Stock will be delisted from Nasdaq. Additionally, assuming
we are able to comply with all such obligations, if we fail to comply with all applicable Nasdaq listing requirements now or in the future,
our Common Stock may be subject to delisting from Nasdaq.
Legal
Proceedings
On
February 24, 2020, Michael J. Orlando, one of our former directors and our former Chief Operating Officer, as shareholder representative
(the “Shareholder Representative”), and the other stockholders of Fit Pay (collectively, the “Fit Pay Shareholders”),
filed a lawsuit in the United States District Court for the Southern District of New York against the Company, CrowdOut Capital, LLC,
and Garmin International, Inc. (the “Complaint”). See Orlando v. Nxt-ID, Inc. No. 20-cv-1604 (S.D.N.Y.). The Complaint alleges
that the Company has breached certain contractual obligations under a merger agreement, dated May 23, 2017, between Fit Pay and the Company,
regarding certain future, contingent earnout payments allegedly that could be owed to the Fit Pay Shareholders from future revenues.
The Complaint seeks unspecified monetary damages from the defendants. While we believe that these claims are without merit and we plan
to vigorously defend the action, there is no assurance that we will be successful in such defense. On May 12, 2020, the Company filed
an answer and counterclaims alleging, among other things, fraud and breach of fiduciary duty of the Shareholder Representative as well
as arguing that the Shareholder Representative should be estopped from pursuing these claims. The Company has moved for summary judgment
to have the lawsuit dismissed. In March 2021, following our successful application to stay all discovery, the court granted CrowdOut
and Garmin’s separate motions to dismiss. The Shareholder Representative’s claim against the Company still remains and the
Company’s motion for summary judgment is still pending.
THE OFFERING
Shares of Common Stock Offered
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22,462,562
shares of Common Stock (25,831,946 shares of Common Stock if the underwriter exercises its over-allotment option in full to purchase
shares of Common Stock), based on an assumed combined public offering price of $0.601 per share and accompanying Warrant, which is
based on the closing price of our Common Stock of $0.601 per share on September 8, 2021.
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Warrants offered by us
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We are also offering
Warrants to purchase up to an aggregate of 22,462,562 shares of Common Stock (Warrants to purchase up to an aggregate of 25,831,946
shares of Common Stock if the underwriter exercises its over-allotment option in full to purchase Warrants), based on an assumed
combined public offering price of $0.601 per share and accompanying Warrant (other than with respect to shares of Common Stock
purchased in connection with the underwriter’s over-allotment option). Each share of Common Stock is being sold together with
a Warrant to purchase one (1) share of Common Stock. Warrants will be exercisable at an exercise price of $0.6611 per share for each
share of Common Stock issuable (110% of the combined public offering price of the shares of Common Stock and accompanying Warrants),
will be exercisable commencing on the effective date of a reverse stock split of our shares of Common Stock or an increase in the
number of authorized shares of our Common Stock, so that we have a sufficient number of shares of Common Stock reserved for issuance
upon exercise of the Warrants by paying the aggregate exercise price for the Warrants being exercised and, in the event there is, at
any time, after the initial exercise date, no effective registration statement registering the Warrant Shares, or the prospectus
contained therein is not available for the issuance of the Warrant Shares, then the Warrants may also be exercised on a cashless
basis for a net number of shares, as provided in the formula in the Warrant. In either case, the Warrants will expire on the fifth
anniversary of their initial exercise date. In addition, on the date on which such reverse stock split is effected, the exercise
price of the Warrants will be reset to the lesser of (i) the exercise price then in effect after taking into account and adjusting
for such reverse stock split and (ii) the closing per share price of the Common Stock immediately prior to the effective date of
such reverse stock split, taking into account and adjusting for such split. This offering also relates to the shares of Common Stock
issuable upon exercise of the Warrants. See “Description of the Securities That We Are Offering –
Warrants”.
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Assumed combined public offering price
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$0.601 per share and
accompanying Warrant. The actual number of shares of Common Stock and Warrants that we will offer will be determined based on the
actual combined public offering price.
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Option to purchase additional securities
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We have granted the
underwriter an option for a period of 45 days from the date of this prospectus to purchase up to an additional 3,369,384 shares of
Common Stock based on an assumed public offering price of $0.591 attributed to the Common Stock and/or Warrants to purchase up to
an additional 3,369,384 shares of Common Stock based on a public offering price of $0.01 attributed to the Warrants, without taking
into account the underwriting discounts.
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Common Stock outstanding after this offering (1)
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81,719,469 shares of
Common Stock, based on an assumed combined public offering price of $0.601 per share and accompanying Warrant (assuming no exercise
of any Warrants and no exercise by the underwriter of its over-allotment option) (1).
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Use of proceeds
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We estimate that the
net proceeds from this offering will be approximately $12,265,114, based on an assumed combined public offering price of $0.601 per
share and accompanying Warrant, assuming no exercise of any Warrants and no exercise by the underwriter of its over-allotment option,
and after deducting the underwriting discounts and commissions and estimated offering expenses payable by us. We intend to use the
net proceeds from this offering for new product development, working capital and liability reduction purposes. See “Use of
Proceeds” on page 24 of this prospectus supplement.
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Risk factors
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An investment
in our securities is highly speculative and involves substantial risk. Please carefully consider the “Risk Factors” section
on page 14 and other information in this prospectus for a discussion of factors to consider before deciding to invest in
the securities offered hereby. Additional risks and uncertainties not presently known to us or that we currently deem to be immaterial
may also impair our business and operations.
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Lock-up agreements
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We and our directors
and officers have agreed with the underwriter not to offer for sale, issue, sell, contract to sell, pledge or otherwise dispose of
any of our Common Stock or securities convertible into common stock for a period of three (3) months from the date of this prospectus
without the prior written consent of the underwriter. See “Underwriting—Lock-up Agreements.”
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Voting agreements
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We expect certain investors
who purchase in excess of $100,000 in this offering to agree with the underwriter to enter into a voting agreement pursuant
to which such investors intend to agree to vote all shares of Common Stock they beneficially own on the closing date of this offering,
including the shares of Common Stock purchased by them in this offering, with respect to any proposals presented to the stockholders
of the Company at the Company’s next stockholders meeting, which is expected to be held on or around October 15, 2021; provided,
however, that such requirement will not require such investor to vote its shares for or against any particular proposal or proposals,
whether or not such proposal or proposals are recommended by our Board.
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Transfer agent and registrar
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The transfer agent and
registrar for our Common Stock is VStock Transfer, LLC, with its business address at 18 Lafayette Place, Woodmere, NY 11598.
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Nasdaq symbol and trading
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Our Common Stock is
listed on Nasdaq under the symbol “NXTD”. There is no established trading market for the Warrants, and we do not expect
a trading market for the Warrants to develop. We do not intend to list the Warrants on any securities exchange or other trading market.
Without a trading market, the liquidity of the Warrants will be extremely limited.
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(1)
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Shares of
our Common Stock that will be outstanding after this offering is based on 59,256,907 shares of Common Stock outstanding as of September
10, 2021, and excludes the following as of such date: (i) the exercise of outstanding warrants to purchase up to an aggregate of
16,044,798 shares of Common Stock at a weighted average exercise price of approximately $1.32 per share, (ii) the exercise of outstanding
options granted to certain directors of the Company to purchase up to an aggregate of 408,584 shares of Common Stock at a weighted
average exercise price of $0.59 per share, (iii) the conversion of the 340,000 outstanding shares of Series F Preferred Stock into
up to 1,863,728 shares of Common Stock using an assumed Reset Conversion Price equal to $0.54729 per share, (iv) shares of our Common
Stock issuable pursuant to the exercise of the Warrants and (v) shares of our Common Stock issuable upon exercise of the underwriter’s
over-allotment option. For purposes of determining the number of shares of Common Stock issuable upon the 993,333 shares of Series
F Preferred Stock that have been converted as of September 10, 2021 and the number of shares of Common Stock issuable upon the conversion
of the 340,000 shares of Series F Preferred Stock outstanding, a Reset Conversion Price of $0.54729 per share has been assumed for
the Conversion Price Reset Calculation Period, as only the average VWAPs for the four consecutive trading days after the effective
date of the Resale Registration Statement has been calculated as of the date of this prospectus. The actual Reset Conversion Price
for all five trading days for the Conversion Price Reset Calculation Period (which is subject to further adjustment pursuant to the
Series F Certificate of Designation upon the closing of this offering if the public offering price of the shares of Common Stock
is lower than the actual Reset Conversion Price on the date of such closing) has not been included in this prospectus, and the assumed
Reset Conversion Price is based on the assumption that the fifth day’s VWAP is consistent with the VWAPs of the four previous
trading days.
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RISK FACTORS
An investment in the securities offered under
this prospectus involves a high degree of risk. You should carefully consider and evaluate all of the information contained in this prospectus
and in the documents that we incorporate by reference herein before you decide to invest in our securities. In particular, you should
carefully consider and evaluate the risks and uncertainties described under the heading “Risk Factors” in this prospectus
and in the documents incorporated by reference herein. Investors are further advised that the risks described below may not be the only
risks we face. Additional risks that we do not yet know of, or that we currently think are immaterial, may also negatively impact our
business operations or financial results. Any of the risks and uncertainties set forth in this prospectus and in the documents incorporated
by reference herein, as updated by annual, quarterly and other reports and documents that we file with the SEC and incorporate by reference
into this prospectus, could materially and adversely affect our business, results of operations and financial condition, which in turn
could materially and adversely affect the value of our securities.
Risks Related to this Offering and Ownership
of Our Common Stock
If we are not able to comply with all of
the conditions listed in the Panel’s August Letter or the applicable continued listing requirements or standards of the Nasdaq
Capital Market, our Common Stock could be delisted from such exchange.
Our Common Stock is currently listed on Nasdaq.
In order to maintain that listing, we must satisfy minimum financial and other continued listing requirements and standards, including
those regarding director independence and independent committee requirements, minimum stockholders’ equity, minimum share price,
and certain corporate governance requirements. There can be no assurances that we will be able to remain in compliance with Nasdaq’s
listing standards or if we do later fail to comply and subsequently regain compliance with Nasdaq’s listing standards, that will
be able to continue to comply with the applicable listing standards. If we are unable to maintain compliance with these Nasdaq requirements,
our Common Stock will be delisted from Nasdaq.
On August 16, 2021, we received the August
Letter from The Nasdaq Stock Market LLC, stating that the Panel has determined to grant the Company’s request to remain listed
on Nasdaq, subject to the following conditions: (i) on or before August 19, 2021, the Company will have completed its planned private
investment in public equity transaction, (ii) on or before August 26, 2021, the Company will have filed with the SEC a registration statement
for the completion of a public offering, (iii) on or before September 15, 2021, the Company will have completed such public offering
pursuant to such registration statement, (iv) on or before October 15, 2021, the Company will hold its planned special meeting of its
stockholders to obtain approval to effect a reverse split of its Common Stock and Series C Preferred Stock, and (v) on or before November
1, 2021, the Company will have demonstrated compliance with Nasdaq Listing Rule 5550(a)(2). On August 16, 2021, the Company closed the
August Offering, which the Company believes resulted in compliance with the first condition listed in the August Letter described above.
On August 26, 2021, the Company filed a registration statement, of which this prospectus forms a part, in order to comply with the second
condition listed in the August Letter described above, and intends to complete this offering on or prior to September 15, 2021 in order
to comply with the third condition listed in the August Letter described above, which condition is subject to the SEC declaring such
registration statement effective prior to such date. The Company intends to hold its planned special meeting of its stockholders to effect
such reverse split in order to comply with the fourth condition listed in the August Letter described above, and has filed a preliminary
proxy statement with the SEC on July 23, 2021 regarding such special meeting. It is the Company’s intention that upon demonstrating
compliance with conditions (i)-(iv) listed in the August Letter, it will be able to demonstrate compliance with Nasdaq Listing Rule 5550(a)(2)
on or before November 1, 2021 to satisfy the fifth condition listed in the August Letter and described above.
We had previously received the Nasdaq Letter
from The Nasdaq Stock Market LLC, dated January 4, 2021, notifying us that we had, at that time, regained compliance with the Minimum
Bid Price Requirement, as a result of the closing bid price of our Common Stock having closed above $1.00 per share for at least ten
consecutive trading days prior to February 1, 2021, but remained subject to the Monitor Period until July 5, 2021. Subsequently, on June
18, 2021, we received the June Letter from The Nasdaq Stock Market LLC, stating that we 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 Letter to us, which advised us that our Common Stock was
subject to delisting from Nasdaq, but providing us an opportunity to appeal such delisting determination by requesting a hearing with
the Panel. We subsequently requested a hearing before the Panel to appeal the June Letter, which hearing was held on July 29, 2021 (the
“July Hearing”). Subsequently, we received the August Letter described above.
There can be no assurance that the Company will
be able to comply with all of the obligations placed on us by the Panel pursuant to the August Letter or The Nasdaq Stock Market LLC,
and, assuming that we are able to comply with such obligations, that we will be able to continue to comply with the listing standards
of The Nasdaq Stock Market LLC in the future, including the Minimum Bid Price Requirement. If we fail to meet all of the conditions listed
in the August Letter, our Common Stock will be delisted from Nasdaq. Additionally, assuming we are able to comply with all such obligations,
if we fail to comply with all applicable Nasdaq listing requirements now or in the future, our Common Stock may be subject to delisting
from Nasdaq. See – “Prospectus Summary – Recent Developments – Regaining Compliance with Nasdaq Listing Requirements.”
In the event that our Common Stock is delisted
from Nasdaq, as a result of our failure to comply with all of the obligations imposed on us in the August Letter, or due to our failure
to continue to comply with any other requirement for continued listing on Nasdaq, and is not eligible for quotation on another market
or exchange, trading of our Common Stock could be conducted in the over-the-counter market or on an electronic bulletin board established
for unlisted securities such as the Pink Sheets or the OTC Bulletin Board. In such event, it could become more difficult to dispose of,
or obtain accurate price quotations for, our Common Stock, and it would likely be more difficult to obtain coverage by securities analysts
and the news media, which could cause the price of our Common Stock to decline further. Also, it may be difficult for us to raise additional
capital if we are not listed on a national exchange. Additionally, in the event of such delisting, the holders of our Series F Preferred
Stock will have the right to request that the Company redeem such shares in cash, which could materially and adversely affect our business,
operating results and financial condition.
You will be unable to exercise the warrants
and they may have no value if we are unable to obtain stockholder approval to effect a reverse split or increase our number of authorized
shares of Common Stock.
We currently do not have sufficient number
of authorized shares available to permit exercise of the Warrants. Therefore, the Warrants will not be exercisable until we obtain stockholder
approval to effect a reverse stock split or an increase in our number of authorized shares of Common Stock or in an amount sufficient
to permit exercise in full of the Warrants. If we are unable to obtain such stockholder approval, the Warrants will have no value and
will expire. In no event may the Warrants be net cash settled, until they initially become exercisable. Our prior efforts to obtain stockholder
approval of an increase in the number of authorized shares of Common Stock were not successful. Certain investors in this offering whose
investment exceeds $100,000 will enter into a voting agreement whereby each such investor will agree to vote all shares of Common Stock
that they beneficially own on the closing date of this offering with respect to any proposals presented to the stockholders of the Company
at the Company’s next meeting of its stockholders, including the contemplated reverse split proposal. However, existing holders
of Common Stock may have an incentive to vote against the proposal for such a reverse stock split in order to prevent dilution in their
interests by the shares of Common Stock issuable upon exercise of the Warrants. Furthermore, in the event that the price of a share of
our Common Stock does not exceed the exercise price of the Warrants during their exercise period, the Warrants may not have any value.
We will have used all of our unreserved,
authorized shares.
As of September 10, 2021, we had 59,256,907 shares
of Common Stock outstanding, outstanding warrants exercisable for up to 16,044,798 shares of Common Stock, shares of Series F Preferred
Stock convertible into an aggregate of 1,863,728 shares of Common Stock (assuming the conversion of such shares of Series F Preferred
Stock at $0.54729 per share) and options granted to members of our Board exercisable for up to 408,584 shares of Common Stock. Included
in such 59,256,907 shares of Common Stock outstanding are 5,445,009 shares of Common Stock that were issued upon conversion of 993,333
shares of Series F Preferred Stock at the assumed Reset Conversion Price (as defined herein) and included in the 16,044,798 shares of
Common Stock underlying outstanding warrants are 6,666,665 shares of Common Stock reserved for issuance upon exercise of the warrants
issued in our August 2021 private placement in accordance with the terms of the agreements entered into in connection with such private
placement. Our Certificate of Incorporation authorizes the issuance of 100,000,000 shares of Common Stock. As a result, after giving
effect to the foregoing mentioned outstanding shares of Common Stock and shares reserved for issuance pursuant to warrants, shares of
Series F Preferred Stock and options held by our directors, we only have 22,425,984 shares of Common Stock available for issuance in
this offering. Our issuance of 22,462,562 shares of Common Stock in this offering (and up to an additional 3,369,384 shares of Common
Stock in the event of the full exercise of the underwriter’s over-allotment option described below, if such over-allotment option
is exercised fully in shares of Common Stock), would exceed the number of authorized shares of Common Stock we have available for issuance
by 3,405,963 shares of Common Stock. Therefore, in order for us to consummate this offering, we will need to receive approval of holders
of certain warrants to release at least 3,405,963 shares of Common Stock from shares of Common Stock reserved for issuance pursuant to
outstanding warrants prior to the closing of this offering. In addition, pursuant to the terms of the Series F Certificate of Designation,
the shares of Series F Preferred Stock are subject to reset provisions in the Series F Certificate of Designation that could result in
us being required to issue additional shares of Common Stock to the holders of Series F Preferred Stock. For purposes of determining
the number of shares of Common Stock that will no longer be subject to reservation and the number of shares issuable upon the 993,333
shares of Series F Preferred Stock that have been converted as of September 10, 2021 and the number of shares of Common Stock issuable
upon conversion of the remaining 340,000 shares of Series F Preferred Stock outstanding, a Reset Conversion Price of $0.54729 per share
has been assumed for the Conversion Price Reset Calculation Period, as only the average VWAPs for the four consecutive trading days after
the effective date of the Resale Registration Statement has been calculated as of the date of this prospectus. The actual Reset Conversion
Price for all five trading day of the Conversion Price Reset Calculation Period (which is subject to further adjustment pursuant to the
Series F Certificate of Designation upon the closing of this offering if the public offering price of the shares of Common Stock is lower
than the actual Reset Conversion Price on the date of such closing) has not been included in this prospectus, and the assumed Reset Conversion
Price is based on the assumption that the fifth day’s VWAP is consistent with the VWAPs of the four previous trading days.
In addition, assuming we are able to
consummate this offering and after having received approval from holders of certain of our warrants to release a sufficient number
of shares of Common Stock that are reserved for issuance upon exercise of outstanding warrants and/or shares of our Series F
Preferred Stock, we will have used all of our unreserved authorized shares of Common Stock and will need stockholder approval to
implement an increase in our authorized shares of Common Stock or a reverse split of our shares of Common Stock. Our Certificate of
Incorporation and the Delaware General Corporation Law (the “DGCL”), currently require the approval of stockholders
holding not less than a majority of all outstanding shares of capital stock entitled to vote in order to approve an increase in our
authorized shares of Common Stock or a reverse split of our shares of Common Stock. We intend to hold a special meeting of
stockholders, on or before October 15, 2021, to seek stockholder approval of a reverse split of our shares of Common Stock by a
ratio in the range of one-for-three to one-for-ten at the discretion of the Board. There are no assurances that stockholder approval
will be obtained, in which event we will be unable to, among other things, raise additional capital through the issuance of shares
of Common Stock to fund our future operations.
Under the terms of the Series F Certificate
of Designation, the number of shares of Common Stock issuable upon conversion of the shares of Series F Preferred Stock will not be determinable
until after the date on which the registration statement, of which this prospectus forms a part, is filed with the SEC, and may increase
further depending on the date of pricing of this offering; as a result, investors in this offering will have a limited period of time
after pricing in which to accurately determine how much dilution they will experience if they decide to participate in this offering.
Under the terms of the Series F Certificate of
Designation, the number of shares of Common Stock issuable upon conversion of the shares of Series F Preferred Stock will not be determinable
until after the date on which the registration statement, of which this prospectus forms a part, is filed with the SEC, and may increase
further depending on the public offering price of the shares of Common Stock offered in connection with this offering, determined at
pricing. As the actual Reset Conversion Price has not been calculated for all five trading days for the Conversion Price Reset Calculation
Period, the assumed Reset Conversion Price used in this prospectus is based on the assumption that the fifth day’s VWAP is consistent
with the VWAPs of the four previous trading days. If the fifth day’s VWAP is much lower than the four previous trading days, the
actual Reset Conversion Price could be materially lower than the assumed Reset Conversion Price used throughout this prospectus, which
would result in a substantial increase in the number of shares of Common Stock to such holders of Series F Preferred Stock upon conversion.
Further, the actual Reset Conversion Price is subject to further adjustment pursuant to the Series F Certificate of Designation upon
the pricing of this offering if the public offering price of the shares of Common Stock is lower than the actual Reset Conversion Price
on the date of such closing (subject to the Floor Price of $0.375 per share), which could result in the issuance of additional shares
of Common Stock in the event such holders convert their shares of Series F Preferred Stock. As a result, investors in this offering will
have a limited opportunity after the pricing of this offering to accurately assess how much they will be diluted in the event that they
decide to participate in this offering.
The market price for our Common Stock is
particularly volatile given our status as a relatively unknown company with a small and thinly traded public float, and lack of profits,
which could lead to wide fluctuations in our share price. You may be unable to sell your shares of Common Stock at or above the public
offering price of the Common Stock purchased in this offering, which may result in substantial losses to you.
The market for our Common Stock is characterized
by significant price volatility when compared to the shares of larger, more established companies that have large public floats, and
we expect that our share price will continue to be more volatile than the shares of such larger, more established companies for the indefinite
future. The volatility in our share price is attributable to a number of factors. First, as noted above, our Common Stock is, compared
to the shares of such larger, more established companies, sporadically and thinly traded. The price for our Common Stock could, for example,
decline precipitously in the event that a large number of our Common Stock is sold on the market without commensurate demand. Secondly,
we are a speculative or “risky” investment due to our lack of profits to date. As a consequence of this enhanced risk, more
risk-adverse investors may, under the fear of losing all or most of their investment in the event of negative news or lack of progress,
be more inclined to sell their shares of Common Stock on the market more quickly and at greater discounts than would be the case with
the stock of a larger, more established company that has a large public float. Many of these factors are beyond our control and may decrease
the market price of our Common Stock regardless of our operating performance.
Because of volatility in the stock market
in general, the market price of our Common Stock will also likely be volatile.
The stock market in general, and the market for
stocks of healthcare technology companies in particular, has been highly volatile. As a result, the market price of our Common Stock
is likely to be volatile, and investors in our Common Stock may experience a decrease, which could be substantial, in the value of their
shares of Common Stock or the loss of their entire investment for a number of reasons, including reasons unrelated to our operating performance
or prospects. The market price of our Common Stock could be subject to wide fluctuations in response to a broad and diverse range of
factors, including those described elsewhere in this “Risk Factors” section and this prospectus and the following:
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recent price volatility and any
known risks of investing in our Common Stock under these circumstances;
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the market price of our Common Stock
prior to the recent price volatility;
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any recent change in financial condition
or results of operations, such as in earnings, revenues or other measure of company value
that is consistent with the recent change in the prices of our Common Stock; and
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risk
factors addressing the recent extreme volatility in stock price, the effects of a potential
“short squeeze” due to a sudden increase in demand for our Common Stock as a result
of current investor exuberance associated with technology-related stocks, the impact that
this offering could have on the price of our Common Stock and on investors where there is
a significant number of shares of Common Stock being offered relative to the number of shares
of our Common Stock currently outstanding and, to the extent that the Company expects to
conduct additional offerings in the future to fund its operations or provide liquidity, the
dilutive impact of those offerings on investors that purchase such shares in the offering
at a significantly higher price.
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Substantial future sales of shares of our Common Stock could
cause the market price of our Common Stock to decline.
We expect that significant additional capital
will be needed in the near future to continue our planned operations. Sales of a substantial number of shares of our Common Stock in
the public market following the completion of this offering, or the perception that these sales might occur, could depress the market
price of our Common Stock and could impair our ability to raise capital through the sale of additional equity securities. We are unable
to predict the effect that such sales may have on the prevailing market price of our Common Stock.
Moreover, after this offering, holders of our
securities or their transferees, may be entitled to specified rights with respect to the registration of the offer and sale of their
shares of Common Stock underlying such securities under the Securities Act. Registration of the offer and sale of such shares of Common
Stock under the Securities Act would result in such shares becoming freely tradable without restriction under the Securities Act immediately
upon the effectiveness of the registration.
A large number of shares of Common Stock
may be sold in the market following this offering and as a result of the SEC declaring effective the Resale Registration Statement on
September 3, 2021, which may significantly depress the market price of our Common Stock.
The shares of Common Stock and Warrants sold
in the offering will be freely tradable without restriction or further registration under the Securities Act. Additionally, the Company
has registered for resale additional shares of Common Stock on the Resale Registration Statement, which consists of shares of Common
Stock and convertible and exercisable securities issued in connection with private placement offerings that closed in December 2020,
February 2021 and August 2021. The number of shares of Common Stock included on such registration statement consist of an aggregate of
10,666,664 shares of Common Stock issuable upon conversion of the outstanding Series F Preferred Stock, assuming the Conversion Price
of such shares equals the Floor Price. On September 3, 2021, the SEC declared the Resale Registration Statement effective, and holders
of an aggregate of 993,333 shares of Series F Preferred Stock have converted such shares into shares of Common Stock. An aggregate of
5,445,009 shares of Common Stock have been issued to such holders, assuming a Reset Conversion Price equal to $0.54729 per share, leaving
an aggregate of 340,000 shares of Series F Preferred Stock outstanding upon such conversions. Further, such Reset Conversion Price may
decrease further depending on the price of the Common Stock on the date on which the closing of this offering occurs, which could result
in the issuance of more shares of Common Stock than would have been issuable prior to the Resale Registration Statement being declared
effective and prior to this offering, in the event that the holders of the Series F Preferred Stock opt to convert such remaining outstanding
shares. Prospectus Summary – Recent Developments – Closing of August Offering and Designation of Series F Preferred Stock”.
As a result, a substantial number of shares of our Common Stock may be sold in the public market following this offering and as a result
of the SEC declaring the Resale Registration Statement effective. If there are significantly more shares of Common Stock offered for
sale than buyers are willing to purchase, then the market price of our Common Stock may decline to a market price at which buyers are
willing to purchase the offered shares of Common Stock and sellers remain willing to sell our shares of Common Stock.
We may seek
to raise additional funds, finance acquisitions or develop strategic relationships by issuing securities that would dilute the ownership
of the Common Stock. Depending on the terms available to us, if these activities result in significant dilution, it may negatively impact
the trading price of our shares of Common Stock.
We have financed our operations, and we expect
to continue to finance our operations, acquisitions, if any, and the development of strategic relationships by issuing equity and/or
convertible securities, which could significantly reduce the percentage ownership of our existing stockholders. Further, any additional
financing that we secure may require the granting of rights, preferences or privileges senior to, or pari passu with, those of our Common
Stock. Additionally, we may acquire other technologies or finance strategic alliances by issuing our equity or equity-linked securities,
which may result in additional dilution. Any issuances by us of equity securities may be at or below the prevailing market price of our
Common Stock and in any event may have a dilutive impact on your ownership interest, which could cause the market price of our Common
Stock to decline. We may also raise additional funds through the incurrence of debt or the issuance or sale of other securities or instruments
senior to our shares of Common Stock. The holders of any securities or instruments we may issue may have rights superior to the rights
of our common stockholders. If we experience dilution from issuance of additional securities and we grant superior rights to new securities
over such stockholders, it may negatively impact the trading price of our shares of Common Stock.
You may experience immediate and substantial
dilution in the book value per share of the securities that you purchase in this offering.
The assumed combined offering price per share
and accompanying Warrant is substantially higher than the net tangible book value per share of our Common Stock. Therefore, if you purchase
shares of Common Stock and Warrants in this offering at such assumed price, you will pay an effective price per share of Common Stock
that you acquire that substantially exceeds our net tangible book value per share after this offering. Assuming a combined public offering
price of $0.601 per share and accompanying Warrant, you will experience immediate dilution of approximately $0.45 per share, representing
the difference between our pro forma as adjusted net tangible book value per share after giving effect to this offering and the assumed
combined offering price per share and accompanying Warrant. In addition, if previously issued warrants, options and shares of our preferred
stock are exercised for or converted into Common Stock at prices below the assumed combined offering price of our shares of Common Stock
and accompanying Warrants, or the Warrants being offered in this offering are accounted for as liabilities, you will experience further
dilution. See “Dilution” for a more detailed discussion of the dilution you may incur in connection with this offering. In
addition, there is no guarantee that the combined offering price per share and accompanying Warrant post-offering will not decrease due
to market conditions. The actual combined offering price per share and accompanying Warrant may be at, above or below such assumed combined
offering price and will be determined at pricing based on, among other factors, the closing bid price of the Common Stock on the effective
date of the registration statement of which this prospectus forms a part. See “Underwriting — Determination of Offering Price”
for additional information.
We
could issue “blank check” preferred stock without stockholder approval with the effect of diluting then current stockholder
interests and impairing their voting rights; and provisions in our charter documents could discourage a takeover that stockholders may
consider favorable.
Our Certificate of Incorporation authorizes
the issuance of up to 10,000,000 shares of “blank check” preferred stock with designations, rights and preferences as may
be determined from time to time by our Board. Our Board is empowered, without stockholder approval, to issue a series of preferred stock
with dividend, liquidation, conversion, voting or other rights which could dilute the interest of, or impair the voting power of, our
common stockholders. The issuance of a series of preferred stock could be used as a method of discouraging, delaying or preventing a
change in control of the Company. For example, it would be possible for our Board to issue preferred stock with voting or other rights
or preferences that could impede the success of any attempt to change control of the Company. The Series C Preferred Stock currently
ranks senior to the Common Stock and our Series F Preferred Stock and any class or series of capital stock created after the Series C
Preferred Stock and has a special preference upon the liquidation of the Company. The Series F Preferred Stock currently ranks senior
to the Common Stock and any class or series of capital stock created after the Series F Preferred Stock and has a special preference
upon the liquidation of the Company. For further information regarding our shares of (i) Series C Preferred Stock, please refer to the
Certificate of Designation filed as an exhibit to, and the disclosure contained in, the Series C Certificate of Designations filed as
an exhibit to, and the disclosure contained in, our Current Report on Form 8-K filed with the SEC on May 30, 2017 and (ii) Series F Preferred
Stock, please refer to the Form of Series F Certificate of Designation filed as an exhibit to, and the disclosure contained in, our Current
Report on Form 8-K filed with the SEC on August 17, 2021.
If and when a larger trading market for
our Common Stock develops, the market price of our Common Stock is still likely to be highly volatile and subject to wide fluctuations,
and you may be unable to resell your shares of Common Stock at or above the public offering price of the shares of Common Stock in this
offering.
The market price of our Common Stock may be highly
volatile and could be subject to wide fluctuations in response to a number of factors that are beyond our control, including, but not
limited to:
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variations in our revenues and operating expenses;
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actual or anticipated changes in the estimates of our operating results
or changes in stock market analyst recommendations regarding our Common Stock, other comparable companies or our industry generally;
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market conditions in our industry, the industries of our customers
and the economy as a whole;
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actual or expected changes in our growth rates or our competitors’
growth rates;
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developments in the financial markets and worldwide or regional economies;
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announcements of innovations or new products or services by us or our
competitors;
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announcements by the government relating to regulations that govern
our industry;
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sales of our Common Stock or other securities by us or in the open
market;
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changes in the market valuations of other comparable companies; and
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other events or factors, many of which are beyond our control, including
those resulting from such events, or the prospect of such events, including war, terrorism and other international conflicts, public
health issues including health epidemics or pandemics, such as the recent outbreak of COVID-19, and natural disasters such as fire,
hurricanes, earthquakes, tornados or other adverse weather and climate conditions, whether occurring in the United States or elsewhere,
could disrupt our operations, disrupt the operations of our suppliers or result in political or economic instability.
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In addition, if the market for technology stocks
or the stock market in general experiences loss of investor confidence, the trading price of our Common Stock could decline for reasons
unrelated to our business, financial condition or operating results. The trading price of our Common Stock might also decline in reaction
to events that affect other companies in our industry, even if these events do not directly affect us. Each of these factors, among others,
could harm the value of your investment in our Common Stock. In the past, following periods of volatility in the market, securities class-action
litigation has often been instituted against companies. Such litigation, if instituted against us, could result in substantial costs
and diversion of management’s attention and resources, which could materially and adversely affect our business, operating results
and financial condition.
We may acquire other technologies or finance
strategic alliances by issuing our equity or equity-linked securities, which may result in additional dilution to our stockholders.
We have not, and neither the underwriter
nor the financial advisor that we have engaged in connection with this offering have, authorized any other party to provide you with
information concerning us or this offering.
You should carefully evaluate all of the information
in this prospectus and the registration statement of which this prospectus forms a part, including the documents incorporated by reference
herein. We may receive media coverage regarding our Company, including coverage that is not directly attributable to statements made
by our officers, that incorrectly reports on statements made by our officers or employees, or that is misleading as a result of omitting
information provided by us, our officers or employees. We have not, and neither the underwriter nor the financial advisor that we have
engaged in connection with this offering have, authorized any other party to provide you with information concerning us or this offering,
and such recipients should not rely on this information.
If securities or industry analysts do not
publish research or reports about our business, or publish negative reports about our business, our share price and trading volume could
decline.
The trading market for our Common Stock may depend
in part on the research and reports that securities or industry analysts may publish about us or our business, our market and our competitors.
We do not have any control over such analysts. If one or more such analysts downgrade or publish a negative opinion of our Common Stock,
our share price would likely decline. If analysts do not cover our Company or do not regularly publish reports on us, we may not be able
to attain visibility in the financial markets, which could have a negative impact on our share price or trading volume.
We do not anticipate paying dividends
in the foreseeable future; you should not invest in our shares of Common Stock if you expect dividends.
The payment of dividends on our Common Stock
will depend on earnings, financial condition and other business and economic factors affecting us at such time as our Board may consider
relevant. If we do not pay dividends, our shares of Common Stock may be less valuable because a return on your investment
will only occur if our stock price appreciates.
Additionally, the holder of our shares of Series
C Preferred Stock are entitled to receive dividends pursuant to the Series C Certificate of Designations and the holders of our shares
of Series F Preferred Stock are entitled to receive dividends pursuant to the Series F Certificate of Designations. The Series C Certificate
of Designations requires us to pay cash dividends on our Series C Preferred Stock on a quarterly and cumulative basis at a rate of five
percent (5%) per annum commencing on the date of issuance of such shares, which rate increases to fifteen percent (15%) per annum in
the event that the Company’s market capitalization is $50 million or greater for thirty consecutive days. Since inception and to
date, we have declared and paid an aggregate of approximately $660,921 in dividends on our shares of Series C Preferred Stock. See also
“Prospectus Summary – Recent Developments – Settlement Agreement with GDMSAI”. The Series F Certificate of Designation
requires us to pay dividends on our Series F Preferred Stock at a rate of ten percent (10%) per annum commencing on the date of issuance
of such shares, which are payable until the earlier of the date on which such shares are converted or twelve months from such date of
issuance. To date, we have not declared or paid dividends on our shares of Series F Preferred Stock, but we expect to declare and pay
dividends on such shares as required by the Series F Certificate of Designation.
Subject to the payment of dividends on our shares
of Series C Preferred Stock and Series F Preferred Stock, we currently intend to retain our future earnings to support operations and
to finance expansion and, therefore, we do not anticipate paying any cash dividends on our capital stock in the foreseeable future.
Financial Industry Regulatory Authority,
Inc. (“FINRA”) sales practice requirements may limit a stockholder’s ability to buy and sell our shares Common Stock.
FINRA has adopted rules that require that in
recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable
for that customer. Prior to recommending speculative low-priced securities to their non-institutional customers, broker-dealers must
make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other
information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low-priced securities
will not be suitable for certain customers. FINRA requirements will likely make it more difficult for broker-dealers to recommend that
their customers buy our shares of Common Stock, which may have the effect of reducing the level of trading activity in our common stock.
As a result, fewer broker-dealers may be willing to make a market in our Common Stock, reducing a stockholder’s ability to resell
shares of our Common Stock.
We have broad discretion in the use of
the net proceeds from this offering and may not use them effectively.
Our management will have broad discretion in
the application of the net proceeds from this offering, including for any of the purposes described in the section of this prospectus
entitled “Use of Proceeds.” The failure by our management to apply these funds effectively could harm our business.
There is no public market for the Warrants.
There is no established public trading market
for the Warrants offered hereby, and we do not expect a market to develop. In addition, we do not intend to apply to list the Warrants
on any national securities exchange or other nationally recognized trading system, including Nasdaq. Without an active market, the liquidity
of the Warrants will be limited.
The Warrants in this offering are speculative
in nature.
Following this offering, the market value
of the Warrants, if any, is uncertain and there can be no assurance that the market value of the Warrants will equal or exceed their
imputed public offering price. In the event that our Common Stock price does not exceed the exercise price of the Warrants during the
period when such Warrants are exercisable, such Warrants may not have any value. Furthermore, each Warrant will expire five years from
its initial exercise date. See also “Risk Factors – You will be unable to exercise the warrants and they may have no value
under certain circumstances”.
Holders of the Warrants will not have rights
of holders of our shares of Common Stock until such Warrants are exercised.
The Warrants in this offering do not confer
any rights of share ownership on their holders, but rather merely represent the right to acquire shares of our Common Stock at a fixed
price. Until holders of Warrants acquire shares of our Common Stock upon exercise of the Warrants, holders of Warrants will have no rights
with respect to our shares of Common Stock underlying such Warrants. See also “Risk Factors – You will be unable to exercise
the warrants and they may have no value under certain circumstances”.
Risks Relating to our Business
We are uncertain of our ability to generate
sufficient revenue and profitability in the future.
We continue to develop and refine our business
model, but we can provide no assurance that we will be able to generate a sufficient amount of revenue, from our business in order to
achieve profitability. It is not possible for us to predict at this time the potential success of our business. The revenue and
income potential of our proposed business and operations are currently unknown. If we cannot continue as a viable entity, you may lose
some or all of your investment in our Company.
We
incurred a net loss from operations of $994,562 for the six months ended June 30, 2021 ($211,672
for the quarter then ended). As of June 30, 2021, we had cash and stockholders’ equity
of $3,242,925 and $17,359,830, respectively. At June 30, 2021, the Company had a working
capital deficiency of $1,230,275. We cannot provide any assurance that we will be able to
raise additional cash from equity financings, secure debt financing, and/or generate revenue
from the sales of our products. If we are unable to secure additional capital, we may be
required to curtail our research and development initiatives and take additional measures
to reduce costs in order to conserve our cash in amounts sufficient to sustain operations
and meet our obligations.
Our business, financial condition and results
of operations may be adversely affected by the recent coronavirus outbreak or other similar epidemics or adverse public health developments
The pandemic resulting from COVID-19 has caused
many governments to implement quarantines and significant restrictions on travel, and to advise that people remain at home where possible
and avoid crowds. This has led to many businesses shutting down or limiting operations as well as greater uncertainty in financial markets.
To date, an economic downturn and other adverse impacts resulting from COVID-19 have resulted in our distributors and/or the VA significantly
reducing orders for our products. Continuing effects of COVID-19, or other similar epidemics or adverse public health developments, may
in all likelihood, extend these reduced product orders and continue the inability of our distributors and/or the VA to pay us for orders,
for an undeterminable period of time. Delays and disruptions, such as difficulty obtaining components and temporary suspension of operations,
have resulted in our existing inventory levels not being sufficient, and our business, financial condition and results of operations
have been materially and adversely affected, as a result of a slowdown and suspension in our business. In the event that this slowdown
and/or suspension carries on for a long period of time, this will, in all likelihood, continue to have a material adverse impact on our
business. As a result of the current or future epidemics, we have been and may also continue to be impacted by shutdowns, employee impacts
from illness and other community response measures meant to prevent spread of the virus, all of which has and may continue to negatively
impact our business, financial condition and results of operations. Further, if we are regularly unable to meet our obligations to deliver
our products to distributors and/or the VA, they may decide to terminate or reduce their distribution arrangements with us and our business
could be adversely affected. As a result of prolonged effects of the COVID-19 pandemic, we may be forced to write-down or write-off assets,
restructure our operations, or incur impairment or other charges that could result in losses. Even though these charges may be non-cash
items and may not have an immediate impact on our liquidity, the fact that we report charges of this nature could contribute to negative
market perceptions about us or our securities. Accordingly, our securityholders could suffer a reduction in the value of our securities
that they hold if the trading price of our Common Stock is adversely impacted due to such market perceptions. The extent to which COVID-19
will continue to impact our results will depend on future developments, which are highly uncertain and will include emerging information
concerning the severity of COVID-19 and the actions taken by governments and private businesses to attempt to contain the virus. See “Prospectus
Summary – Company Overview – COVID-19 Pandemic” for current information on the effects of the COVID-19
pandemic on our business.
Our business, financial condition and results
of operations may be adversely affected if we are unsuccessful in our current litigation with certain stockholders of Fit Pay.
On February 24, 2020, the Shareholder Representative
and the Fit Pay Shareholders filed a lawsuit in the United States District Court for the Southern District of New York against the Company,
CrowdOut and Garmin International, Inc. See Orlando v. Nxt-ID, Inc. No. 20-cv-1604 (S.D.N.Y.). The Complaint alleges that the Company
has breached certain contractual obligations under a merger agreement, dated May 23, 2017, between Fit Pay and the Company, regarding
certain future, contingent earnout payments allegedly that could be owed to the Fit Pay Shareholders from future revenues. The Complaint
seeks unspecified monetary damages from the defendants. While we believe that these claims are without merit and we plan to vigorously
defend the action, there is no assurance that we will be successful in such defense. On May 12, 2020, the Company filed an answer
and counterclaims alleging, among other things, fraud and breach of fiduciary duty of the Shareholder Representative as well as arguing
that the Shareholder Representative should be estopped from pursuing these claims. The Company has moved for summary judgment to have
the lawsuit dismissed. In March 2021, following our successful application to stay all discovery, the court granted CrowdOut and Garmin’s
separate motions to dismiss. Orlando’s claim against the Company still remains and the Company’s motion for summary judgement
is still pending.
In the event that we are unsuccessful in the
defense of this lawsuit, we could be required to pay the Fit Pay Shareholders substantial damages which would, in all likelihood, have
a material adverse effect on our business, financial condition and results of operations.
If we were to fail to comply with the payment
obligations pursuant to, or otherwise default on our obligations under, the Settlement Agreement that we entered into with GDMSAI, our
business, operating results and financial condition would be adversely affected.
Effective August 11, 2021, we and GDMSAI entered
into the Settlement Agreement in order to settle the ongoing Dispute with regard to the payment of dividends under the Series C Certificate
of Designations. Pursuant to the Settlement Agreement, we have agreed to pay GDMSAI a cash payment of $750,000 in full satisfaction of
the amounts that GDMSAI asserted it is owed for past dividend payments under the Series C Certificate of Designations, $250,000 to have
been paid within two business days after the effective date of the Settlement Agreement, and the remainder of which shall be paid to
GDMSAI in monthly installments ending on November 30, 2021, with such payment obligations to be guaranteed by the Company’s wholly-owned
subsidiary, LogicMark, subject to the senior obligations to the Company’s senior lender, CrowdOut. However, in the event that we
fail to repay GDMSAI pursuant to the terms of the Settlement Agreement, all remaining payments due under the Settlement Agreement will
be due within seven (7) days of the date on which such payment was not made, plus a penalty payment of 10% of such remaining balance
due. Additionally, in the event of such failure to repay or other material breach, we have agreed to repay all of GDMSAI’s legal
expenses in enforcing such repayment obligations upon such breach. Any such material breach and resulting repayment obligations could
have a material adverse effect on our business, financial condition and results of operations.
If we are required to redeem the shares
of Series F Preferred Stock pursuant to the Series F Certificate of Designation, our business, operating results and financial condition
would be adversely affected.
On August 16, 2021, we filed the Series F
Certificate of Designation with the Secretary of State of Delaware in connection with the August Offering and our issuance of an aggregate
of 1,333,333 shares of our Series F Preferred Stock to the August Investors. A portion of such shares of Series F Preferred Stock may
be converted into shares of Common Stock prior to the closing of this offering. Pursuant to the Series F Certificate of Designation,
in the event that the Common Stock is delisted from Nasdaq, the August Investors will have a right to request that the Company redeem
their shares of Series F Preferred Stock in cash. In the event that we are required to redeem such shares of Series F Preferred Stock,
this could have a material adverse effect on our business, financial condition and results of operations.
We are presently a small company with too
limited resources and personnel to establish a comprehensive system of internal controls. If we fail to maintain an effective system
of internal controls, we would not be able to accurately report our financial results on a timely basis or prevent fraud. As a result,
current and potential stockholders could lose confidence in our financial reporting, which would harm our business
and the trading price of our Common Stock.
Effective internal controls are necessary for
us to provide reliable financial reports and effectively prevent fraud. If we cannot provide reliable financial reports or prevent fraud,
our brand and operating results would be harmed. We may in the future discover areas of our internal controls that need improvement.
For example, because of size and limited resources, our external auditors may determine that we lack the personnel and infrastructure
necessary to properly carry out an independent audit function. Although we believe that we have adequate internal controls for a
company with our size and resources, we are not certain that the measures that we have in place will ensure that we implement and maintain
adequate controls over our financial processes and reporting in the future. Any failure to implement required new or improved controls,
or difficulties encountered in their implementation, would harm our operating results or cause us to fail to meet our reporting obligations.
Inferior internal controls would also cause investors to lose confidence in our reported financial information, which would have a negative
effect on our company and the trading price of our Common Stock.
Our management is responsible for establishing
and maintaining adequate internal control over financial reporting. Internal control over financial reporting is a process designed to
provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance
with U.S. generally accepted accounting principles. A material weakness is a deficiency, or a combination of deficiencies, in internal
control over financial reporting, such that there is a reasonable possibility that a material misstatement of annual or interim financial
statements will not be prevented or detected on a timely basis.
As of December 31, 2020, we have identified certain
matters that constituted material weaknesses in our internal controls over financial reporting. As a result, current and potential stockholders
could lose confidence in our financial reporting, which would harm our business and the trading price of our Common Stock. As of June
30, 2021, our management concluded that such material weaknesses in our internal controls over financial reporting continue to exist.
SPECIAL NOTE REGARDING
FORWARD-LOOKING STATEMENTS
This prospectus and the sections entitled
“Risk Factors”, “Management’s Discussion and Analysis of Financial Condition and Results of Operations”
and “Business” included in this prospectus and in our other filings with the SEC incorporated by reference to the registration
statement of which this prospectus forms a part, contains forward-looking statements within the meaning of Section 21(E) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), and Section 27A of the Securities Act. These forward-looking statements
include, without limitation: statements regarding proposed new products or services; statements concerning litigation or other matters;
statements concerning projections, predictions, expectations, estimates or forecasts for our business, financial and operating results
and future economic performance; statements of our management’s goals and objectives; statements concerning our competitive environment,
availability of resources and regulation; trends affecting our financial condition, results of operations or future prospects; our financing
plans or growth strategies; and other similar expressions concerning matters that are not historical facts. Words such as “may”,
“will”, “should”, “could”, “would”, “predicts”, “potential”,
“continue”, “expects”, “anticipates”, “future”, “intends”, “plans”,
“believes” and “estimates,” and variations of such terms or similar expressions, are intended to identify such
forward-looking statements.
Forward-looking statements should not be read
as a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by which, that performance
or those results will be achieved. Forward-looking statements are based on information available at the time they are made and/or our
management’s good faith belief as of that time with respect to future events and are subject to risks and uncertainties that could
cause actual performance or results to differ materially from what is expressed in or suggested by the forward-looking statements.
Forward-looking statements speak only as of the
date they are made. You should not put undue reliance on any forward-looking statements. We assume no obligation to update forward-looking
statements to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information, except
to the extent required by applicable securities laws. If we do update one or more forward-looking statements, no inference should be
drawn that we will make additional updates with respect to those or other forward-looking statements. You should review our subsequent
reports filed with the SEC described in the sections of this prospectus entitled “Where You Can Find More Information” and
“Incorporation of Documents by Reference,” all of which are accessible on the SEC’s website at www.sec.gov.
INDUSTRY AND MARKET DATA
Unless otherwise indicated, information contained
in this prospectus concerning our industry and the market in which we operate, including our market position, market opportunity and
market size, is based on information from various sources, on assumptions that we have made based on such data and other similar sources
and on our knowledge of the markets for our products. These data sources involve a number of assumptions and limitations, and you are
cautioned not to give undue weight to such estimates. In addition, all of the information in this prospectus concerning our industry
and the market in which we operate, including our market position, market opportunity, size and growth, does not take into account the
effects that COVID-19 has had on such industry and market.
We have not independently verified any third-party
information. While we believe the market position, market opportunity and market size information included in this prospectus is generally
reliable, such information is inherently imprecise. In addition, projections, assumptions and estimates of our future performance and
the future performance of the industry in which we operate is necessarily subject to a high degree of uncertainty and risk due to a variety
of factors, including those described in the section titled “Risk Factors” and elsewhere in this prospectus. These and other
factors could cause results to differ materially from those expressed in the estimates made by the independent parties and by us.
USE OF PROCEEDS
We estimate that the net proceeds to us from
the sale of the securities offered by this prospectus in this offering will be $12,265,114 ($14,117,029 if the underwriters exercise
their over-allotment option in full solely for shares of Common Stock and $12,296,449 if the underwriters exercise their over-allotment
option in full solely for Warrants), based on an assumed combined public offering price of $0.601 per share and accompanying Warrant,
excluding any exercise of the Warrants, and after deducting commissions and estimated offering expenses payable by us. We will only receive
additional proceeds from the exercise of the Warrants issuable in this offering if the Warrants are exercised at their assumed exercise
price of $0.6611 per share of Common Stock and the holders of such Warrants pay the exercise price of such Warrants in cash.
As of the date of this prospectus, we cannot
predict with certainty all the uses for the net proceeds to be received upon the completion of this offering. We currently intend to
use the net proceeds from this offering for new product development, working capital and liability reduction purposes. We may also use
a portion of the net proceeds for the acquisitions of businesses, products, technologies or licenses that are complementary to our business,
although we have no present commitments or agreements to do so. We have not allocated specific amounts of net proceeds for any of these
purposes.
Each $1.00 increase in the assumed combined
public offering price of $0.601 per share and accompanying Warrant, would increase the net proceeds to us from this offering by approximately
$20.9 million, assuming the number of shares of Common Stock and Warrants offered by us, as set forth on the cover of this prospectus,
remains the same and after deducting underwriting discounts and commissions and estimated offering expenses payable by us and assuming
no exercise of the Warrants and the underwriter’s over-allotment option. We may also increase or decrease the number of shares
of Common Stock and Warrants that we are offering. An increase (decrease) of 1,000,000 shares of Common Stock and Warrants offered by
us would increase (decrease) the net proceeds to us from this offering by approximately $0.6 million, after deducting underwriting
discounts and commissions and estimated offering expenses payable by us and assuming no exercise of the underwriter’s over-allotment
option and that the combined public offering price of such shares of Common Stock and accompanying Warrants remains as set forth on the
cover page of this prospectus remains the same. The as adjusted information discussed above is illustrative only and will adjust based
on the actual combined public offering price and other terms of this offering determined at pricing.
The allocation of the net proceeds of the offering
set forth above is based upon our current plans and assumptions regarding industry and general economic conditions, our future revenues
and expenditures. The amounts and timing of our actual expenditures may vary significantly and will depend on numerous factors, including
market conditions, cash generated or used by our operations, business developments and opportunities that may arise and related rate
of growth. We may find it necessary or advisable to use portions of the proceeds from this offering for other purposes.
Circumstances that may give rise to a change
in the use of proceeds and the alternate purposes for which the proceeds may be used include:
|
●
|
the existence of other opportunities or the need to take advantage
of changes in timing of our existing activities;
|
|
|
|
|
●
|
the need or desire on our part to accelerate, increase or eliminate
existing initiatives due to, among other things, changing market conditions and competitive developments; and/or
|
|
|
|
|
●
|
if strategic opportunities present themselves (including acquisitions,
joint ventures, licensing and other similar transactions).
|
From time to time, we evaluate these factors
and other factors and we anticipate continuing to make such evaluations to determine if the existing allocation of resources, including
the proceeds of this offering, is being optimized.
We believe that the net proceeds of this offering,
together with the net proceeds from the August Offering and cash on hand, will be sufficient to fund our operations through the balance
of 2021 and for the foreseeable future. Should we find it necessary to raise additional funding, additional capital may not be available
on terms favorable to us, or at all. If we raise additional funds by issuing equity securities, our stockholders may experience dilution.
Debt financing, if available, may involve restrictive covenants or additional security interests in our assets. Any additional debt or
equity financing that we complete may contain terms that are not favorable to us or our stockholders. If we raise additional funds through
collaboration and licensing arrangements with third parties, it may be necessary to relinquish some rights to our technologies or products
or grant licenses on terms that are not favorable to us. If we are unable to raise adequate funds, we may have to delay, reduce the scope
of, or eliminate some or all of, our development programs or liquidate some or all of our assets.
DIVIDEND POLICY
We have never declared or paid any dividends
on our Common Stock. We currently intend to retain all available funds and any future earnings for the operation and expansion of our
business and, therefore, we do not anticipate declaring or paying dividends in the foreseeable future.
Additionally, the holder of our shares of Series
C Preferred Stock are entitled to receive dividends pursuant to the Series C Certificate of Designations and the holders of our shares
of Series F Preferred Stock are entitled to receive dividends pursuant to the Series F Certificate of Designations. The Series C Certificate
of Designations requires us to pay cash dividends on our Series C Preferred Stock on a quarterly and cumulative basis at a rate of five
percent (5%) per annum commencing on the date of issuance of such shares, which rate increases to fifteen percent (15%) per annum in
the event that the Company’s market capitalization is $50 million or greater for thirty consecutive days. Since inception and to
date, we have declared and paid an aggregate of approximately $660,921 in dividends on our shares of Series C Preferred Stock. See also
“Prospectus Summary – Recent Developments – Settlement Agreement with GDMSAI”. The Series F Certificate of Designation
requires us to pay dividends on our Series F Preferred Stock at a rate of ten percent (10%) per annum commencing on the date of issuance
of such shares, which are payable until the earlier of the date on which such shares are converted or twelve months from such date of
issuance. To date, we have not declared or paid dividends on our shares of Series F Preferred Stock, but we expect to declare and pay
dividends on such shares as required by the Series F Certificate of Designation.
The payment of dividends on our Common Stock
will be at the discretion of our Board, are subject to the terms of the Series C Certificate of Designations and the Series F Certificate
of Designation and the dividend payments made to holders of our shares of Series C Preferred Stock and Series F Preferred Stock, and
will depend on our results of operations, capital requirements, financial condition, prospects, contractual arrangements, any limitations
on payment of dividends present in our future debt agreements, and other factors that our Board may deem relevant.
CAPITALIZATION
The following table sets forth our actual cash
and cash equivalents and our capitalization as of June 30, 2021:
|
●
|
on an actual basis;
|
|
|
|
|
●
|
on a pro forma basis
to give effect to the (i) the receipt of funds from the issuance and sale of the following securities, pursuant to a private placement
offering that we closed on August 16, 2021: (x) an aggregate of 1,333,333 shares of our Series F Preferred Stock and (y) August Warrants
to purchase up to an aggregate of 6,666,665 shares of Common Stock at an exercise price of $0.78 per share; (ii) the cash payment
of $250,000 to GDMSAI pursuant to the Settlement Agreement; (iii) the $1,064,627 voluntary prepayment on our term loan to CrowdOut;
(iv) the issuance of 500,000 shares of Common Stock to Mr. Miceli in September 2021; and (v) the conversion of 993,333 shares of
Series F Preferred Stock into 5,445,008 shares of Common Stock, assuming a Reset Conversion Price of $0.54729 per share; and
|
|
|
|
|
●
|
on a pro forma as adjusted
basis to give further effect to the issuance and sale of (i) 22,462,562 shares of our Common Stock and accompanying Warrants to purchase
up to 22,462,562 shares of our Common Stock at a combined assumed public offering price of $0.601 per share and accompanying
Warrant, after deducting commissions and estimated offering expenses payable by us.
|
You should read this information in conjunction
with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our condensed consolidated
financial statements and related notes appearing in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2021 and our Annual
Report on Form 10-K for the fiscal year ended December 31, 2020, which are incorporated by reference in this prospectus. The information
below has also been provided on an as adjusted basis to give further effect to this current offering.
|
|
As of June 30, 2021
|
|
|
|
Actual
(unaudited)
|
|
|
Pro Forma
|
|
|
Pro Forma
As Adjusted
(unaudited)
|
|
Cash and cash equivalents
|
|
$
|
3,242,925
|
|
|
$
|
5,727,414
|
|
|
$
|
17,992,528
|
|
Borrowings
|
|
|
1,064,627
|
|
|
|
-
|
|
|
|
-
|
|
Series C Preferred Stock, par value $0.0001 per share: 2,000 shares designated,
issued and outstanding – actual, pro forma and pro forma as adjusted, respectively
|
|
|
1,807,300
|
|
|
|
1,807,300
|
|
|
|
1,807,300
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ Equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock, par value $0.0001 per share: 10,000,000 shares authorized:
|
|
|
|
|
|
|
|
|
|
|
|
|
Series A Preferred Stock, par value $0.0001 per share: 0
shares designated, issued and outstanding – actual, pro forma and pro forma as adjusted, respectively
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Series B Preferred Stock, par value $0.0001 per share: 0
shares designated, issued and outstanding – actual, pro forma and pro forma as adjusted, respectively
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Series D Preferred Stock, par value $0.0001 per share: 0
shares designated, issued and outstanding – actual, pro forma and pro forma as adjusted, respectively
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Series E Preferred Stock, par value $0.0001 per share: 0
shares designated, issued and outstanding – actual, pro forma and pro forma as adjusted, respectively
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Series F Preferred Stock, par value $0.0001 per share: 1,333,333
shares designated and 0 shares, 340,000 shares and 340,000 shares issued and outstanding – actual, pro forma and pro forma
as adjusted, respectively
|
|
|
-
|
|
|
|
1,020,000
|
|
|
|
1,020,000
|
|
Common Stock, par value $0.0001 per share: 100,000,000 shares
authorized and 53,311,898 shares, 59,256,907 and 81,719,469 shares of Common Stock issued and outstanding – actual, pro forma
and pro forma as adjusted
|
|
|
5,331
|
|
|
|
5,926
|
|
|
|
8,172
|
|
Additional paid-in capital
|
|
|
89,041,202
|
|
|
|
92,120,223
|
|
|
|
104,383,091
|
|
Accumulated deficit
|
|
|
(71,686,703
|
)
|
|
|
(71,686,703
|
)
|
|
|
(71,686,703
|
)
|
Total stockholders’ equity
|
|
|
17,359,830
|
|
|
|
21,459,446
|
|
|
|
33,724,560
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total capitalization
|
|
$
|
20,231,757
|
|
|
$
|
23,266,746
|
|
|
$
|
35,531,860
|
|
A $1.00 increase in the assumed combined public
offering price of $0.601 per share and accompanying Warrant (which is based on the last reported closing price of our Common Stock of
$0.601 per share on September 8, 2021), would increase cash and cash equivalents, working capital, total assets, and total stockholders’
equity by approximately $20.9 million, assuming the number of shares of Common Stock and Warrants offered by us, as set forth on the
cover of this prospectus, remains the same and after deducting underwriting discounts and commissions and estimated offering expenses
payable by us and assuming no exercise of the Warrants and the underwriter’s over-allotment option. An increase (decrease) in the
number of shares of Common Stock and Warrants that we are offering of 1,000,000 shares of Common Stock and Warrants offered by us would
increase (decrease) cash and cash equivalents, working capital, total assets, and total stockholders’ equity by approximately $0.6
million, after deducting underwriting discounts and commissions and estimated offering expenses payable by us and assuming no exercise
of the underwriter’s over-allotment option and that the combined public offering price of such shares of Common Stock and accompanying
Warrants remains as set forth on the cover page of this prospectus remains the same. The pro forma as adjusted information discussed
above is illustrative only and will adjust based on the actual combined public offering price and other terms of this offering determined
at pricing.
The
total number of shares of our Common Stock reflected in the discussion and tables above is based on 53,311,898 shares of our Common Stock
outstanding as of June 30, 2021 and assumes no exercise of the underwriter’s over-allotment option, which number of outstanding
shares excludes as of such date: (i) the exercise of outstanding warrants to purchase up to an aggregate of 9,378,133 shares of Common
Stock at a weighted average exercise price of $1.70 per share; (ii) the exercise of outstanding options granted to certain directors
of the Company to purchase up to an aggregate of 408,584 shares of Common Stock at a weighted average exercise price of $0.59 per share;
(iii) the conversion of the 1,333,333 outstanding shares of Series F Preferred Stock into any shares of Common Stock; and (iv) the exercise
of any Warrants issued in connection with this offering.
DILUTION
If
you invest in the securities being offered by this prospectus, your interest will be diluted immediately to the extent of the difference
between the combined public offering price per share and accompanying Warrant and the adjusted net tangible book value per share of our
Common Stock after this offering.
Our
net tangible book value as of June 30, 2021 was approximately $(2,980,517), or $(0.06) per share of our Common Stock. Net tangible
book value per share is equal to our total tangible assets minus total liabilities, all divided by 53,311,898 shares of Common Stock
outstanding at June 30, 2021.
After
giving effect to the pro forma effect of (i) the receipt of funds from the issuance and sale of the following securities, pursuant
to a private placement offering that we closed on August 16, 2021: (x) an aggregate of 1,333,333 shares of our Series F Preferred Stock
and (y) August Warrants to purchase up to an aggregate of 6,666,665 shares of Common Stock at an exercise price of $0.78 per share; (ii)
the cash payment of $250,000 to GDMSAI pursuant to the Settlement Agreement; (iii) the $1,064,627 voluntary prepayment on our term
loan to CrowdOut, (iv) the issuance of 500,000 shares of Common Stock to Mr. Miceli in September
2021 and (v) the conversion of 993,333 shares of Series F Preferred Stock into 5,445,008
shares of Common Stock, assuming a Reset Conversion Price of $0.54729 per share, our pro forma
net tangible book value as of June 30, 2021 would have been approximately $99,099 or
approximately $0 per share, assuming no conversion of the remaining 340,000 outstanding shares of Series F Preferred Stock.
After giving effect to the pro forma events listed above and to our sale in this offering of 22,462,562 shares of Common Stock and accompanying
Warrants offered by this prospectus (assuming a combined public offering price of $0.601 per
share of Common Stock and accompanying Warrant), and after deducting the underwriting discounts and commissions and estimated
offering expenses payable by us, assuming no exercise of the Warrants, assuming no exercise by the underwriter of the over-allotment
option, our pro forma as adjusted net tangible book value as of June 30, 2021 would have been approximately
$12,364,213 or approximately $0.15 per share. This represents an immediate increase in pro forma as adjusted net tangible book value
of approximately $0.15 per share to our existing stockholders and an immediate dilution in pro forma as adjusted net tangible book value
of approximately $0.45 per share to purchasers of our securities in this offering, as illustrated by the following table:
Combined assumed public offering price per share
of Common Stock and accompanying Warrant
|
|
|
|
|
$
|
0.601
|
Historical net tangible book value per share at June 30, 2021,
before giving effect to this offering
|
|
$
|
(0.06
|
)
|
Increase in pro forma net tangible book value per share at
June 30, 2021, attributable to current shareholders before giving effect to this offering (assuming conversion of all outstanding
shares of Series F Preferred Stock at a Reset Conversion Price equal to $0.54729 per share)
|
|
$
|
0.06
|
|
Pro forma net tangible book value per share at June 30, 2021,
before giving effect to this offering (assuming conversion of all outstanding shares of Series F Preferred Stock at a Reset Conversion
Price equal to $0.54729 per share)
|
|
$
|
0.00
|
|
Increase (decrease) in pro forma as adjusted net tangible per
share attributable to investors in this offering
|
|
$
|
0.15
|
|
Pro forma as adjusted net tangible book value per share, as
adjusted to give effect to this offering
|
|
$
|
0.15
|
|
Dilution to pro forma as adjusted net tangible book value per
share to investors in this offering
|
|
|
|
|
$
|
0.45
|
If the underwriters exercise their option
only to purchase 3,369,384 additional shares of Common Stock in this offering at the assumed offering price of $0.591 per share attributed
to the Common Stock, after deducting the underwriting discounts and commissions and based on the other above assumptions, the pro forma
as adjusted net tangible book value per share after this offering would be $0.17 per share, the incremental increase in the pro forma
as adjusted net tangible book value per share to existing stockholders would be $0.02 per share and the dilution to new investors purchasing
shares in this offering would be $0.43 per share. If the underwriters exercise their option only to purchase 3,369,384 additional Warrants
in this offering at the assumed offering price of $0.01 per Warrant attributed to the Warrants, after deducting the underwriting discounts
and commissions and based on the other above assumptions, the pro forma as adjusted net tangible book value per share after this offering
would be $0.15 per share, there would be no increase in the pro forma as adjusted net tangible book value per share to existing stockholders
and the dilution to new investors purchasing shares in this offering would be $0.45 per share.
A $1.00 increase in the assumed combined public
offering price of $0.601 per share and accompanying Warrant (which is based on the last reported closing price of our Common Stock of
$0.601 per share on September 8, 2021), would increase our pro forma as adjusted net tangible book value after giving effect to this
offering by approximately $20,890,183 and the dilution to pro forma as adjusted net tangible book value per share to new investors in
this offering by $1.19 per share, assuming the number of shares of Common Stock and Warrants offered by us, as set forth on the cover
of this prospectus, remains the same and after deducting underwriting discounts and commissions and estimated offering expenses payable
by us and assuming no exercise of the Warrants and the underwriter’s over-allotment option.
The
following table summarizes as of June 30, 2021, on a pro forma as adjusted basis, as described above, the number of shares of our Common
Stock, the total consideration and the average price per share (1) paid to us by our existing stockholders and (2) to be paid by investors
purchasing shares of our Common Stock and accompanying Warrants in this offering, assuming a combined public offering price of $0.601
per share of Common Stock and accompanying Warrant offered by this prospectus, before deducting underwriting discounts and commissions
and estimated offering expenses payable by us:
|
|
Shares
Purchased
|
|
|
Total
Consideration
|
|
|
Average
Price
|
|
|
|
Number
|
|
|
Percent
|
|
|
Amount
|
|
|
Percent
|
|
|
Per Share
|
|
Existing stockholders
|
|
|
59,256,907
|
|
|
|
72.5
|
%
|
|
$
|
93,176,705
|
|
|
|
87.3
|
%
|
|
$
|
1.572
|
|
New investors
|
|
|
22,462,562
|
|
|
|
27.5
|
%
|
|
$
|
13,500,000
|
|
|
|
12.7
|
%
|
|
|
0.601
|
|
Total
|
|
|
81,719,469
|
|
|
|
100.0
|
%
|
|
|
106,676,705
|
|
|
$
|
100.0
|
%
|
|
$
|
1.305
|
|
The total number of shares of our Common Stock
reflected in the discussion and tables above is based on 53,311,898 shares of our Common Stock outstanding as of June 30, 2021 and the
53,311.898 does not take into account the exercise of the underwriter’s over-allotment option and excludes as of such date: (i)
the exercise of outstanding warrants to purchase up to an aggregate of 9,378,133 shares of Common Stock at a weighted average exercise
price of $1.70 per share; (ii) the exercise of outstanding options granted to certain directors of the Company to purchase up to an aggregate
of 408,854 shares of Common Stock at a weighted average exercise price of $0.59 per share; (iii) the conversion of the 1,333,333 outstanding
shares of Series F Preferred Stock into any shares of Common Stock; and (iv) the exercise of any Warrants issued in connection with this
offering.
To
the extent that our outstanding options, warrants or shares of Series F Preferred Stock are exercised or converted, as applicable, you
could experience further dilution. To the extent that we raise additional capital through the sale of additional equity, the issuance
of any of our shares of Common Stock could result in further dilution to our stockholders.
PROPERTIES
Our
principal offices are located at 288 Christian Street, Hangar C, 2nd Floor, Oxford, Connecticut 06478, and our telephone number is (203)
266-2103. The principal offices of LogicMark are located at 2801 Diode Lane, Louisville, Kentucky 40299. Our corporate telephone number
is (203) 266-2103. We believe the current offices and facilities for us and our subsidiaries are adequate for the near future.
LEGAL
PROCEEDINGS
On
February 24, 2020, the Shareholder Representative and the Fit Pay Shareholders filed a lawsuit in the United States District Court for
the Southern District of New York against the Company, CrowdOut Capital, LLC, and Garmin International, Inc. (the “Complaint”).
See Orlando v. Nxt-ID, Inc. No. 20-cv-1604 (S.D.N.Y.). The Complaint alleges that the Company has breached certain contractual obligations
under a merger agreement, dated May 23, 2017, between Fit Pay and the Company, regarding certain future, contingent earnout payments
allegedly that could be owed to the Fit Pay Shareholders from future revenues. The Complaint seeks unspecified monetary damages from
the defendants. While we believe that these claims are without merit and we plan to vigorously defend the action, there is no assurance
that we will be successful in such defense. On May 12, 2020, the Company filed an answer and counterclaims alleging, among other things,
fraud and breach of fiduciary duty of the Shareholder Representative as well as arguing that the Shareholder Representative should be
estopped from pursuing these claims. The Company has moved for summary judgment to have the lawsuit dismissed. In March 2021, following
our successful application to stay all discovery, the court granted CrowdOut and Garmin’s separate motions to dismiss. The Shareholder
Representative’s claim against the Company still remains and the Company’s motion for summary judgment is still pending.
See “Prospectus Summary – Legal Proceedings”.
DIRECTORS,
EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Except
as superseded by the disclosure in this section, the disclosure of the Company’s directors, executive officers and corporate governance
in Part III, Item 10 of the Company’s Annual Report on Form 10-K as filed with the SEC on April 15, 2021 is incorporated herein
by reference (see “Incorporation of Certain Information by Reference”):
Our
executive officers and directors and their ages and positions are as follows:
Name
|
|
Age
|
|
Position
|
|
Date
First Elected or Appointed
|
Chia-Lin Simmons
|
|
48
|
|
Chief
Executive Officer and Director
|
|
June 14, 2021
|
Mark Archer
|
|
64
|
|
Interim Chief Financial Officer
|
|
July 15, 2021
|
Major General David R.
Gust, USA, Ret
|
|
78
|
|
Director
|
|
June
25, 2012
|
Michael J. D’Almada-Remedios,
PhD
|
|
58
|
|
Director
|
|
September
26, 2013
|
Daniel P. Sharkey
|
|
64
|
|
Director
|
|
June 23, 2014
|
Robert A. Curtis, Pharm.D.
|
|
66
|
|
Director
|
|
July 25, 2018
|
Chia-Lin
Simmons, Chief Executive Officer and Director
Ms.
Simmons has served as Chief Executive Officer and a director of the Company since June 14, 2021. From 2016 to June 2021, Ms. Simmons
served as the CEO and co-founder of LookyLoo, Inc., an artificial intelligence social commerce company. Ms. Simmons currently also serves
as a member of the board of directors for Servco Pacific Inc., a global automotive and consumer goods company with businesses in mobility,
automotive distribution and sales, and entertainment, and for New Energy Nexus, an international organization that supports clean energy
entrepreneurs with funds, accelerators and networks. From 2014 to 2016, Ms. Simmons served as Head of Global Partner Marketing at Google
Play, prior to which, between 2010 and 2014, she served as VP of Marketing & Content for Harman International. Ms. Simmons received
her B.A. in Communications, Magna cum Laude and Phi Beta Kappa, from the University of California, San Diego in 1995. She also received
her M.B.A. from Cornell University in 2002, and her J.D. from George Mason University in 2005, and is currently a licensed attorney in
the State of New York. The Company believes that Ms. Simmons’ broad technology industry expertise, her experience in product development
and launch, and her role as Chief Executive Officer give her the qualifications and skills to serve as a member of the Board.
Mark Archer,
Interim Chief Financial Officer
Mr.
Archer currently serves as a Partner at FLG Partners, LLC (“FLG Partners”), a Silicon Valley chief financial officer services
and board advisory consultancy firm. Mr. Archer has over 40 years of financial and operational experience, including assignments in technology
and consumer products companies. Prior to joining FLG Partners in April 2021, from 1997 to 2020, Mr. Archer served as Executive
Vice President and Chief Financial Officer of Saxco International LLC, a leading US distributor of glass and other rigid packaging solutions
to the wine, beer and spirits industries. Prior to his time at Saxco International LLC, from 2016 to 2018, Mr. Archer served as President
and Chief Executive Officer of Swarm Technology LLC, a growth stage technology company developing proprietary software, using Internet
of Things architecture, and manufacturing hardware for direct sales to the agricultural industry. Mr. Archer received both his B.S. degree
in Business Administration and an M.B.A. in Finance from the University of Southern California.
CERTAIN
RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Other
than compensation arrangements for our directors and executive officers, the following is a summary of transactions since the years ended
December 31, 2020, 2019 and 2018 to which we have been a party in which the amount involved exceeded the lesser of (i) $120,000 or (ii)
one percent of the average of our total assets at year-end for the last two completed fiscal years, and in which any of our then directors,
executive officers or holders of more than 5% of any class of our stock at the time of such transaction, or any members of their immediate
family, had or will have a direct or indirect material interest.
On
August 16, 2021, we closed the August Offering, which was conducted pursuant to the August Purchase Agreement, whereby we issued to certain
institutional investors, including Anson Investments Master Fund LP and Alpha Capital Anstalt, each of which beneficially owned 5% or
more of our outstanding shares of Common Stock at such time (collectively, the “Investors”), in a private placement offering
(i) an aggregate of 1,333,333 shares of Series F Preferred Stock and (ii) the August Warrants exercisable for up to 6,666,665 shares
of Common Stock at an exercise price of $0.78 per share, subject to customary adjustments thereunder, which are exercisable six months
from the date of issuance and have terms of five and a half (5.5) years. Anson Investments Master Fund received 666,666 shares of Series
F Preferred Stock and August Warrants exercisable for up to 3,333,330 shares of Common Stock in consideration for approximately $2 million
and Alpha Capital Anstalt received 333,333 shares of Series F Preferred Stock and August Warrants exercisable for up to 1,666,665 shares
of Common Stock in consideration for $1 million. The August Offering resulted in gross proceeds of approximately $4 million, before deducting
any offering expenses.
On
February 2, 2021, we closed concurrent registered direct and private placement offerings pursuant to a securities purchase agreement,
dated as of January 29, 2021 (the “January Purchase Agreement”), in which we issued to the Investors, each of which beneficially
owned 5% or more of our outstanding shares of Common Stock at such time, an aggregate of 1,476,016 shares of Series E Preferred Stock
and common stock purchase warrants exercisable for an aggregate of 2,952,032 shares of Common Stock (such concurrent offerings collectively,
the “February Offering”), which was conducted pursuant to pursuant to a securities purchase agreement, dated as of January
29, 2021. Such warrants were exercisable at an exercise price of $1.23 per share, subject to customary adjustments thereunder, which
were exercisable immediately upon issuance and had five year terms. The February Offering resulted in gross proceeds to the Company of
approximately $4 million, before deducting any offering expenses, and the Investors participated equally with respect to the consideration
paid and the amount of securities received pursuant to the February Offering.
During
the year ended December 31, 2018, we recognized revenue of $737,993 from WorldVentures Holdings, LLC (“WVH”), a related party.
Dr. D’Almada-Remedios, a director of the Company, was the former Chief Executive Officer of Flye Inc., a payment technology company
owned by WVH. In addition, our accounts receivable, net balance at December 31, 2018 included $0, due from WVH.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following table sets forth, as of September 10, 2021, information regarding beneficial ownership of our capital stock by:
|
●
|
each
person, or group of affiliated persons, who is known by us to beneficially own more than
5% of our Common Stock, Series C Preferred Stock and Series F Preferred Stock;
|
|
●
|
each
of our named executive officers;
|
|
●
|
each
of our directors; and
|
|
●
|
all
of our executive officers and directors as a group.
|
The percentage ownership information shown in
the table prior to this offering is based upon 59,256,907 shares of Common Stock, 2,000 shares of Series C Preferred Stock and 340,000
shares of Series F Preferred Stock outstanding as of September 10, 2021. The percentage ownership information shown in the table after
this offering is based upon 81,719,469 shares of Common Stock (based on the sale of 22,462,562 shares of Common Stock in this offering,
assuming a combined public offering price of $0.601 per share and accompanying Warrant), 2,000 shares of Series C Preferred Stock and
340,000 shares of Series F Preferred Stock outstanding as of such date, assuming no exercise of any Warrants and no exercise by the underwriters
of their over-allotment option. For purposes of determining the number of shares of Common Stock issuable upon the conversion of the
993,333 shares of Series F Preferred Stock converted as of September 10, 2021 and the number of shares of Common Stock issuable upon
conversion of the 340,000 shares of Series F Preferred Stock outstanding, a Reset Conversion Price of $0.54729 per share has been assumed
for the Conversion Price Reset Calculation Period, as only the average VWAPs for the four consecutive trading days after the effective
date of the Resale Registration Statement has been calculated as of the date of this prospectus. The actual Reset Conversion Price for
all five trading days of the Conversion Price Reset Calculation Period (which is subject to further adjustment pursuant to the Series
F Certificate of Designation upon the closing of this offering if the public offering price of the shares of Common Stock is lower than
the actual Reset Conversion Price on the date of such closing) has not been included in this prospectus, and the assumed Reset Conversion
Price is based on the assumption that the fifth day’s VWAP is consistent with the VWAPs of the four previous trading days.
Beneficial
ownership is determined according to the rules of 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 September 10, 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, Series C Preferred Stock or Series F 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, Series C Preferred Stock and Series F Preferred Stock
held by each person or group of persons named above, any shares of Common Stock, Series C Preferred Stock or Series F Preferred Stock
that such person or persons has the right to acquire within sixty (60) days of September 10, 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, Series C Preferred Stock and Series F 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.
|
|
|
Shares
Beneficially Owned Prior to the Offering
|
|
|
|
Shares
Beneficially Owned After the Offering
|
|
|
|
|
|
Name of Beneficial Owner
|
|
|
Common
Stock
|
|
|
|
Series
C
Preferred
Stock
|
|
|
|
Series
F
Preferred
Stock
|
|
|
|
%
Total
Voting
|
|
|
|
Common
Stock
|
|
|
|
Series
C
Preferred
Stock
|
|
|
|
Series
F
Preferred
Stock
|
|
|
|
%
Total
Voting
|
|
Non-Director
or Officer
5% Stockholders:
|
|
|
Shares
|
|
|
|
%
|
|
|
|
Shares
|
|
|
|
%
|
|
|
|
Shares
|
|
|
|
%
|
|
|
|
Power(1)
|
|
|
|
Shares
|
|
|
|
%
|
|
|
|
Shares
|
|
|
|
%
|
|
|
|
Shares
|
|
|
|
%
|
|
|
|
Power(1)
|
|
Anson
Investments Master Fund LP(2)
|
|
|
6,171,196
|
|
|
|
9.99
|
%
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
9.99
|
%
|
|
|
7,606,359
|
|
|
|
8.88
|
%
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
8.88
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alpha
Capital Anstalt(3)
|
|
|
3,907,884
|
|
|
|
6.49
|
%
|
|
|
-
|
|
|
|
-
|
|
|
|
173,333
|
|
|
|
50.98
|
%
|
|
|
6.49
|
%
|
|
|
5,087,636
|
|
|
|
6.07
|
%
|
|
|
-
|
|
|
|
-
|
|
|
|
173,333
|
|
|
|
50.98
|
%
|
|
|
6.07
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3i,
LP(4)
|
|
|
1,827,188
|
|
|
|
3.04
|
%
|
|
|
-
|
|
|
|
-
|
|
|
|
166,667
|
|
|
|
49.02
|
%
|
|
|
3.04
|
%
|
|
|
1,827,188
|
|
|
|
2.21
|
%
|
|
|
-
|
|
|
|
-
|
|
|
|
166,667
|
|
|
|
49.02
|
%
|
|
|
2.21
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Giesecke
& Devrient Mobile Security America, Inc.(5)
|
|
|
584,795
|
|
|
|
*
|
|
|
|
2,000
|
|
|
|
100
|
%
|
|
|
-
|
|
|
|
-
|
|
|
|
*
|
|
|
|
584,795
|
|
|
|
*
|
|
|
|
2,000
|
|
|
|
100
|
%
|
|
|
-
|
|
|
|
-
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Directors
and executive officers:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chia-Lin
Simmons Chief Executive Officer and Director(6)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark
Archer Interim Chief Financial Officer
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vincent
S. Miceli(7) Former Chief Executive Officer, Former Chief Financial Officer and Former Director
|
|
|
1,077,517
|
|
|
|
1.82
|
%
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1.82
|
%
|
|
|
1,077,517
|
|
|
|
1.32
|
%
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1.32
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Major
General David R. Gust, USA, Ret. Director(8)
|
|
|
368,669
|
|
|
|
*
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
*
|
|
|
|
368,669
|
|
|
|
*
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael
J. D’Almada-Remedios, PhD Director(9)
|
|
|
374,037
|
|
|
|
*
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
*
|
|
|
|
374,037
|
|
|
|
*
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Daniel
P. Sharkey Director(10)
|
|
|
363,657
|
|
|
|
*
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
*
|
|
|
|
363,657
|
|
|
|
*
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert
A. Curtis, Pharm.D. Director(11)
|
|
|
278,566
|
|
|
|
*
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
*
|
|
|
|
278,566
|
|
|
|
*
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
Directors
and Executive Officers as a Group (7 persons)
|
|
|
2,462,446
|
|
|
|
4.13
|
%
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
4.13
|
%
|
|
|
2,462,446
|
|
|
|
3.00
|
%
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
3.00
|
%
|
(1)
|
Percentage of total voting
power represents voting power with respect to all shares of our Common Stock and 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. The holders of our Series F Preferred Stock vote on an as-converted to Common Stock basis with respect to all matters
on which the holders of Common Stock are entitled to vote.
|
(2)
|
Shares of Common Stock issuable upon exercise
or conversion prior to the offering (i) include warrants exercisable for up to an aggregate of 9,450,413 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; and (ii) exclude the August Warrants exercisable for up to 3,333,330
shares of Common Stock which are not exercisable for shares of Common Stock within 60 days after September 10, 2021. Anson Investments
Master Fund LP’s (“AIMF”) beneficial ownership prior to the offering consists of (a) 3,654,366 shares of Common
Stock that were issued upon conversion of 666,666 shares of Series F Preferred Stock, assuming a Reset Conversion Price equal to
$0.54729 per share, and (b) warrants subject to 4.99% and 9.99% beneficial ownership limitations, as applicable, exercisable and
convertible for up to an aggregate of 2,516,830 shares of Common Stock, which equals beneficial ownership of 9.99% of the shares
of Common Stock outstanding. An aggregate of an additional 6,933,580 shares of Common Stock issuable upon the exercise of warrants
are not currently exercisable as a result of applicable beneficial ownership limitations and/or because such shares are not exercisable
within 60 days of September 10, 2021.
|
AIMF’s beneficial ownership
subsequent to the offering consists of (i) 3,654,366 shares of Common Stock that were issued upon conversion of 666,666 shares of Series
F Preferred Stock, assuming a Reset Conversion Price equal to $0.54729 per share, and (ii) warrants subject to 4.99% and 9.99% beneficial
ownership limitations, as applicable, exercisable for up to an aggregate of 7,606,359 shares of Common Stock, which equals beneficial
ownership of 8.88% of the shares of Common Stock outstanding. An aggregate of an additional 5,498,417 shares of Common Stock issuable
upon the exercise of warrants are not currently exercisable as a result of applicable beneficial ownership limitations and/or because
such shares are not exercisable within 60 days of September 10, 2021.
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.
(3)
|
Shares of Common Stock issuable upon exercise
or conversion prior to the offering (i) include 2,064,042 shares of Common Stock, warrants exercisable for an aggregate of 4,011,432
shares of Common Stock and 173,333 shares of Series F Preferred Stock convertible into 950,134 shares of Common Stock, assuming a
Reset Conversion Price equal to $0.54729 per share, which warrants and shares of Series F Preferred Stock are subject to, as applicable,
certain beneficial ownership limitations, which provide that a holder of such warrants and such shares of Series F Preferred Stock
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; and (ii) exclude the August Warrants exercisable for up to 1,666,665
shares of Common Stock which are not exercisable for shares of Common Stock within 60 days after September 10, 2021. Alpha Capital
Anstalt’s beneficial ownership prior to the offering consists of (a) 2,941,091 shares of Common Stock, of which 877,049 shares
of Common Stock that were issued upon conversion of 160,000 shares of Series F Preferred Stock, assuming a Reset Conversion Price
equal to $0.54729 per share, and (b) warrants subject to 4.99% and 9.99% beneficial ownership limitations, as applicable, exercisable
for up to an aggregate of 16,659 shares of Common Stock, and shares of Series F Preferred Stock subject to 4.99% and 9.99% beneficial
ownership limitations, as applicable, convertible into up to an aggregate of 950,134 shares of Common Stock, assuming a Reset Conversion
Price equal to $0.54729 per share, which equals beneficial ownership of 6.49% of the Company’s shares of Common Stock outstanding
when aggregated with the 2,941,091 shares of Common Stock held by such holder. An aggregate of an additional 3,944,773 shares of
Common Stock issuable upon the exercise of warrants are not currently exercisable as a result of applicable beneficial ownership
limitations and/or because such shares are not exercisable within 60 days of September 10, 2021.
Alpha Capital Anstalt’s beneficial
ownership subsequent to the offering consists of (i) 2,941,091 shares of Common Stock, of which 877,049 that were issued upon conversion
of 160,000 shares of Series F Preferred Stock, assuming a Reset Conversion Price equal to $0.54729 per share, and (ii) warrants subject
to 4.99% and 9.99% beneficial ownership limitations, as applicable, exercisable for up to an aggregate of 1,196,411 shares of Common
Stock, and shares of Series F Preferred Stock subject to 4.99% and 9.99% beneficial ownership limitations, as applicable, convertible
into up to an aggregate of 950,134 shares of Common Stock, assuming a Reset Conversion Price equal to $0.54729 per share, which equals
beneficial ownership of 6.07% of the shares of Common Stock outstanding when aggregated with the 2,941,091 shares of Common Stock
held by such holder. An aggregate of an additional 2,815,021 shares of Common Stock issuable upon the exercise of warrants are not
currently exercisable as a result of applicable beneficial ownership limitations and/or because such shares are not exercisable within
60 days of September 10, 2021. Additionally, Alpha Capital Anstalt’s beneficial ownership includes approximately 51% of the
outstanding shares of Series F Preferred Stock prior and subsequent to the offering.
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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(4)
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Shares of Common Stock issuable upon exercise
or conversion prior and subsequent to the offering include a warrant exercisable for up to 1,666,670 shares of Common Stock and 166,667
shares of Series F Preferred Stock convertible into 913,594 shares of Common Stock, assuming a Reset Conversion Price equal to $0.54729
per share, which warrants and shares of Series F Preferred Stock are subject to, as applicable, certain beneficial ownership limitations,
which provide that a holder of such warrants and such shares of Series F Preferred Stock 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% 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.
Beneficial ownership excludes an August Warrant exercisable for up to 1,666,670 shares of Common Stock which is not exercisable for
shares of Common Stock within 60 days of September 10, 2021. 3i, LP’s beneficial ownership consists of 913,594 shares of Common
Stock that were issued upon conversion of 166,667 shares of Series F Preferred Stock, assuming a Reset Conversion Price equal to
$0.54729 per share, and 913,594 additional shares of Common Stock issuable upon conversion of the remaining 166,667 shares of Series
F Preferred Stock owned by such holder, subject to 4.99% and 9.99% beneficial ownership limitations, as applicable, which equals
beneficial ownership of 3.04% of the shares of Common Stock outstanding prior to the offering and 2.21% subsequent to the offering,
as well as beneficial ownership of approximately 49% of the outstanding shares of Series F Preferred Stock prior and subsequent to
the offering. An aggregate of an additional 1,666,670 shares of Common Stock issuable upon the exercise of the August Warrants are
not currently exercisable as a result of applicable beneficial ownership limitations and/or because such shares are not exercisable
within 60 days of September 10, 2021.
The business address of 3i, LP is 140
Broadway, 38th Floor, New York, NY 10005. 3i, LP’s principal business is that of a private investor. Maier Joshua Tarlow is
the manager of 3i Management, LLC, the general partner of 3i, LP, and has sole voting control and investment discretion over securities
beneficially owned directly indirectly by 3i Management, LLC and 3i, LP. Such persons and entities have been advised that none of
Mr. Tarlow, 3i Management, LLC or 3i, LP is a member of FINRA or an independent broker-dealer, or an affiliate or associated person
of a FINRA member or independent broker-dealer. Mr. Tarlow disclaims any beneficial ownership of the securities beneficially owned
directly by 3i, LP and indirectly by 3i Management, LLC.
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(5)
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G&D is the sole holder
of our outstanding shares of 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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Excludes 2,665,595 unvested
shares of restricted Common Stock granted outside the 2013 Long Term Incentive Plan and the 2017 Stock Incentive Plan, which Ms.
Simmons does not have the right to acquire within 60 days of September 10, 2021. 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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Includes
an aggregate of 500,000 shares of Common Stock which have been issued to Mr. Miceli under the Company’s 2013 Long-Term Stock
Incentive Plan or its 2017 Stock Incentive Plan pursuant to the terms of an agreement, effective August 1, 2021, by and between the
Company and Mr. Miceli.
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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 $0.59 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 $0.59 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 $0.59 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 $0.59 per share.
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DESCRIPTION
OF SECURITIES THAT WE ARE OFFERING
We
are offering 22,462,562 shares of our Common Stock and Warrants to purchase up to an aggregate of 22,462,562 shares of our Common Stock,
which number of shares of Common Stock and accompanying Warrants are based on an assumed combined public offering price of $0.601 per
share and accompanying Warrant. Each share of our Common Stock is being sold together with a Warrant to purchase one share of our Common
Stock (other than shares of Common Stock sold in connection with the underwriter’s exercise of the over-allotment option). The
shares of our Common Stock will be issued separately from the accompanying Warrants. We are also registering the shares of our Common
Stock issuable from time to time upon exercise of the Warrants offered hereby. The following descriptions of our Common Stock, Warrants
and certain provisions of our Certificate of Incorporation, our by-laws and Delaware law are summaries. You should also refer to our
Certificate of Incorporation and our by-laws, which are filed as exhibits to the registration statement of which this prospectus is part.
General
The Company is authorized to issue 110,000,000
shares of its capital stock consisting of (a) 100,000,000 shares of Common Stock and (b) 10,000,000 shares of “blank check”
preferred stock, of which 3,125,000 shares of preferred stock were designated as the Series A Convertible Preferred Stock (“Series
A Preferred Stock”), 4,500,000 shares of preferred stock were designated as the Series B Convertible Preferred Stock (“Series
B Preferred Stock”), 2,000 shares of preferred stock were designated as the Series C Preferred Stock, 1,515,151 shares of preferred
stock were designated as Series D Preferred Stock, 1,476,016 shares of preferred stock were designated as Series E Preferred Stock and
1,333,333 shares of preferred stock were designated as Series F Preferred Stock. On February 1, 2021, the Company filed a certificate
with the Secretary of State of the State of Delaware eliminating and canceling all designations, rights, preferences and limitations of
the Series D Preferred Stock, and all shares of Series D Preferred Stock resumed the status of authorized but unissued shares of preferred
stock of the Company. On August 16, 2021, the Company filed a certificate with the Secretary of State of the State of Delaware eliminating
and canceling all designations, rights, preferences and limitations of the Series E Preferred Stock, and all shares of Series E Preferred
Stock resumed the status of authorized but unissued shares of preferred stock of the Company.
As of September 10, 2021, 59,256,907 shares of our Common Stock
were issued and outstanding, held by 81 stockholders of record (which do not include shares of Common Stock held in street name),
which number excludes the following as of such date: (i) the exercise of outstanding warrants to purchase up to an aggregate of 16,044,798
shares of Common Stock with an approximate weighted average exercise price and remaining life in years of $1.32 and 4.22, respectively,
and (ii) the exercise of outstanding options to purchase up to an aggregate of 408,584 shares of Common Stock. In addition, as of September
10, 2021, 2,000 shares of our Series C Preferred Stock were issued and outstanding, held by 1 stockholder of record, 340,000 shares of
Series F Preferred Stock were issued and outstanding, held by 2 stockholders of record, and no shares of our Series A Preferred Stock,
Series B Preferred Stock, Series D Preferred Stock or Series E Preferred Stock were issued and outstanding. The Series C Preferred Stock
ranks senior to the Common Stock and the Series F Preferred Stock with respect to dividends and redemption rights and rights upon liquidation,
dissolution or winding up of the Company, and the Series F Preferred Stock ranks senior to the Common Stock with respect to dividends
and redemption rights and rights upon liquidation, dissolution or winding up of the Company.
Availability
of Authorized Shares of Common Stock
As of September 10, 2021, we had 59,256,907 shares
of Common Stock outstanding, outstanding warrants exercisable for up to 16,044,798 shares of Common Stock, Series F Preferred Stock convertible
into an aggregate of 1,863,728 shares of Common Stock (assuming the conversion of such shares of Series F Preferred Stock at $0.54729
per share) and options granted to members of our Board exercisable for up to 408,584 shares of Common Stock. Included in such 59,256,907
shares of Common Stock outstanding are 5,445,009 shares of Common Stock that were issued upon conversion of 993,333 shares of Series
F Preferred Stock at the assumed Reset Conversion Price (as defined herein) and included in the 16,044,798 shares of Common Stock underlying
outstanding warrants are 6,666,665 shares of Common Stock reserved for issuance upon exercise of the warrants issued in our August 2021
private placement in accordance with the terms of the agreements entered into in connection with such private placement. Our Certificate
of Incorporation authorizes the issuance of 100,000,000 shares of Common Stock. As a result, after giving effect to the foregoing mentioned
outstanding shares of Common Stock and shares reserved for issuance pursuant to warrants, shares of Series F Preferred Stock and options
held by our directors, we only have 22,425,984 shares of Common Stock available for issuance in this offering. Our issuance of 22,462,562
shares of Common Stock in this offering (and up to an additional 3,369,384 shares of Common Stock in the event of the full exercise of
the underwriter’s over-allotment option described below, if such over-allotment option is exercised fully in shares of Common Stock),
would exceed the number of authorized shares of Common Stock we have available for issuance by 3,405,963 shares of Common Stock. Therefore,
in order for us to consummate this offering, we will need to receive approval of holders of certain warrants to release at least 3,405,963
shares of Common Stock from shares of Common Stock reserved for issuance pursuant to outstanding warrants prior to the closing of this
offering. In addition, pursuant to the terms of the Series F Certificate of Designation, the shares of Series F Preferred Stock are subject
to reset provisions in the Series F Certificate of Designation that could result in us being required to issue additional shares of Common
Stock to the holders of Series F Preferred Stock. For purposes of determining the number of shares of Common Stock that will no longer
be subject to reservation and the number of shares issuable upon the 993,333 shares of Series F Preferred Stock that have been converted
as of September 10, 2021 and the number of shares of Common Stock issuable upon conversion of the remaining 340,000 shares of Series
F Preferred Stock outstanding, a Reset Conversion Price of $0.54729 per share has been assumed for the Conversion Price Reset Calculation
Period, as only the average VWAPs for the four consecutive trading days after the effective date of the Resale Registration Statement
has been calculated as of the date of this prospectus. The actual Reset Conversion Price for all five trading days of the Conversion
Price Reset Calculation Period (which is subject to further adjustment pursuant to the Series F Certificate of Designation upon the closing
of this offering if the public offering price of the shares of Common Stock is lower than the actual Reset Conversion Price on the date
of such closing has not been included in this prospectus), and the assumed Reset Conversion Price is based on the assumption that the
fifth day’s VWAP is consistent with the VWAPs of the four previous trading days.
Common
Stock
Each
share of Common Stock entitles the holder to one vote, either in person or by proxy, at meetings of stockholders. Our stockholders are
not permitted to vote their shares cumulatively. Accordingly, the holders of our Common Stock who hold, in the aggregate, more than 50%
of the total voting rights can elect all of our directors and, in such event, the holders of the remaining minority shares will not be
able to elect any of such directors. The vote of the holders of a majority of the issued and outstanding shares of Common Stock entitled
to vote thereon is sufficient to authorize, affirm, ratify or consent to such act or action, except as otherwise provided by law.
Holders
of Common Stock are entitled to receive ratably such dividends, if any, as may be declared by our Board out of funds legally available.
We have not paid any dividends since our inception, and we presently anticipate that all earnings, if any, will be retained for development
of our business. Any future disposition of dividends will be at the discretion of our Board and will depend upon, among other things,
our future earnings, operating and financial condition, capital requirements, and other factors.
Holders of our Common Stock have no preemptive
rights or other subscription rights, conversion rights, redemption or sinking fund provisions. Upon our liquidation, dissolution or winding
up, the holders of our Common Stock will be entitled to share ratably in the net assets legally available for distribution to stockholders
after the payment of all of our debts and other liabilities.
Warrants
The following summary of certain terms and provisions
of the Warrants offered hereby is not complete and is subject to, and qualified in its entirety by, the provisions of the form of Warrant,
which is filed as an exhibit to the registration statement of which this prospectus is a part. Prospective investors should carefully
review the terms and provisions set forth in the form of Warrant.
Duration and Exercise Price
Each Warrant offered hereby will have an initial
exercise price per share equal to $0.6611 per share, based on the assumed combined public offering price of $0.601 per share. The Warrants
will be exercisable commencing on the effective date of a reverse stock split of our shares of Common Stock or an increase in the number
of authorized shares of our Common Stock, so that we have a sufficient number of shares of Common Stock reserved for issuance upon exercise
of the Warrants by paying the aggregate exercise price for the shares of Common Stock being exercised or exercised on a cashless basis
after the initial exercise date for a net number of shares of Common Stock, as provided in the formula in the Warrants, and in either
case, will expire on the fifth anniversary of their initial exercise date. The exercise price and number of shares of Common Stock issuable
upon exercise is subject to appropriate adjustment in the event of stock dividends, stock splits, reorganizations or similar events affecting
our Common Stock and the exercise price. In addition, on the date on which such reverse stock split is effected, the exercise price of
the Warrants will be reset to the lesser of (i) the exercise price then in effect after taking into account and adjusting for such reverse
stock split and (ii) the closing per share price of the Common Stock immediately prior to the effective date of such reverse stock split,
taking into account and adjusting for such split. The Warrants will be issued separately from the shares of Common Stock offered hereby,
and may be transferred separately immediately thereafter. A Warrant to purchase one (1) share of our Common Stock will be issued for
every one (1) share of Common Stock purchased in this offering.
Exercisability
The Warrants will be exercisable, at the option
of each holder, in whole or in part, by delivering a duly executed exercise notice accompanied by payment in full for the number of shares
of our Common Stock purchased upon such exercise (except in the case of a cashless exercise as discussed below). A holder (together with
its affiliates) may not exercise any portion of the Warrant to the extent that the holder would own more than 4.99% (or at the election
of the holder, 9.99%) of the outstanding Common Stock immediately after exercise, except that upon at least 61 days’ prior notice
from the holder to us, the holder may increase the amount of ownership of outstanding stock after exercising the holder’s Warrants.
No fractional shares of Common Stock will be issued in connection with the exercise of a Warrant. In lieu of fractional shares, we will,
at our election, either pay the holder an amount in cash equal to the fractional amount multiplied by the exercise price or round up
to the next whole share.
Cashless Exercise
If, at the time a holder exercises its Warrants,
a registration statement registering the issuance of the shares of Common Stock underlying the Warrants under the Securities Act is not
then effective or available, then in lieu of making the cash payment otherwise contemplated to be made to us upon such exercise in payment
of the aggregate exercise price, the holder may elect instead to receive upon such exercise (either in whole or in part) the net number
of shares of Common Stock determined according to a formula set forth in the Warrants.
Fundamental Transaction
In the event of a fundamental transaction,
as described in the Warrants and generally including any reorganization, recapitalization or reclassification of our Common Stock, the
sale, transfer or other disposition of all or substantially all of our properties or assets, our consolidation or merger with or into
another person, the acquisition of more than 50% of our outstanding Common Stock, or any person or group becoming the beneficial owner
of 50% of the voting power represented by our outstanding Common Stock, the holders of the Warrants will be entitled to receive upon
exercise of the Warrants the kind and amount of securities, cash or other property that the holders would have received had they exercised
the Warrants immediately prior to such fundamental transaction. Notwithstanding the foregoing, in the event of such a fundamental transaction,
the holders will have the option, which may be exercised within 30 days after the consummation of the fundamental transaction, to require
the company or the successor entity purchase the Warrant from the holder by paying to the holder an amount of cash equal to the Black
Scholes Value (as defined in the Warrant) of the remaining unexercised portion of the Warrant on the date of the consummation of such
transaction. However, if such fundamental transaction is not within the Company’s control, including not approved by the Board,
the holder will only be entitled to receive from the Company or any successor entity, as of the date of consummation of such fundamental
transaction, the same type or form of consideration (and in the same proportion), at the Black Scholes Value of the unexercised portion
of the Warrant, that is being offered and paid to the holders of Common Stock in connection with the fundamental transaction, whether
that consideration be in the form of cash, stock or any combination thereof, or whether the holders of Common Stock are given the choice
to receive from among alternative forms of consideration in connection with the fundamental transaction.
Transferability
Subject to applicable laws, a Warrant may be
transferred at the option of the holder upon surrender of the Warrant together with the appropriate instruments of transfer.
Exchange Listing
There is no established public trading market
for the Warrants, and we do not expect a market to develop. We do not intend to list the Warrants on any securities exchange or nationally
recognized trading system. Without an active trading market, the liquidity of the Warrants will be limited.
Right as a Stockholder
Except as otherwise provided in the Warrants
or by virtue of such holder’s ownership of shares of our Common Stock, the holders of the Warrants do not have the rights or privileges
of holders of our Common Stock, including any voting rights, until they exercise their Warrants.
Amendment and Waiver
The Warrants may be modified or amended or the
provisions thereof waived with the written consent of the Company and the holders of at least fifty five (55%) of the shares Common Stock
issuable upon the exercise of the then-outstanding Warrants (determined without giving effect to the exercise limitation provisions of
the Warrants); provided such modification, amendment or waiver applies to all of the then-outstanding Warrants.
Approval of Reverse Stock Split
Pursuant to the terms of the Warrants, we
have agreed to take all corporate action necessary to call a meeting of our stockholders (which may be its annual meeting)
no later than October 15, 2021, for the purpose of seeking approval of our stockholders to amend the Certificate of Incorporation to
either (i) increase the number of authorized shares of Common Stock or (ii) effect a reverse split of our Common Stock, in
either event sufficient to permit the exercise in full of the Warrants in accordance with their terms. In addition, if the Company does
not obtain such stockholder approval, we have agreed to call such a meeting every four (4) months thereafter to seek such approval until
the date such approval is obtained.
Anti-Takeover Provisions
Anti-Takeover Statute
We are subject to Section 203 of the DGCL,
which generally prohibits a publicly held Delaware corporation from engaging in any business combination with any interested stockholder
for a period of three years after the date that such stockholder became an interested stockholder, with the following exceptions:
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before
such date, the board of directors of the corporation approved either the business combination
or the transaction that resulted in the stockholder becoming an interested stockholder;
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upon
completion of the transaction that resulted in the stockholder becoming an interested stockholder,
the interested stockholder owned at least 85% of the voting stock of the corporation outstanding
at the time the transaction began, excluding for purposes of determining the voting stock
outstanding, but not the outstanding voting stock owned by the interested stockholder, those
shares owned (1) by persons who are directors and also officers and (2) employee
stock plans in which employee participants do not have the right to determine confidentially
whether shares held subject to the plan will be tendered in a tender or exchange offer; or
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on
or after such date, the business combination is approved by the board of directors and authorized
at an annual or special meeting of the stockholders, and not by written consent, by the affirmative
vote of at least 66 2⁄3% of the outstanding voting stock that is not owned by the interested
stockholder.
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In general, Section 203 defines a “business
combination” to include the following:
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any
merger or consolidation involving the corporation and the interested stockholder;
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any
sale, transfer, pledge or other disposition of 10% or more of the assets of the corporation
involving the interested stockholder;
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subject
to certain exceptions, any transaction that results in the issuance or transfer by the corporation
of any stock of the corporation to the interested stockholder;
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any
transaction involving the corporation that has the effect of increasing the proportionate
share of the stock or any class or series of the corporation beneficially owned by the interested
stockholder; or
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the
receipt by the interested stockholder of the benefit of any loans, advances, guarantees,
pledges or other financial benefits by or through the corporation.
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In general, Section 203 defines an “interested
stockholder” as an entity or person who, together with the person’s affiliates and associates, beneficially owns, or within
three years prior to the time of determination of interested stockholder status did own, 15% or more of the outstanding voting stock
of the corporation.
Anti-Takeover Effects of Certain Provisions
of our Bylaws
Our bylaws provide that directors may be removed
by the stockholders with or without cause upon the vote of a majority of the holders of Common Stock then entitled to vote. Furthermore,
the authorized number of directors may be changed only by resolution of the Board or of the stockholders, and vacancies may only be filled
by a majority vote of the directors, including those who may have resigned. Except as otherwise provided in the bylaws and the Certificate
of Incorporation any vacancies or newly created directorships on the Board resulting from any increase in the authorized number of directors
elected by all of the stockholders having the right to vote as a single class may be filled by a majority of the directors then in office,
although less than a quorum, or by a sole remaining director.
Our bylaws also provide that only our chairman
of the Board, chief executive officer, president or one or more stockholders holding shares in the aggregate entitled to cast not less
than ten percent of the votes at that meeting may call a special meeting of stockholders.
The combination of these provisions makes it
more difficult for our existing stockholders to replace our Board as well as for another party to obtain control of us by replacing our
Board. Since our Board has the power to retain and discharge our officers, these provisions could also make it more difficult for existing
stockholders or another party to effect a change in management. In addition, the authorization of undesignated preferred stock makes
it possible for our Board to issue preferred stock with voting or other rights or preferences that could impede the success of any attempt
to change our control.
These provisions are intended to enhance the
likelihood of continued stability in the composition of our Board and its policies and to discourage coercive takeover practices and
inadequate takeover bids. These provisions are also designed to reduce our vulnerability to hostile takeovers and to discourage certain
tactics that may be used in proxy fights. However, such provisions could have the effect of discouraging others from making tender offers
for our shares and may have the effect of delaying changes in our control or management. As a consequence, these provisions may also
inhibit fluctuations in the market price of our Common Stock that could result from actual or rumored takeover attempts. We believe that
the benefits of these provisions, including increased protection of our potential ability to negotiate with the proponent of an unfriendly
or unsolicited proposal to acquire or restructure our Company, outweigh the disadvantages of discouraging takeover proposals, because
negotiation of takeover proposals could result in an improvement of their terms.
Transfer
Agent and Registrar
The transfer agent and registrar
for our Common Stock is VStock Transfer, LLC, which is located at 18 Lafayette Place, Woodmere, NY 11598 and its telephone number is
(212) 828-8436.
Nasdaq Listing
Our Common Stock is listed on Nasdaq under the
symbol “NXTD.”
MATERIAL U.S. FEDERAL INCOME
TAX CONSEQUENCES TO HOLDERS OF
COMMON STOCK AND WARRANTS
The following is a summary of the material U.S.
federal income tax consequences of the acquisition, ownership and disposition of our Common Stock, and the acquisition, ownership, exercise,
expiration or disposition of the Warrants, but does not purport to be a complete analysis of all the potential tax considerations relating
thereto. This summary is based upon the provisions of the Internal Revenue Code of 1986, as amended, or the Code, Treasury Regulations
promulgated thereunder, administrative rulings and judicial decisions, all as of the date hereof. These authorities may be changed or
subject to differing interpretations, possibly with retroactive effect, so as to result in U.S. federal income tax consequences different
from those set forth below. We have not sought and will not seek any ruling from the Internal Revenue Service, or the IRS, with respect
to the statements made and the conclusions reached in the following summary, and there can be no assurance that the IRS or a court will
agree with such statements and conclusions.
This summary also does not address the tax considerations
arising under the laws of any U.S. state or local or any non-U.S. jurisdiction, estate or gift tax, the 3.8% Medicare tax on net investment
income or any alternative minimum tax consequences. In addition, this discussion does not address tax considerations applicable to a
holder’s particular circumstances or to a holder that may be subject to special tax rules, including, without limitation:
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banks, insurance companies or other financial institutions;
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tax-exempt or government organizations;
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brokers or dealers in securities or currencies;
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traders in securities that elect to use a mark-to-market method of
accounting for their securities holdings;
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persons that own, or are deemed to own, more than five percent of our
capital stock;
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certain U.S. expatriates, citizens or former long-term residents of
the United States;
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persons who hold our shares of Common Stock or Warrants as a position
in a hedging transaction, “straddle,” “conversion transaction,” synthetic security, other integrated investment,
or other risk reduction transaction;
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persons who do not hold our Common Stock or Warrants as a capital asset
within the meaning of Section 1221 of the Code (generally, for investment purposes);
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persons deemed to sell our Common Stock or Warrants under the constructive
sale provisions of the Code;
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pension plans;
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partnerships, or other entities or arrangements treated as partnerships
for U.S. federal income tax purposes, or investors in any such entities;
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persons for whom our stock constitutes “qualified small business
stock” within the meaning of Section 1202 of the Code;
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integral parts or controlled entities of foreign sovereigns;
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controlled foreign corporations;
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passive foreign investment companies and corporations that accumulate
earnings to avoid U.S. federal income tax; or
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persons that acquire our Common Stock or Warrants as compensation for
services.
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In addition, if a partnership, including any
entity or arrangement classified as a partnership for U.S. federal income tax purposes, holds our Common Stock or Warrants, the
tax treatment of a partner generally will depend on the status of the partner, the activities of the partnership, and certain determinations
made at the partner level. Accordingly, partnerships that hold our Common Stock or Warrants, and partners in such partnerships, should
consult their tax advisors regarding the U.S. federal income tax consequences to them of the purchase, ownership, and disposition of
our Common Stock or Warrants.
You are urged to consult your tax advisor with
respect to the application of the U.S. federal income tax laws to your particular situation, as well as any tax consequences of the purchase,
ownership and disposition of our Common Stock or Warrants arising under the U.S. federal estate or gift tax rules or under the laws
of any U.S. state or local or any non-U.S. or other taxing jurisdiction or under any applicable tax treaty.
Definition of a U.S. Holder
For purposes of this summary, a “U.S. Holder”
is any beneficial owner of our Common Stock or Warrants that is a “U.S. person,” and is not a partnership, or an entity
treated as a partnership or disregarded from its owner, each for U.S. federal income tax purposes. A U.S. person is any person that,
for U.S. federal income tax purposes, is or is treated as any of the following:
For purposes of this summary, a “Non-U.S.
Holder” is any beneficial owner of our Common Stock or Warrants that is not a U.S. Holder or a partnership, or other entity
treated as a partnership or disregarded from its owner, each for U.S. federal income tax purposes.
Tax Consequences to U.S. Holders
Distributions on Common Stock
As discussed above under “Dividend Information
– Dividend Policy,” we do not currently expect to make distributions on our Common Stock. In the event that we do make
distributions of cash or other property, distributions paid on Common Stock, other than certain pro rata distributions of Common Stock,
will be treated as a dividend to the extent paid out of our current or accumulated earnings and profits and will be includible in income
by the U.S. Holder and taxable as ordinary income when received. If a distribution exceeds our current and accumulated earnings and profits,
the excess will be first treated as a tax-free return of the U.S. Holder’s investment, up to the U.S. Holder’s tax basis
in the Common Stock. Any remaining excess will be treated as a capital gain. Subject to applicable limitations, dividends paid to certain
non-corporate U.S. Holders may be eligible for taxation as “qualified dividend income” and therefore may be taxable at rates
applicable to long-term capital gains. U.S. Holders should consult their tax advisers regarding the availability of the reduced tax rate
on dividends in their particular circumstances. Dividends received by a corporate U.S. Holder will be eligible for the dividends-received
deduction if the U.S. Holder meets certain holding period and other applicable requirements.
Constructive Dividends on Warrants
Under Section 305 of the Code, an adjustment
to the number of shares of Common Stock that will be issued on the exercise of the Warrants, or an adjustment to the exercise price of
the Warrants, may be treated as a constructive distribution to a U.S. Holder of the Warrants if, and to the extent that, such adjustment
has the effect of increasing such U.S. Holder’s proportionate interest in our “earnings and profits” or assets, depending
on the circumstances of such adjustment (for example, if such adjustment is to compensate for a distribution of cash or other property
to our stockholders). Adjustments to the exercise price of a Warrant made pursuant to a bona fide reasonable adjustment formula that
has the effect of preventing dilution of the interest of the holders of the Warrants should generally not result in a constructive distribution.
Any constructive distributions would generally be subject to the tax treatment described above under “Dividends on Common Stock.”
Sale or Other Disposition of Common Stock
For U.S. federal income tax purposes, gain or
loss realized on the sale or other disposition of Common Stock will be capital gain or loss, and will be long-term capital gain or loss
if the U.S. Holder held the Common Stock for more than one year. The amount of the gain or loss will equal the difference between the
U.S. Holder’s tax basis in the Common Stock disposed of and the amount realized on the disposition. Long-term capital gains recognized
by non-corporate U.S. Holders will be subject to reduced tax rates. The deductibility of capital losses is subject to limitations.
Sale or Other Disposition, Exercise or
Expiration of Warrants
For U.S. federal income tax purposes, gain or
loss realized on the sale or other disposition of a Warrant (other than by exercise) will be capital gain or loss and will be long-term
capital gain or loss if the U.S. Holder held the Warrant for more than one year at the time of the sale or other disposition. The amount
of the gain or loss will equal the difference between the U.S. Holder’s tax basis in the Warrant disposed of and the amount realized
on the disposition.
In general, a U.S. Holder will not be required
to recognize income, gain or loss upon the exercise of a Warrant by payment of the exercise price, except to the extent of cash paid
in lieu of a fractional share. A U.S. Holder’s tax basis in a share of Common Stock received upon exercise will be equal to the
sum of (1) the U.S. Holder’s tax basis in the Warrant and (2) the exercise price of the Warrant. A U.S. Holder’s holding
period in the stock received upon exercise will commence on the day or the day after such U.S. Holder exercises the Warrant. No discussion
is provided herein regarding the U.S. federal income tax treatment on the exercise of a Warrant on a cashless basis, and U.S. Holders
are urged to consult their tax advisors as to the exercise of a Warrant on a cashless basis.
If a Warrant expires without being exercised, a U.S. Holder will recognize
a capital loss in an amount equal to such U.S. Holder’s tax basis in the Warrant. This loss will be long-term capital loss if,
at the time of the expiration, the U.S. Holder’s holding period in the Warrant is more than one year. The deductibility of capital
losses is subject to limitations.
FOR NON-U.S. HOLDERS
The following is a general discussion of the
material U.S. federal income tax considerations applicable to non-U.S. holders (as defined herein) with respect to their ownership and
disposition of shares of our Common Stock and Warrants issued pursuant to this offering. All prospective non-U.S. holders of our Common
Stock should consult their tax advisors with respect to the U.S. federal, state, local and non-U.S. tax consequences of the purchase,
ownership and disposition of our Common Stock. In general, a non-U.S. holder means a beneficial owner of our Common Stock (other than
a partnership or an entity or arrangement treated as a partnership for U.S. federal income tax purposes) that is not, for U.S. federal
income tax purposes:
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an individual who is a citizen or resident of the United States;
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a corporation, or an entity treated as a corporation for U.S. federal
income tax purposes, created or organized in the United States or under the laws of the United States or of any state thereof or
the District of Columbia;
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an estate, the income of which is subject to U.S. federal income tax
regardless of its source; or
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a trust if (1) a U.S. court can exercise primary supervision over the
trust’s administration and one or more U.S. persons have the authority to control all of the trust’s substantial decisions
or (2) the trust has a valid election in effect under applicable U.S. Treasury Regulations to be treated as a U.S. person.
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This discussion is based on current provisions
of the U.S. Internal Revenue Code of 1986, as amended, which we refer to as the Code, existing U.S. Treasury Regulations promulgated
thereunder, published administrative pronouncements and rulings of the U.S. Internal Revenue Service, which we refer to as the IRS, and
judicial decisions, all as in effect as of the date of this prospectus. These authorities are subject to change and to differing interpretation,
possibly with retroactive effect. Any change or differing interpretation could alter the tax consequences to non-U.S. holders described
in this prospectus.
We assume in this discussion that a non-U.S.
holder holds shares of our Common Stock and Warrants as a capital asset within the meaning of Section 1221 of the Code (generally, for
investment). This discussion does not address all aspects of U.S. federal income taxation that may be relevant to a particular non-U.S.
holder in light of that non-U.S. holder’s individual circumstances, nor does it address any alternative minimum, Medicare contribution,
estate or gift tax consequences, or any aspects of U.S. state, local or non-U.S. taxes. This discussion also does not consider any specific
facts or circumstances that may apply to a non-U.S. holder and does not address the special tax rules applicable to particular non-U.S.
holders, such as holders that own, or are deemed to own, more than 5% of our capital stock (except to the extent specifically set forth
below), corporations that accumulate earnings to avoid U.S. federal income tax, tax-exempt organizations, banks, financial institutions,
insurance companies, brokers, dealers or traders in securities, commodities or currencies, tax-qualified retirement plans, holders who
hold or receive our Common Stock pursuant to the exercise of employee stock options or otherwise as compensation, holders holding our
Common Stock as part of a hedge, straddle or other risk reduction strategy, conversion transaction or other integrated investment, holders
deemed to sell our Common Stock under the constructive sale provisions of the Code, controlled foreign corporations, passive foreign
investment companies and certain former U.S. citizens or former long-term residents.
In addition, this discussion does not address
the tax treatment of partnerships (or entities or arrangements that are treated as partnerships for U.S. federal income tax purposes)
or persons that hold their Common Stock through such partnerships. If a partnership, including any entity or arrangement treated as a
partnership for U.S. federal income tax purposes, holds shares of our Common Stock, the U.S. federal income tax treatment of a partner
in such partnership will generally depend upon the status of the partner and the activities of the partnership. Such partners and partnerships
should consult their tax advisors regarding the tax consequences of the purchase, ownership and disposition of our Common Stock or Warrants.
There can be no assurance that a court or the
IRS will not challenge one or more of the tax consequences described herein, and we have not obtained, nor do we intend to obtain, a
ruling with respect to the U.S. federal income tax consequences to a non-U.S. holder of the purchase, ownership or disposition of our
Common Stock.
Distributions
As discussed in the section entitled “Dividend
Policy,” we do not anticipate paying any dividends on our Common Stock in the foreseeable future. If we make distributions
on our Common Stock or on the Warrants (as described above under “Constructive Dividends on Warrants”), those payments will
constitute dividends for U.S. federal income tax purposes to the extent we have current or accumulated earnings and profits, as determined
under U.S. federal income tax principles. To the extent those distributions exceed both our current and our accumulated earnings and
profits, they will constitute a return of capital and will first reduce a Non-U.S. Holder’s basis in our Common Stock or the Warrants,
as applicable, but not below zero. Any excess will be treated as capital gain and will be treated as described below under “Gain
on Sale or Other Disposition of Common Stock or Warrants.” Any such distributions would be subject to the discussions below regarding
back-up withholding and the Foreign Account Tax Compliance Act, or FATCA.
Subject to the discussion below on effectively
connected income, any dividend paid to a Non-U.S. Holder generally will be subject to U.S. withholding tax either at a rate of 30% of
the gross amount of the dividend or such lower rate as may be specified by an applicable income tax treaty. To receive a reduced treaty
rate, a Non-U.S. Holder must provide us or our agent with an IRS Form W-8BEN, IRS Form W-8 BEN-E or another appropriate version of IRS
Form W-8 (or a successor form), which must be updated periodically, and which, in each case, must certify qualification for the reduced
rate. Non-U.S. Holders should consult their tax advisors regarding their entitlement to benefits under any applicable income tax treaty.
Dividends paid to a Non-U.S. Holder that are
effectively connected with the Non-U.S. Holder’s conduct of a trade or business within the United States and that are not eligible
for relief from U.S. (net basis) income tax under an applicable income tax treaty generally are exempt from the (gross basis) withholding
tax described above. To obtain this exemption from withholding tax, the Non-U.S. Holder must provide the applicable withholding agent
with an IRS Form W-8ECI or successor form or other applicable IRS Form W-8 certifying that the dividends are effectively connected with
the Non-U.S. Holder’s conduct of a trade or business within the United States. Such effectively connected dividends, if not eligible
for relief under a tax treaty, would not be subject to a withholding tax, but would be taxed at the same graduated rates applicable to
U.S. persons, net of certain deductions and credits and if, in addition, the Non-U.S. Holder is a corporation, may also be subject to
a branch profits tax at a rate of 30% (or such lower rate as may be specified by an applicable income tax treaty).
If you are eligible for a reduced rate of withholding
tax pursuant to a tax treaty, you may be able to obtain a refund of any excess amounts withheld if you timely file an appropriate claim
for refund with the IRS.
Exercise or Expiration of Warrants
In general, a Non-U.S. Holder will not be required
to recognize income, gain or loss upon the exercise of a Warrant by payment of the exercise price, except possibly to the extent of cash
paid in lieu of a fractional share. However, no discussion is provided herein regarding the U.S. federal income tax treatment on the
exercise of a Warrant on a cashless basis, and Non-U.S. Holders are urged to consult their tax advisors as to the exercise of a Warrant
on a cashless basis.
If a Warrant expires without being exercised,
a Non-U.S. Holder that is engaged in a U.S. trade or business to which any income from the Warrant would be effectively connected or
who is present in the United States for a period or periods aggregating 183 days or more during the calendar year in which the expiration
occurs (and certain other conditions are met) will recognize a capital loss in an amount equal to such Non-U.S. Holder’s tax basis
in the Warrant. The amount paid to purchase our Common Stock and Warrants will be apportioned between them in proportion to the respective
fair market values of the Common Stock and Warrants, and the apportioned amount will be the tax basis of the Common Stock and Warrants
respectively. The fair market value of our Common Stock for this purpose will generally be its trading value immediately after issuance.
Gain on Sale, Exchange or Other Disposition
of Our Common Stock or Warrants
Subject to the discussion below regarding backup
withholding and FATCA, a Non-U.S. Holder generally will not be required to pay U.S. federal income tax on any gain realized upon the
sale or other disposition of our Common Stock or the Warrants unless:
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the gain is effectively connected with the Non-U.S. Holder’s
conduct of a trade or business within the United States and not eligible for relief under an applicable income tax treaty, in which
case the Non-U.S. Holder will be required to pay tax on the net gain derived from the sale under regular graduated U.S. federal income
tax rates, and for a Non-U.S. Holder that is a corporation, such Non-U.S. Holder may be subject to the branch profits tax at a 30%
rate (or such lower rate as may be specified by an applicable income tax treaty) on such effectively connected gain, as adjusted
for certain items;
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the Non-U.S. Holder is an individual who is present in the United States
for a period or periods aggregating 183 days or more during the calendar year in which the sale or disposition occurs and certain
other conditions are met, in which case the Non-U.S. Holder will be required to pay a flat 30% tax on the gain derived from the sale,
which tax may be offset by U.S. source capital losses (even though the Non-U.S. Holder is not considered a resident of the United
States) (subject to applicable income tax or other treaties); or
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we are a “U.S. real property holding corporation” for U.S.
federal income tax purposes, or a USRPHC, at any time within the shorter of the five-year period preceding the disposition or the
Non-U.S. Holder’s holding period for our Common Stock or the Warrants. We believe we are not currently and do not anticipate
becoming a USRPHC. However, because the determination of whether we are a USRPHC depends on the fair market value of our United States
real property interests relative to the fair market value of our other business assets, there can be no assurance that we will not
become a USRPHC in the future. Even if we become a USRPHC, however, gain arising from the sale or other taxable disposition by a
Non-U.S. Holder of our Common Stock will not be subject to United States federal income tax if (A) in the case of our Common Stock,
(a) shares of our Common Stock are “regularly traded,” as defined by applicable Treasury Regulations, on an established
securities market, such as Nasdaq, and (b) the Non-U.S. Holder owns or owned, actually and constructively, 5% or less of the shares
of our Common Stock throughout the five-year period ending on the date of the sale or exchange; and (B) in the case of the Warrants,
either (a)(i) shares of our Common Stock are “regularly traded,” as defined by applicable Treasury Regulations, on an
established securities market, such as Nasdaq, (ii) the Warrants are not considered regularly traded on an established securities
market and (iii) the Non-U.S. Holder does not own, actually or constructively, Warrants with a fair market value greater than the
fair market value of 5% of the shares of our Common Stock, determined as of the date that such Non-U.S. Holder acquired its Warrants,
or (b)(i) the Warrants are considered regularly traded on an established securities market, and (ii) the Non-U.S. Holder owns or
owned, actually and constructively, 5% or less of the Warrants throughout the five-year period ending on the date of the sale or
exchange. The Warrants are not expected to be regularly traded on an established securities market. If the foregoing exception does
not apply, and we are a USRPHC, such Non-U.S. Holder’s proceeds received on the disposition of shares will generally be subject
to withholding at a rate of 15% and such Non-U.S. Holder will generally be taxed on any gain in the same manner as gain that is effectively
connected with the conduct of a U.S. trade or business, except that the branch profits tax generally will not apply.
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Backup Withholding and Information Reporting
Information returns may be filed with the IRS
in connection with distributions on our Common Stock or constructive dividends on the Warrants, and the proceeds of a sale or other disposition
of the Common Stock or the Warrants. A non-exempt U.S. Holder may be subject to U.S. backup withholding on these payments if it fails
to provide its taxpayer identification number to the withholding agent and comply with certification procedures or otherwise establish
an exemption from backup withholding.
A Non-U.S. Holder may be subject to U.S. information
reporting and backup withholding on these payments unless the Non-U.S. Holder complies with certification procedures to establish that
it is not a U.S. person (within the meaning of the Code). The certification requirements generally will be satisfied if the Non-U.S.
Holder provides the applicable withholding agent with a statement on the applicable IRS Form W-8BEN or IRS Form W-8BEN-E (or suitable
substitute or successor form), together with all appropriate attachments, signed under penalties of perjury, stating, among other things,
that such Non-U.S. Holder is not a U.S. Person. Applicable Treasury Regulations provide alternative methods for satisfying this requirement.
In addition, the amount of distributions on common stock or constructive dividends on common stock paid to a Non-U.S. Holder, and the
amount of any U.S. federal tax withheld therefrom, must be reported annually to the IRS and the holder. This information may be made
available by the IRS under the provisions of an applicable tax treaty or agreement to the tax authorities of the country in which the
Non-U.S. Holder resides.
Payment of the proceeds of the sale or other
disposition of the Common Stock or the Warrants to or through a non-U.S. office of a U.S. broker or of a non-U.S. broker with certain
specified U.S. connections generally will be subject to information reporting requirements, but not backup withholding, unless the Non-U.S.
Holder certifies under penalties of perjury that it is not a U.S. person or an exemption otherwise applies. Payments of the proceeds
of a sale or other disposition of the Common Stock or the Warrants to or through a U.S. office of a broker generally will be subject
to information reporting and backup withholding, unless the Non-U.S. Holder certifies under penalties of perjury that it is not a U.S.
person or otherwise establishes an exemption.
Backup withholding is not an additional tax.
The amount of any backup withholding from a payment generally will be allowed as a credit against the holder’s U.S. federal income
tax liability and may entitle the holder to a refund, provided that the required information is timely furnished to the IRS.
Foreign Account Tax Compliance Act
FATCA imposes withholding tax on certain types
of payments made to foreign financial institutions and certain other non-U.S. entities. The legislation imposes a 30% withholding tax
on dividends on, or, subject to the discussion of certain proposed Treasury Regulations below, gross proceeds from the sale or other
disposition of, our Common Stock or the Warrants paid to a “foreign financial institution” or to certain “non-financial
foreign entities” (each as defined in the Code), unless (i) the foreign financial institution undertakes certain diligence and
reporting obligations, (ii) the non-financial foreign entity either certifies it does not have any “substantial United States owners”
(as defined in the Code) or furnishes identifying information regarding each substantial United States owner, or (iii) the foreign financial
institution or non-financial foreign entity otherwise qualifies for an exemption from these rules. If the payee is a foreign financial
institution and is subject to the diligence and reporting requirements in (i) above, it must enter into an agreement with the U.S. Treasury
requiring, among other things, that it undertake to identify accounts held by “specified United States persons” or “United
States-owned foreign entities” (each as defined in the Code), annually report certain information about such accounts, and withhold
30% on payments to account holders whose actions prevent it from complying with these reporting and other requirements. If the country
in which a payee is resident has entered into an “intergovernmental agreement” with the United States regarding FATCA, that
agreement may permit the payee to report to that country rather than to the U.S. Department of the Treasury. The U.S. Treasury recently
released proposed Treasury Regulations which, if finalized in their present form, would eliminate the federal withholding tax of 30%
applicable to the gross proceeds of a sale or other disposition of our Common Stock or the Warrants. In its preamble to such proposed
Treasury Regulations, the U.S. Treasury stated that taxpayers may generally rely on the proposed regulations until final regulations
are issued. Prospective investors should consult their own tax advisors regarding the possible impact of these rules on their investment
in our Common Stock or the Warrants, and the possible impact of these rules on the entities through which they hold our Common Stock
or the Warrants, including, without limitation, the process and deadlines for meeting the applicable requirements to prevent the imposition
of this 30% withholding tax under FATCA.
THE PRECEDING DISCUSSION IS FOR GENERAL INFORMATION
ONLY. EACH PROSPECTIVE INVESTOR SHOULD CONSULT ITS TAX ADVISOR REGARDING THE PARTICULAR U.S. FEDERAL, STATE AND LOCAL AND NON-U.S. TAX
CONSEQUENCES OF PURCHASING, HOLDING AND DISPOSING OF OUR COMMON STOCK AND WARRANTS, INCLUDING THE CONSEQUENCES OF ANY PROPOSED CHANGE
IN APPLICABLE LAWS.
UNDERWRITING
A.G.P./Alliance Global Partners (“A.G.P.”)
is acting as the sole book-running manager and representative of the underwriters in this offering. We and the representative have entered
into an underwriting agreement with respect to the shares of Common Stock and accompanying Warrants being offered. In connection with
this offering and subject to certain terms and conditions, the underwriters named below have agreed to purchase, and we have agreed to
sell, all of the securities in this offering to the underwriters.
Underwriter
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Number
of
Shares
of
Common Stock
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Number
of
Accompanying
Warrants
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A.G.P./Alliance Global Partners
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Total
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The underwriters have agreed to purchase all
the securities offered by us other than those covered by the over-allotment option to purchase additional securities described below,
if it purchases any such securities, and the underwriters’ obligations are several, which means that each underwriter is required
to purchase a specific number of shares of Common Stock and accompanying Warrants but is not responsible for the commitment of any other
underwriter to purchase any securities. The obligations of the underwriters may be terminated upon the occurrence of certain events specified
in the underwriting agreement. Furthermore, pursuant to the underwriting agreement, the underwriters’ obligations are subject to
customary conditions and representations and warranties contained in the underwriting agreement, such as receipt by the underwriters
of officers’ certificates and legal opinions.
The underwriters are offering the securities,
subject to prior sale, when, as and if issued to and accepted by them, subject to approval of legal matters by the representative’s
counsel and other conditions specified in the underwriting agreement. The underwriters reserve the right to withdraw, cancel or modify
offers to the public and to reject orders in whole or in part.
Over-Allotment Option
We have also granted the underwriters an option,
exercisable for up to 45 days from the date of this prospectus, to purchase up to an additional shares of Common Stock and/or Warrants,
at the public offering price attributed to the Common Stock and at the public offering price attributed to the Warrants, as applicable,
less underwriting discounts and commissions. The underwriters may exercise the option solely to cover over-allotments. If the over-allotment
option is exercised in full solely for shares of Common Stock, the total combined public offering price, underwriting compensation (including
discounts, but not including any other compensation described hereunder) and proceeds to us before offering expenses will be approximately
$ million, $ million and $
million, respectively, and excluding the proceeds, if any, from the exercise of the Warrants offered hereby. If the over-allotment option
is exercised in full solely for Warrants, the total combined public offering price, underwriting compensation (including discounts, but
not including any other compensation described hereunder) and proceeds to us before offering expenses will be approximately $
million, $ million and $ million, respectively, and excluding
the proceeds, if any, from the exercise of the Warrants offered hereby.
Indemnification
We have agreed to indemnify the underwriters
against certain liabilities, including liabilities under the Securities Act and liabilities arising from breaches of representations
and warranties contained in the underwriting agreement, or to contribute to payments that the underwriters may be required to make in
respect of those liabilities.
Underwriter Compensation
We have agreed to sell the securities to the
underwriters at the combined public offering price of $ per share
of Common Stock and accompanying Warrant, which represents the combined public offering price of such securities set forth on the cover
page of this prospectus, less the applicable 7.0% underwriting discount (or, in the case of certain identified investors, the underwriting
discount will be 3.5%).
We have also agreed to reimburse the underwriters
for accountable legal expenses incurred by it in connection with this transaction in the amount of $75,000. Additionally, we and the
representative have agreed that Maxim Group LLC will serve as our financial advisor in connection with this offering and we have agreed
to pay them a portion of the fee earned by A.G.P. equal to 20% of the net fees payable to A.G.P., which fee will be paid out from the
underwriter’s discount. We estimate that the total expenses of the offering payable by us, excluding the total underwriting discount,
will be approximately $ .
Discount, Commissions and Expenses
The underwriters have advised us that they propose
to offer the shares of Common Stock and accompanying Warrants at the combined public offering price set forth on the cover page of this
prospectus and to certain dealers at that price less a concession not in excess of $
per share and accompanying Warrant. After this offering, the combined public offering price and concession to dealers may be changed
by the representative. No such change shall change the amount of proceeds to be received by us as set forth on the cover page of this
prospectus. The shares of Common Stock and accompanying Warrants are offered by the underwriters as stated herein, subject to receipt
and acceptance by them and subject to their right to reject any order in whole or in part. The underwriters have informed us that they
do not intend to confirm sales to any accounts over which they exercise discretionary authority.
The following table summarizes the underwriting
discount we will pay to the underwriters. These amounts are shown assuming both no exercise and full exercise of the over-allotment option.
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Per
Share and
Accompanying
Warrant
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Total
without
Over-
Allotment
Option
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Total
with
Over-
Allotment
Option
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Combined public offering price
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$
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$
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$
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Total underwriting discount (7.0%)(1)
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$
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$
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$
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Proceeds to us, before expenses (2)
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$
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$
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$
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(1)
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In
the case of certain identified investors, the underwriting discount will be 3.5% of the gross proceeds in this offering.
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(2)
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Excluding
the proceeds, if any, from the exercise of the Warrants.
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Lock-Up Agreements and Trading Restrictions
Our executive officers and directors have
agreed to a three (3)-month “lock-up” from the effective date of this prospectus of shares of common stock that they beneficially
own, including the issuance of Common Stock upon the exercise of currently outstanding convertible securities and options and options
which may be issued. This means that, for a period of three (3) months following the effective date of this prospectus, such persons
may not offer, sell, pledge or otherwise dispose of these securities without the prior written consent of the representative.
The representative has no present intention to
waive or shorten the lock-up period; however, the terms of the lock-up agreements may be waived at its discretion. In determining whether
to waive the terms of the lockup agreements, the representative may base its decision on its assessment of the relative strengths of
the securities markets and companies similar to ours in general, and the trading pattern of, and demand for, our securities in general.
Additionally, we expect certain investors
in this offering to agree with the underwriter to enter into a voting agreement whereby each such investor will agree to vote all shares
of Common Stock they beneficially own on the closing date of this offering, including the shares of Common Stock purchased by them in
this offering, with respect to any proposals presented to the stockholders of the Company at the Company’s next stockholders meeting,
which is expected to be held on or around October 15, 2021; provided, however, that such requirement will not require such investor
to vote its shares of Common Stock for or against any particular proposal or proposals, whether or not such proposal or proposals are
recommended by our Board.
In addition, the underwriting agreement will
provide that we will not, for a period of three (3) months following the effective date of this prospectus, offer, sell or distribute
any of our securities, without the prior written consent of the representative, subject to certain exceptions. The underwriting agreement
will also provide that we will not, for a period of three (3) months following the effective date of this prospectus, file or cause to
be filed any registration statement with the SEC relating to the offering of shares of our capital stock or securities convertible or
exchangeable for our shares of capital stock.
Stabilization
The rules of the SEC generally prohibit the underwriters
from trading in our securities on the open market during this offering. However, the underwriters are allowed to engage in some open
market transactions and other activities during this offering that may cause the market price of our securities to be above or below
that which would otherwise prevail in the open market. These activities may include stabilization, short sales and over-allotments, syndicate
covering transactions and penalty bids.
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Stabilizing transactions consist of bids or purchases made by the representative
for the purpose of preventing or slowing a decline in the market price of our securities while this offering is in progress.
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Short sales and over-allotments occur when the representative sells
more of our shares of common stock than it purchases from us in this offering. To cover the resulting short position, the representative
may exercise the over-allotment option described above or may engage in syndicate covering transactions. There is no contractual
limit on the size of any syndicate covering transaction. The representative will make available a prospectus in connection with any
such short sales. Purchasers of shares sold short by the representative are entitled to the same remedies under the federal securities
laws as any other purchaser of shares covered by the registration statement.
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Syndicate covering transactions are bids for or purchases of our securities
on the open market by the representative in order to reduce a short position.
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Penalty bids permit the representative to reclaim a selling concession
from a syndicate member when the shares of Common Stock originally sold by the syndicate member are purchased in a syndicate covering
transaction to cover syndicate short positions.
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If the underwriters commence these activities,
they may discontinue them at any time without notice. The underwriters will carry out any such transactions on Nasdaq Capital Market.
Listing
Our Common Stock is listed on Nasdaq Capital
Market under the symbol “NXTD.”
Electronic Distribution
A prospectus in electronic format may be made
available on websites or through other online services maintained by the underwriters of this offering, or by their affiliates. Other
than the prospectus in electronic format, the information on any underwriters’ website and any information contained in any other
website maintained by an underwriter is not part of this prospectus or the registration statement of which this prospectus forms a part,
has not been approved and/or endorsed by us or the representative in its capacity as an underwriter.
Other Relationships
The representative and its affiliates have engaged
in, and may in the future engage in, investment banking and other commercial dealings in the ordinary course of business with us or our
affiliates. They have received, or may in the future receive, customary fees and commissions for these transactions. In the course of
its businesses, the representative and its affiliates may actively trade our securities or loans for its own account or for the accounts
of customers, and, accordingly, the representative and its affiliates may at any time hold long or short positions in such securities
or loans.
Except for services provided in connection with
this offering, and except as set forth in this section, the representative has not provided any investment banking or other financial
services during the 180-day period preceding the date of this prospectus and we do not expect to retain the representative to perform
any investment banking or other financial services for at least 90 days after the date of this prospectus.
For example, the
representative acted as financial advisor and was paid a fee of $140,000 in connection with the August Offering described below and elsewhere
in this prospectus. On August 13, 2021, we entered into the August Purchase Agreement with the August Investors, providing for an aggregate
investment of $4,000,000 by the August Investors in consideration for the issuance by us to the August Investors of (i) 1,333,333 shares
of our Series F Preferred Stock, and (ii) the August 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 our Common Stock at an exercise price of $0.78 per share, subject to customary
adjustments thereunder.
Selling Restrictions
No action has been taken in any jurisdiction
(except in the United States) that would permit a public offering of our Common Stock or the accompanying Warrants, or the possession,
circulation or distribution of this prospectus or any other material relating to us or our Common Stock or the accompanying Warrants
in any jurisdiction where action for that purpose is required. Accordingly, our Common Stock and or the accompanying Warrants may not
be offered or sold, directly or indirectly, and this prospectus or any other offering material or advertisements in connection with our
securities may be distributed or published, in or from any country or jurisdiction, except in compliance with any applicable rules and
regulations of any such country or jurisdiction.
Notice to Investors
in the United Kingdom
In relation to each Member State of the European
Economic Area which has implemented the Prospectus Directive (each, a “Relevant Member State”) an offer to the public of
any securities which are the subject of the offering contemplated by this prospectus may not be made in that Relevant Member State except
that an offer to the public in that Relevant Member State of any such securities may be made at any time under the following exemptions
under the Prospectus Directive, if they have been implemented in that Relevant Member State:
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(a)
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to legal entities which are authorized or regulated to operate in the
financial markets or, if not so authorized or regulated, whose corporate purpose is solely to invest in securities;
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(b)
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to any legal entity which has two or more of (1) an average of at least
250 employees during the last financial year; (2) a total balance sheet of more than €43,000,000 and (3) an annual net turnover
of more than €50,000,000, as shown in its last annual or consolidated accounts;
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(c)
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by the underwriter to fewer than 100 natural or legal persons (other
than qualified investors as defined in the Prospectus Directive); or
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(d)
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in any other circumstances falling within Article 3(2) of the Prospectus
Directive, provided that no such offer of these securities shall result in a requirement for the publication by the issuer or the
underwriter of a prospectus pursuant to Article 3 of the Prospectus Directive.
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For the purposes of this provision, the expression
an “offer to the public” in relation to any of the securities in any Relevant Member State means the communication in any
form and by any means of sufficient information on the terms of the offer and any such securities to be offered so as to enable an investor
to decide to purchase any such securities, as the same may be varied in that Member State by any measure implementing the Prospectus
Directive in that Member State and the expression” Prospectus Directive” means Directive 2003/71/EC and includes any relevant
implementing measure in each Relevant Member State.
The representative has represented, warranted
and agreed that:
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(a)
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it has only communicated or caused to be communicated and will only
communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section
21 of the Financial Services and Markets Act 2000 (the FSMA)) received by it in connection with the issue or sale of any of the securities
in circumstances in which section 21(1) of the FSMA does not apply to the issuer; and
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(b)
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it has complied with and will comply with all applicable provisions
of the FSMA with respect to anything done by it in relation to the securities in, from or otherwise involving the United Kingdom.
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European Economic Area
In particular, this document does not constitute
an approved prospectus in accordance with European Commission’s Regulation on Prospectuses no. 809/2004 and no such prospectus
is to be prepared and approved in connection with this offering. Accordingly, in relation to each Member State of the European Economic
Area which has implemented the Prospectus Directive (being the Directive of the European Parliament and of the Council 2003/71/EC and
including any relevant implementing measure in each Relevant Member State) (each, a Relevant Member State), with effect from and including
the date on which the Prospectus Directive is implemented in that Relevant Member State (the Relevant Implementation Date) an offer of
securities to the public may not be made in that Relevant Member State prior to the publication of a prospectus in relation to such securities
which has been approved by the competent authority in that Relevant Member State or, where appropriate, approved in another Relevant
Member State and notified to the competent authority in that Relevant Member State, all in accordance with the Prospectus Directive,
except that it may, with effect from and including the Relevant Implementation Date, make an offer of securities to the public in that
Relevant Member State at any time:
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to legal entities which are authorized or regulated to operate in the
financial markets or, if not so authorized or regulated, whose corporate purpose is solely to invest in securities;
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to any legal entity which has two or more of (1) an average of at least
250 employees during the last financial year; (2) a total balance sheet of more than €43,000,000; and (3) an annual net turnover
of more than €50,000,000, as shown in the last annual or consolidated accounts; or
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in any other circumstances which do not require the publication by
the Issuer of a prospectus pursuant to Article 3 of the Prospectus Directive.
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For the purposes of this provision, the expression
an “offer of securities to the public” in relation to any of the securities in any Relevant Member State means the communication
in any form and by any means of sufficient information on the terms of the offer and the securities to be offered so as to enable an
investor to decide to purchase or subscribe for the securities, as the same may be varied in that Member State by any measure implementing
the Prospectus Directive in that Member State. For these purposes the shares offered hereby are “securities.”
DISCLOSURE
OF COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITY
Insofar as indemnification for liabilities arising
under the Securities Act may be permitted to directors, officers or persons controlling the registrant pursuant to the foregoing provisions,
the registrant has been informed that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities
Act and is, therefore, unenforceable
LEGAL MATTERS
The validity of the issuance of the securities
offered hereby will be passed upon for us by Sullivan &Worcester LLP of New York, New York. Certain legal matters in connection with
this offering will be passed on for the underwriters by Gracin & Marlow, LLP, New York, New York.
EXPERTS
The consolidated financial statements of Nxt-ID, Inc.
as of December 31, 2020 and 2019 and for each of the two years then ended incorporated in this prospectus supplement and accompanying
base prospectus by reference to the Annual Report on Form 10-K for the year ended December 31, 2020 have been so incorporated
in reliance on the report of Marcum LLP, an independent registered public accounting firm, given on the authority of said firm as experts
in auditing and accounting.
WHERE YOU CAN FIND MORE
INFORMATION
This prospectus constitutes a part of a registration
statement on Form S-1 filed under the Securities Act. As permitted by the SEC’s rules, this prospectus and any prospectus
supplement, which form a part of the registration statement, do not contain all the information that is included in the registration
statement. You will find additional information about us in the registration statement and its exhibits. Any statements made
in this prospectus or any prospectus supplement concerning legal documents are not necessarily complete and you should read the documents
that are filed as exhibits to the registration statement or otherwise filed with the SEC for a more complete understanding of the document
or matter.
You can read our electronic SEC filings, including
such registration statement, on the internet at the SEC’s website at www.sec.gov. We are subject to the information
reporting requirements of the Exchange Act, and we file reports, proxy statements and other information with the SEC. These reports,
proxy statements and other information will be available at the website of the SEC referred to above. We also maintain a website at www.nxt-id.com,
at which you may access these materials free of charge as soon as reasonably practicable after they are electronically filed with, or
furnished to, the SEC. However, the information contained in or accessible through our website is not part of this prospectus or the
registration statement of which this prospectus forms a part, and investors should not rely on such information in making a decision
to purchase our securities in this offering.
INCORPORATION BY REFERENCE
We incorporate by reference the filed documents
listed below (excluding those portions of any Current Report on Form 8-K that are not deemed “filed” pursuant to the General
Instructions of Form 8-K), except as superseded, supplemented or modified by this prospectus or any subsequently filed document incorporated
by reference herein as described below:
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our Annual Report on Form 10-K
for the fiscal year ended December 31, 2020, filed with the SEC on April 15, 2021;
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our Quarterly Report on Form
10-Q for the quarterly period ended March 31, 2021, filed with the SEC on May 17, 2021;
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our Quarterly Report on Form
10-Q for the quarterly period ended June 30, 2021, filed with the SEC on August 16, 2021;
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our Preliminary Proxy Statement on Schedule
14A for our special meeting of stockholders to be held on September 21, 2021, filed with the SEC on July 23, 2021;
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our Current Reports on Forms 8-K and 8-K/A filed with the SEC
on January
5, 2021, January
8, 2021, January
14, 2021, January
25, 2021, February
1, 2021, February
3, 2021, February
8, 2021, February
9, 2021, May
3, 2021, May
28, 2021, June
17, 2021, June
21, 2021, July
15, 2021, July
21, 2021, August
13, 2021, August
17, 2021 and August
20, 2021; and
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our registration statement on Form 8-A filed
with the SEC on September 9, 2014.
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We also incorporate by reference into this prospectus
additional documents we may file with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act: (i) on or after the date
of the initial filing of the registration statement of which this prospectus is a part and prior to effectiveness of the registration
statement, and (ii) on or after the date of this prospectus but before the completion or termination of this offering (excluding any
information not deemed “filed” with the SEC). Any statement contained in a previously filed document is deemed to be modified
or superseded for purposes of this prospectus to the extent that a statement contained in this prospectus or in a subsequently filed
document incorporated by reference herein modifies or supersedes the statement, and any statement contained in this prospectus is deemed
to be modified or superseded for purposes of this prospectus to the extent that a statement contained in a subsequently filed document
incorporated by reference herein modifies or supersedes the statement.
We will provide, without charge, to each person
to whom a copy of this prospectus is delivered, including any beneficial owner, upon the written or oral request of such person, a copy
of any or all of the documents incorporated by reference herein, but not delivered with such prospectus. Requests should be directed
to:
Nxt-ID, Inc.
288 Christian Street
Hangar C 2nd Floor
Oxford, CT 06478
(203) 266-2103
info@nxt-id.com
Copies of these filings are also available on
our website at www.nxt-id.com. For other ways to obtain a copy of these filings, please refer to “Where You Can
Find More Information” above.
22,462,562 Shares of Common Stock
Warrants to Purchase up to 22,462,562 Shares
of Common Stock
Up to 22,462,562 Shares of Common Stock
underlying Warrants
NXT-ID, INC.
PROSPECTUS
A.G.P.
The date of this prospectus is
, 2021
Through and including
, 2021 (the 25th day after the date of this prospectus), all dealers effecting transactions in these securities, whether
or not participating in this offering, may be required to deliver a prospectus. This is in addition to a dealer’s obligation to
deliver a prospectus when acting as an underwriter and with respect to unsold allotments or subscriptions.
PART II – INFORMATION NOT REQUIRED IN
THE PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution.
The following table sets forth an estimate of
the fees and expenses relating to the issuance and distribution of the securities being registered hereby, all of which shall be borne
by the registrant. All of such fees and expenses, except for the SEC registration and the FINRA filing fee, are estimated:
SEC registration fee
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$
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3,952.15
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FINRA filing fee
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$
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5,933.75
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Transfer agent and registrar fees and expenses
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$
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5,000
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Legal fees and expenses
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$
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200,000
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Printing fees and expenses
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$
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10,000
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Accounting fees and expenses
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$
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50,000
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Miscellaneous fees and expenses
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$
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15,000
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Total
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$
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289,885.90
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Item 14. Indemnification of Directors and
Officers.
Section 145 of the General Corporation Law of
the State of Delaware (the “DGCL”) provides that a Delaware corporation may indemnify any person who was, is or is threatened
to be made, party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of such corporation), by reason of the fact that such person is or was an officer, director,
employee or agent of such corporation or is or was serving at the request of such corporation as a director, officer employee or agent
of another corporation or enterprise. The indemnity may include expenses (including attorneys’ fees), judgments, fines and amounts
paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding, provided such
person acted in good faith and in a manner he reasonably believed to be in or not opposed to the corporation’s best interests and,
with respect to any criminal action or proceeding, had no reasonable cause to believe that his conduct was illegal. A Delaware corporation
may indemnify any person who was, or is, a party to any threatened, pending or completed action or suit by or in the right of the corporation
by reason of the fact that such person is or was a director, officer, employee or agent of such corporation or is or was serving at the
request of such corporation as a director, officer employee or agent of another corporation or enterprise. The indemnity may include
expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection with the defense or settlement
of such action or suit, provided such person acted in good faith and in a manner he reasonably believed to be in or not opposed to the
corporation’s best interests, provided that no indemnification is permitted without judicial approval if the officer, director,
employee or agent is adjudged to be liable to the corporation. Where an officer or director is successful on the merits or otherwise
in the defense of any action referred to above, the corporation must indemnify him against the expenses which such officer or directors
has actually and reasonably incurred. Section 145 of the DGCL further provides that a Delaware corporation may indemnify any other person
who is not a present or former director or officer of such corporation against expenses (including attorneys’ fees) actually and
reasonably incurred by such person to the extent such person has been successful on the merits or otherwise in defense of any action,
suit or proceeding referred to above. Our by-laws in effect provide indemnification to our officers and directors and other specified
persons with respect to their conduct in various capacities to the extent permitted by the DGCL.
Section 145 of the DGCL further authorizes a
corporation to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation
or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation or enterprise,
against any liability asserted against such person and incurred by such person in any such capacity, or arising out of his status as
such, whether or not the corporation would otherwise have the power to indemnify him under Section 145 of the DGCL.
Pursuant
to an employment agreement, dated as of June 8, 2021 and effective as of June 14, 2021, that
we entered into with Chia-Lin Simmons, our Chief Executive Officer (the “Employment
Agreement”), we have agreed to defend, indemnify, and hold Ms. Simmons harmless for
all past or future acts, omissions or decisions made by her in good faith while performing
services for us, and for all necessary expenditures or losses incurred by her in direct consequence
of the discharge of her duties, to the fullest extent permitted by applicable law. Such obligations
extend to claims, allegations, threats, losses, liabilities, causes of action, lawsuits,
proceedings, judgments, fines, penalties, damages, costs and expenses including attorneys’
fees and other legal expenses, made against Ms. Simmons arising out of or related to any
act or omission by or attributable to any of our employees or those of our affiliates, including
but not limited to any individual that previously served as our Chief Executive Officer or
served in such position for our affiliates. Pursuant to the Employment Agreement, we may
satisfy our indemnity obligations thereunder by purchasing directors and officers insurance
coverage that provides the defense and indemnity provisions thereof, including prior acts
of prior directors or officers, and if any carrier reserves its rights to decline coverage,
even while providing a defense, or denies coverage as to any claim, Ms. Simmons has the right
to retain counsel at our or the insurance carrier’s expense. In addition, pursuant
to the Employment Agreement, we have agreed not to settle any claim against Ms. Simmons without
her written consent, which shall not be unreasonably withheld, and any such settlement shall
not include any admission of fault, wrongdoing, or liability by Ms. Simmons. The foregoing
description of the Employment Agreement is not complete and is qualified in its entirety
by reference to the full text of the Employment Agreement, which is attached as Exhibit 10.1
to our Current Report on Form 8-K, filed with the SEC on June 17, 2021.
The indemnification rights set forth above shall
not be exclusive of any other right which an indemnified person may have or hereafter acquire under any by-law provision, agreement,
vote of stockholders or disinterested directors or otherwise, both as to action in such person’s official capacity and as to action
in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, officer, employee,
or agent and shall inure to the benefit of the heirs, executors, and administrators of such person.
We maintain a general liability insurance policy
that covers liabilities of our directors and officers arising out of claims based on acts or omissions in their capacities as our directors
or officers.
See “Item 17. Undertakings” for a
description of the SEC’s position regarding such indemnification provisions.
We plan to enter into an underwriting agreement
that provides that we are to indemnify the underwriters under certain circumstances and the underwriters are obligated, under certain
circumstances, to indemnify our directors, officers and controlling persons against specified liabilities, including liabilities under
the Securities Act.
Item
15. Recent Sales of Unregistered Securities
The following is a summary of all of our securities
sold by us within the past three years which were not registered under the Securities Act of 1933, as amended (the “Securities
Act”):
On September 14, 2018, Nxt-ID, Inc., (the “Company”),
entered into a warrant amendment and exercise Agreement (the “Amendment Agreement”) with certain holders (collectively, the
“September Investors”) of previously issued warrants issued by the Company (the “Old Warrants”). In connection
with those warrants dated July 13, 2017, July 19, 2017, and November 13, 2017, (the “Warrant Agreements”) the Company agreed
to issue to the September Investors new warrants to purchase up to 3,273,601 shares of common stock, par value $0.0001 per share (the
“Common Stock”), at an exercise price of $2.00 per share (the “New Warrants”), subject to the terms of the Amendment
Agreement. In consideration of the September Investors’ exercising up to 3,273,601 of the Old Warrants, the exercise price per
share of the Old Warrants was reduced to $1.50 per share. The September Investors had the option to exercise the Old Warrants after December
31, 2018, but would not be entitled to any New Warrants for any Old Warrants exercised after that date. The exercise price per share
of the New Warrants represented a 30% premium to the closing price for the Common Stock on September 14, 2018. The New Warrants were
issued to the September Investors in a private placement transaction pursuant to an exemption from the registration requirements of the
Securities Act provided in Regulation D promulgated under the Securities Act.
On July 14, 2020, the Company closed a registered
direct offering (the “July Registered Direct Offering”) of (i) an aggregate of 3,778,513 shares (the “Shares”)
of Common Stock; (ii) pre-funded warrants to purchase up to an aggregate of 734,965 shares of Common Stock (the “Pre-Funded Warrant
Shares”) at an exercise price of $0.01 per share, subject to customary adjustments thereunder (the “Pre-Funded Warrants”);
(iii) warrants, with a term of five (5) years exercisable immediately upon issuance, to purchase an aggregate of up to 1,579,718 shares
of Common Stock (the “Registered Warrant Shares”) at an exercise price of $0.50 per share, subject to customary adjustments
thereunder (the “Registered Warrants”); and (iv) warrants, with a term of five and one-half (5.5) years first exercisable
six (6) months after issuance, to purchase an aggregate of up to 3,750,000 shares of Common Stock (the “Unregistered Warrant Shares”)
at an exercise price of $0.65 per share, subject to customary adjustments thereunder (the “Unregistered Warrants”), for gross
proceeds of $1,864,528, before deducting any offering expenses.
The Company entered into a securities purchase
agreement on July 10, 2020 with two accredited investors (“Investors”) providing for the issuance of the Shares, the Pre-Funded
Warrants, the Registered Warrants and the Unregistered Warrants (the “Purchase Agreement”). The Shares, the Pre-Funded Warrants,
the Pre-Funded Warrant Shares, the Registered Warrants and the Registered Warrant Shares were registered under the Securities Act of
1933, as amended (the “Securities Act”), pursuant to a prospectus supplement to the Company’s currently effective registration
statement on Form S-3 (File No. 333-228624), which was initially filed with the SEC on November 30, 2018 and was declared effective on
December 12, 2018 (the “Shelf Registration Statement”). The Company filed the prospectus supplement to the Shelf Registration
Statement with the SEC on July 13, 2020. Pursuant to the Purchase Agreement, the Unregistered Warrants and the Unregistered Warrant Shares
were issued to the Investors in a concurrent private placement transaction pursuant to an exemption from the registration requirements
of the Securities Act provided in Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder.
On December 16, 2020, the Company entered into
a securities purchase agreement (the “December Purchase Agreement”) with two accredited investors (the “December Investors”)
providing for an aggregate investment of $2,000,000 by the December Investors for the issuance by the Company to them of (i) 1,515,151
shares of Series D Convertible Preferred Stock, par value $0.0001 per share, of the Company (the “Series D Preferred Stock”)
convertible into an aggregate of up to 3,030,303 shares of Common Stock that are issuable from time to time upon conversion of such shares
of Series D Preferred Stock (the “Conversion Shares”); (ii) warrants, with a term of five (5) years exercisable immediately
upon issuance, to purchase an aggregate of up to 1,000,000 shares of Common Stock (the “December Registered Warrant Shares”)
at an exercise price of $0.49 per share, subject to customary adjustments thereunder (the “December Registered Warrants”);
and (iii) warrants, with a term of five and one-half (5.5) years first exercisable six (6) months after issuance, to purchase an aggregate
of up to 5,060,606 shares of Common Stock (the “December Unregistered Warrant Shares” and collectively with the December
Registered Warrant Shares, the “December Warrant Shares”) at an exercise price of $0.49 per share, subject to customary adjustments
thereunder (the “December Unregistered Warrants” and collectively with the December Registered Warrants, the “December
Warrants”). Pursuant to the December Purchase Agreement, the December Unregistered Warrants and the December Unregistered Warrant
Shares were issued to the December Investors in a concurrent private placement transaction pursuant to an exemption from the registration
requirements of the Securities Act provided in Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder.
On January 8, 2021, the Company entered into a warrant
amendment and exercise agreement (the “Amendment Agreement”) with a holder (the “Holder”) of a common stock purchase
warrant, dated April 4, 2019, previously issued by the Company to the Holder (the “Original January Warrant”). In consideration
for each exercise of the Original January Warrant that occurred within 45 calendar days of the date of the Amendment Agreement, in addition
to the issuance of the Warrant Shares (as defined in the Original Warrant) on or prior to the Warrant Share Delivery Date (as defined
in the Original Warrant), the Company agreed to deliver to the Holder a new warrant to purchase a number of shares of Common Stock equal
to the number of Original Warrants that the Holder has exercised pursuant to the terms of the Original Warrant, at an exercise price
of $1.525 per share (the “New Warrants”). The Holder was entitled to exercise the Original Warrants after 45 calendar days
of the date of the Amendment Agreement, but would not receive any New Warrants in consideration for the exercise of any Original Warrants
exercised thereafter. The New Warrants were issued to the September Investors in a private placement transaction pursuant to an exemption
from the registration requirements of the Securities Act provided in Regulation D promulgated under the Securities Act.
On February 2, 2021, we closed the February Offering,
which was conducted pursuant to a securities purchase agreement, dated as of January 29, 2021 (the “January Purchase Agreement”),
whereby we issued to certain institutional investors in a registered direct offering (i) an aggregate of 1,476,016 shares of Series E
Convertible Preferred Stock, par value $0.0001 per share, of the Company (the “Series E Preferred Stock”), convertible into
an aggregate of up to 2,952,032 shares of Common Stock, and (ii) common stock purchase warrants exercisable for up to 1,000,000
shares of Common Stock at an exercise price of $1.23 per share, subject to customary adjustments thereunder, which were exercisable immediately
upon issuance and have five year terms. Such registered direct offering closed concurrently with the closing of a private placement transaction
pursuant to which we issued to such investors unregistered warrants to purchase up to an aggregate of 1,952,032 shares of Common Stock
at an exercise price of $1.23 per share, subject to customary adjustments thereunder, which were exercisable immediately upon issuance
and have five year terms. The February Offering resulted in gross proceeds of approximately $4 million, before deducting any offering
expenses, and the net proceeds from the February Offering were used for working capital and liability reduction purposes. Pursuant
to the January Purchase Agreement, such unregistered warrants and the shares of Common Stock underlying such warrants were issued to
such investors in a concurrent private placement transaction pursuant to an exemption from the registration requirements of the Securities
Act provided in Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder
In connection with our entry into an employment
agreement, effective June 14, 2021, with Chia-Lin Simmons and as a material inducement to Ms. Simmons’s acceptance of employment
with the Company as its Chief Executive Officer, the Company offered Ms. Simmons shares of restricted stock of the Company equal to 5%
of the issued and outstanding shares of Common Stock, which issuance was approved by the compensation committee of the Company’s
board of directors and occurred in accordance with Nasdaq Listing Rule 5635(c)(4) outside of the Company’s 2017 Stock Incentive
Plan and 2013 Long-Term Stock Incentive Plan. In connection with such issuance, the Company and Ms. Simmons have entered into a Restricted
Stock Award Agreement on June 14, 2021, which agreement contemplates the restricted shares vesting over a 48-month period commencing
on June 14, 2021. One fourth of such shares will vest on June 14, 2022. Thereafter, 1/36 of such shares will vest on the first day of
each subsequent month until all such shares have vested.
On August 16, 2021, we closed a private placement
offering (the “August Offering”), which was conducted pursuant to a securities purchase agreement, dated as of August 13,
2021, (the “August Purchase Agreement”), whereby we issued to certain institutional investors (i) an aggregate of 1,333,333
shares of Series F Convertible Preferred Stock, par value $0.0001 per share (the “Series F Preferred Stock”), convertible
into an aggregate of up to 10,666,664 shares of Common Stock, assuming a conversion price of $0.375 per share, and (ii) warrants
exercisable for up to 6,666,665 shares of Common Stock at an exercise price of $0.78 per share, subject to customary adjustments thereunder,
which are exercisable on February 16, 2022 and have terms of five and a half (5.5) years. The August Offering resulted in gross proceeds
of approximately $4 million, before deducting any offering expenses. Pursuant to the August Purchase Agreement, such unregistered warrants,
shares of Series F Preferred Stock and the shares of Common Stock underlying such securities were issued to such investors in a private
placement transaction pursuant to an exemption from the registration requirements of the Securities Act provided in Section 4(a)(2) of
the Securities Act and/or Regulation D promulgated thereunder. As of the date of this registration statement, holders of an aggregate
of 993,333 shares of Series F Preferred Stock converted such shares into an aggregate of 5,445,009 shares of Common Stock, assuming a
conversion price of $0.54729 per share. We issued such shares of Common Stock to such holders in a private placement transaction pursuant
to an exemption from the registration requirements of the Securities Act provided in Section 3(a)(9) of the Securities Act, as the Common
Stock was issued to existing stockholders and no remuneration was provided in consideration of the issuance.
With respect to the availability of an exemption
from registration, relating to the sale and unregistered issuances of such securities described above, we made these determinations
based on the representations of each investor which included, in pertinent part, that each such investor was either (a) an “accredited
investor” within the meaning of Rule 501 of Regulation D or (b) a “qualified institutional buyer” within the meaning
of Rule 144A under the Securities Act and upon such further representations from each investor that (i) such investor acquired the securities
for his, her or its own account for investment and not for the account of any other person and not with a view to or for distribution,
assignment or resale in connection with any distribution within the meaning of the Securities Act, (ii) such investor agreed not to sell
or otherwise transfer the purchased securities unless they are registered under the Securities Act and any applicable state securities
laws, or an exemption or exemptions from such registration are available, (iii) such investor had knowledge and experience in financial
and business matters such that he, she or it was capable of evaluating the merits and risks of an investment in us, (iv) such investor
had access to all of our documents, records, and books pertaining to the investment and was provided the opportunity to ask questions
and receive answers regarding the terms and conditions of the offering and to obtain any additional information which we possessed or
were able to acquire without unreasonable effort and expense, and (v) such investor had no need for the liquidity in its investment in
us and could afford the complete loss of such investment. In addition, there was no general solicitation or advertising for securities
issued in reliance upon these exemptions.
Item 16. Exhibits.
The list of exhibits in the Exhibit Index to
this registration statement is incorporated herein by reference.
Item 17. Undertakings.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers
or sales are being made, a post-effective amendment to this registration statement:
i. To include any prospectus
required by section 10(a)(3) of the Securities Act of 1933;
ii. To reflect in the prospectus
any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding
the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed
that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the
form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more
than 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective
registration statement.
iii. To include any material
information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to
such information in the registration statement;
provided, however, that the undertakings set
forth in paragraphs (1)(i), (1)(ii) and (1)(iii) above do not apply if the information required to be included in a post-effective amendment
by those paragraphs is contained in reports filed with or furnished to the Securities and Exchange Commission by the registrant pursuant
to Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended, that are incorporated by reference in this
registration statement or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of this registration statement.
(2) That, for the purpose of determining any
liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(4) That, for the purpose of determining liability
under the Securities Act of 1933, as amended, to any purchaser:
i. Each prospectus filed
by the registrant pursuant to Rule 424 (b)(3) shall be deemed to be part of this registration statement as of the date the filed prospectus
was deemed part of and included in this registration statement;
ii. Each prospectus required
to be filed pursuant to Rule 424 (b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an
offering made pursuant to Rule 415(a)(1)(i), (vii) or (x) for the purpose of providing the information required by Section 10(a)
of the Securities Act of 1933, as amended, shall be deemed to be part of and included in the registration statement as of the earlier
of the date such prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering
described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter,
such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement
to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering
thereof; provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement
or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of
the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify
any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such
document immediately prior to such effective date; and
iii. Each prospectus filed
pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule
430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement
as of the date it is first used after effectiveness; provided, however, that no statement made in a registration statement or prospectus
that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration
statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such
first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration
statement or made in any such document immediately prior to such date of first use.
(5) That, for the purpose of determining liability
of the registrant under the Securities Act of 1933, as amended, to any purchaser in the initial distribution of the securities, the undersigned
registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement,
regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser
by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered
to offer or sell such securities to such purchaser:
i. Any preliminary prospectus
or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;
ii. Any free writing prospectus
relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;
iii. The portion of any other
free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided
by or on behalf of the undersigned registrant; and
iv. Any other communication
that is an offer in the offering made by the undersigned registrant to the purchaser.
(6) That, for purposes of determining any liability
under the Securities Act of 1933, as amended, each filing of the registrant’s annual report pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934, as amended (and, where applicable, each filing of an employee benefit plan’s annual
report pursuant to Section 15(d) of the Securities Exchange Act of 1934, as amended) that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(7) Insofar as indemnification for liabilities
arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to
the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification
by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities
Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Oxford, in the State of Connecticut on September 13, 2021.
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NXT-ID, INC.
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By:
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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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KNOW ALL MEN BY THESE PRESENTS, that each person
whose signature appears below constitutes and appoints Chia-Lin Simmons, his or her true and lawful attorney-in-fact and agent with full
power of substitution and re-substitution, for him or her and in his or her name, place and stead, in any and all capacities to sign
any or all amendments (including, without limitation, post-effective amendments) to this registration statement, any related registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933 and any or all pre- or post-effective amendments thereto, and
to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorney-in-fact and agent, full power and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully for all intents and purposes as he or she might or could do in person, hereby
ratifying and confirming that said attorney-in-fact and agent, or any substitute or substitutes for her, may lawfully do or cause to
be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, the following persons in the capacities and on
the dates indicated have signed this registration statement below.
Signature
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Title
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Date
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/s/ Chia-Lin Simmons
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Chief Executive Officer and
Director
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September 13, 2021
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Chia-Lin Simmons
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(Principal Executive Officer)
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/s/ Mark Archer
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Interim Chief Financial Officer
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September 13, 2021
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Mark Archer
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(Principal Financial and Accounting Officer)
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/s/ Major General David R. Gust, USA, Ret.
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Director
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September 13, 2021
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Major General David R. Gust, USA, Ret.
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/s/ Michael J. D’Almada-Remedios, PhD
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Director
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September 13, 2021
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Michael J. D’Almada-Remedios, PhD
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/s/ Daniel P. Sharkey
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Director
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September 13, 2021
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Daniel P. Sharkey
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/s/ Robert A. Curtis, Pharm.D.
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Director
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September 13, 2021
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Robert A. Curtis, Pharm.D.
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EXHIBIT INDEX
Exhibit No.
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Description
of Exhibit
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1.1*
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Form of Underwriting Agreement
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2.1
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Agreement
and Plan of Merger by and among Nxt-ID, Inc., Fit Merger Sub, Inc., Fit Pay, Inc. and Michael Orlando (17)
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3.1(i)
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Certificate
of Incorporation, as amended (1)
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3.1(i)(a)
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Certificate
of Amendment to Certificate of Incorporation (13)
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3.1(i)(b)
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Certificate
of Designations of Series A Convertible Preferred Stock (9)
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3.1
(i)(c)
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Amendment
of Certificate of Designations of Series A Convertible Preferred Stock (11)
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3.1(i)(d)
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Second
Certificate of Amendment of Designations of Series A Convertible Preferred Stock (12)
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3.1(i)(e)
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Certificate
of Designations for Series B Convertible Preferred Stock (12)
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3.1(i)(f)
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Certificate
of Designations for Series C Non-Convertible Preferred Stock (17)
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3.1(i)(g)
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Certificate
of Designations for Series D Convertible Preferred Stock (27)
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3.1(i)(h)
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Amended
and Restated Certificate of Designations for Series D Convertible Preferred Stock (27)
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3.1(i)(i)
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Form
of Elimination of Amended and Restated Certificate of Designations for Series D Convertible Preferred Stock (28)
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3.1(i)(j)
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Certificate
of Designations for Series E Convertible Preferred Stock (28)
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3.1(i)(k)
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Form
of Certificate of Designations for Series F Convertible Preferred Stock (40)
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3.1(i)(l)
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Elimination
of Certificate of Designations for Series E Convertible Preferred Stock (41)
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3.1(ii)
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By-laws
(1)
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4.1
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Form
of Warrant for January 2014 Offering (2)
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4.2
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Form
of Agent Warrant for January 2014 Offering (2)
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4.3
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Form
of Warrant for June 2014 and August 2014 Offerings (4)
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4.4
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Form
of Warrant for September 2014 Offering (5)
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4.5
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Form
of Underwriter Warrant for September 2014 Offering (5)
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4.6
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Form
of Class A Warrant (6)
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4.7
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Form
of Class B Warrant (6)
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4.8
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Form
of Warrant for July 2015 Private Placement (7)
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4.9
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Form
of Warrant for December 2015 Agreement with WorldVentures Holdings, LLC (8)
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4.10
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Form
of Warrant for May 2016 Interest Purchase Agreement with LogicMark, LLC (10)
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4.11
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Form
of Warrant for July 2016 Private Placement (12)
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4.12
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Form
of Seller’s Note for July 2016 LogicMark, LLC Acquisition (12)
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4.13
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Form
of Warrant for November 2016 Agreement with LogicMark, LLC (15)
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4.14
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Form
of November 2016 Exchange Note (15)
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4.15
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Form
of Pre-Funded Warrant for July 2017 Public Offering (18)
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4.16
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Form
of Purchase Warrant for July 2017 Private Placement (18)
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4.17
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Form
of July 2017 Exchange Note (19)
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4.18
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Form
of Warrant for July 2017 Exchange (19)
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4.19
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Form
of Warrant for November 2017 Private Placement (20)
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4.20
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Form of Warrant to Sagard Credit Partners, LP (23)
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4.21
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Form
of September 2018 New Warrant (25)
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4.22
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Form
of Warrant Amendment and Exercise Agreement (25)
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4.23
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Form
of Pre-Funded Warrant for July 2020 Private Placement (30)
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4.24
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Form
of Registered Warrant for July 2020 Private Placement (30)
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4.25
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Form
of Unregistered Warrant for July 2020 Private Placement (30)
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4.26
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Form
of Registered Warrant for December 2020 Private Placement (27)
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4.27
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Form
of Unregistered Warrant for December 2020 Private Placement (27)
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4.28
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Form
of New Warrant (33)
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4.29
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Form
of Series E Convertible Preferred Stock Certificate (28)
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4.30
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Form of Registered Warrant for February 2021 Private Placement (28)
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4.31
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Form
of Unregistered Warrant for February 2021 Private Placement (28)
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4.32
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Form
of Unregistered Warrant for August 2021 Private Placement (40)
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4.33*
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Form of Warrant
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5.1**
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Opinion of Sullivan & Worcester LLP
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10.1†
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2013
Long Term Incentive Plan (1)
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10.2†
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Forms
of Agreement Under 2013 Long Term Incentive Plan (1)
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10.3†
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2017
Stock Incentive Plan (24)
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10.4†
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Employment
Agreement Between Nxt-ID and Gino Pereira (3)
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10.5†
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Employment
Agreement Between Nxt-ID and Michael J. Orlando (22)
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10.6
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License
Agreement between 3D-ID, LLC and Genex Technologies (1)
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10.7
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Purchase
Agreement between 3D-ID, LLC and Nxt-ID, Inc. (1)
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10.8
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Form
of Warrant Purchase Agreement for July 2015 Private Placement (7)
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10.9
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Form
of Securities Purchase Agreement for December 2015 Agreement with WorldVentures Holdings, LLC (8)
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10.10
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Form
of Interest Purchase Agreement for May 2016 Agreement with LogicMark, LLC (10)
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10.11
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Form
of First Amendment to Interest Purchase Agreement for May 2016 Agreement with LogicMark, LLC (11)
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10.12
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Form
of Security Agreement for July 2016 Agreement with LogicMark, LLC (12)
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10.13
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Form
of Loan and Security Agreement for July 2016 Agreement with ExWorks Capital Fund I, L.P. (12)
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10.14
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Form
of Subordination Agreement for July 2016 Agreement with LogicMark, LLC (12)
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10.15
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Form
of Securities Purchase Agreement for July 2016 Agreement with LogicMark, LLC (12)
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10.16
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Form
of Registration Rights Agreement for July 2016 Agreement with LogicMark, LLC (12)
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10.17
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Form
of Forbearance Agreement between Nxt-ID and LogicMark Investment Partners, LLC (14)
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10.18
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Form
of Exchange Agreement for November 2016 Agreement with LogicMark, LLC (15)
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10.19
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Form
of Intercreditor Agreement for November 2016 Agreement with LogicMark, LLC (15)
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10.20
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First
Amendment to Forbearance Agreement for November 2016 Agreement with LogicMark, LLC (15)
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10.21
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Form
of Letter Agreement with July 2016 Investors (16)
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10.22
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Form
of Placement Agency Agreement for July 2017 Offering (18)
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10.23
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Form
of Securities Purchase Agreement for July 2017 Offering (18)
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10.24
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Form
of July 2017 Exchange Agreement (19)
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10.25
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Form
of July 2017 Assignment and Assumption Agreement (19)
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10.26
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Form
of Placement Agency Agreement for November 2017 Offering (20)
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10.27
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Form
of Securities Purchase Agreement for November 2017 Offering (20)
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10.28
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Form
of Placement Agency Agreement for December 2017 Offering (21)
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10.29
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Form
of Securities Purchase Agreement for December 2017 Offering (21)
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10.30
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Senior
Secured Credit Agreement, dated May 24, 2018, with Sagard Holdings Manager, LP (23)
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10.31
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Security
Agreement, dated May 24, 2018, with Sagard Holdings Manager, LP (23)
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10.32
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Intellectual
Property Security Agreement, dated May 24, 2018, with Sagard Holdings Manager, LP (23)
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10.33
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Pledge
Agreement, dated May 24, 2018, with Sagard Holdings Manager, LP (23)
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10.34
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Guaranty,
dated May 24, 2018, with Sagard Holdings Manager, LP (23)
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10.35
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Paycheck
Protection Program Promissory Note and Agreement, dated May 1, 2020, by and between Bank of America, NA and LogicMark, LLC (29)
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10.36
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Paycheck
Protection Program Promissory Note and Agreement, dated May 1, 2020, by and between Bank of America, NA and Nxt-ID, Inc. (29)
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10.37
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Form
of Securities Purchase Agreement for July 2020 Offering (30)
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10.38
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LogicMark
Senior Secured Credit Agreement, dated May 3, 2019, (31)
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10.39
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LogicMark,
LLC Security Agreement, dated May 3, 2019 (31)
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10.40
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LogicMark,
LLC Securities Pledge Agreement, dated May 3, 2019 (31)
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10.41
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LogicMark,
LLC Intellectual Property Security Agreement, dated May 3, 2019 (31)
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10.42
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Guaranty,
dated May 3, 2019 (31)
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10.43
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First
Amendment to Senior Secured Credit Agreement, dated as of November 16, 2020 (32)
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10.44
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Form
of Securities Purchase Agreement for December 2020 Offering (27)
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10.45
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Form
of Warrant Amendment and Exercise Agreement, dated January 8, 2021 (33)
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10.46†
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Employment
Agreement by and between the Company and Vincent S. Miceli, dated as of January 8, 2021 (34)
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10.47
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Form
of Securities Purchase Agreement for February 2021 Offering (28)
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10.48
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Second
Amendment to Senior Secured Credit Agreement, dated as of February 8, 2021 (35)
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10.49
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Lease
Agreement by and between LogicMark LLC and Moorman Properties LLC (36)
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10.50†
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Employment
Agreement by and between the Company and Chia-Lin Simmons, dated as of June 8, 2021 (37)
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10.51
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Settlement
Agreement, effective August 11, 2021, by and between the Company and GDMSAI (38)
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10.52†
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Consulting
Agreement, dated as of July 15, 2021, by and between the Company and FLG Partners (39)
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10.53
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Letter
Agreement, signed on August 9, 2021, and effective as of August 1, 2021, by and between the Company and Vincent S. Miceli (39)
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10.54
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Form
of Securities Purchase Agreement for August 2021 Offering (40)
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10.55*
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Form of Voting Agreement
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14.1
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Code
of Ethics (3)
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21.1
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List
of Subsidiaries (26)
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23.1*
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Consent of Marcum LLP
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23.2**
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Consent of Sullivan & Worcester LLP (included in Exhibit 5.1)
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24.1*
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Power of Attorney (included on the signature page of this registration statement)
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*
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Filed herewith.
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**
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Previously filed.
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†
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Management contract or compensatory plan or
arrangement.
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(1)
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Filed as an
Exhibit to the Company’s Registration Statement on Form S-1 (File No. 333-184673) with the SEC on January 31, 2013.
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(2)
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Filed as an Exhibit to
the Company’s Current Report on Form 8-K with the SEC on January 17, 2014.
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(3)
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Filed as an Exhibit to
the Company’s Annual Report on Form 10-K with the SEC on February 25, 2014.
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(4)
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Filed as an Exhibit
to the Company’s Registration Statement on Form S-1 (File No. 333-197845) with the SEC on August 5, 2014.
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(5)
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Filed as Exhibit to
the Company’s Registration Statement on Form S-1 (File No. 333-197845) with the SEC on August 14, 2014.
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(6)
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Filed as an Exhibit
to the Company’s Current Report on Form 8-K with the SEC on April 24, 2015.
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(7)
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Filed as an Exhibit
to the Company’s Current Report on Form 8-K with the SEC on July 30, 2015.
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(8)
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Filed as an Exhibit
to the Company’s Current Report on Form 8-K with the SEC on January 4, 2016.
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(9)
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Filed as an Exhibit
to the Company’s Current Report on Form 8-K with the SEC on April 12, 2016.
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(10)
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Filed as an Exhibit
to the Company’s Current Report on Form 8-K with the SEC on May 20, 2016.
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(11)
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Filed as an Exhibit
to the Company’s Current Report on Form 8-K with the SEC on July 7, 2016.
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(12)
|
Filed as an Exhibit
to the Company’s Current Report on Form 8-K with the SEC on July 27, 2016.
|
(13)
|
Filed as an Exhibit
to the Company’s Current Report on Form 8-K with the SEC on September 12, 2016.
|
(14)
|
Filed as an Exhibit
to the Company’s Current Report on Form 8-K with the SEC on September 26, 2016.
|
(15)
|
Filed as an Exhibit
to the Company’s Current Report on Form 8-K with the SEC on November 30, 2016.
|
(16)
|
Filed as an Exhibit
to the Company’s Current Report on Form 8-K with the SEC on February 10, 2017.
|
(17)
|
Filed as an Exhibit
to the Company’s Current Report on Form 8-K with the SEC on May 30, 2017.
|
(18)
|
Filed as an Exhibit
to the Company’s Current Report on Form 8-K with the SEC on July 10, 2017.
|
(19)
|
Filed as an Exhibit
to the Company’s Current Report on Form 8-K with the SEC on July 20, 2017.
|
(20)
|
Filed as an Exhibit
to the Company’s Current Report on Form 8-K with the SEC on November 9, 2017.
|
(21)
|
Filed as an Exhibit
to the Company’s Current Report on Form 8-K with the SEC on December 21, 2017.
|
(22)
|
Filed as an Exhibit
to the Company’s Annual Report on Form 10-K with the SEC on April 2, 2018.
|
(23)
|
Filed as an Exhibit
to the Company’s Current Report on Form 8-K with the SEC on May 30, 2018.
|
(24)
|
Filed as an Exhibit
to the Company’s Registration Statement on Form S-1 (File No. 333-226116) with the SEC on July 10, 2018.
|
(25)
|
Filed as an Exhibit
to the Company’s Current Report on Form 8-K with the SEC on September 20, 2018.
|
(26)
|
Filed as an Exhibit
to the Company’s Annual Report on Form 10-K with the SEC on March 30, 2020.
|
(27)
|
Filed as an Exhibit
to the Company’s Current Report on Form 8-K with the SEC on December 18, 2020.
|
(28)
|
Filed as an Exhibit
to the Company’s Current Report on Form 8-K with the SEC on February 1, 2021.
|
(29)
|
Filed as an Exhibit
to the Company’s Current Report on Form 8-K with the SEC on May 12, 2020.
|
(30)
|
Filed as an Exhibit
to the Company’s Current Report on Form 8-K/A with the SEC on July 13, 2020.
|
(31)
|
Filed as an Exhibit
to the Company’s Quarterly Report on Form 10-Q with the SEC on May 15, 2019.
|
(32)
|
Filed as an Exhibit
to the Company’s Quarterly Report on Form 10-Q with the SEC on November 16, 2020.
|
(33)
|
Filed as an Exhibit
to the Company’s Current Report on Form 8-K with the SEC on January 8, 2021.
|
(34)
|
Filed as an Exhibit
to the Company’s Current Report on Form 8-K with the SEC on January 14, 2021.
|
(35)
|
Filed as an Exhibit
to the Company’s Current Report on Form 8-K with the SEC on February 8, 2021.
|
(36)
|
Filed as an Exhibit
to the Company’s Annual Report on Form 10-K with the SEC on April 15, 2021.
|
(37)
|
Filed as an Exhibit
to the Company’s Current Report on Form 8-K with the SEC on June 17, 2021.
|
(38)
|
Filed as an Exhibit
to the Company’s Current Report on Form 8-K with the SEC on August 13, 2021.
|
(39)
|
Filed as an Exhibit
to the Company’s Quarterly Report on Form 10-Q with the SEC on August 16, 2021.
|
(40)
|
Filed as an Exhibit
to the Company’s Current Report on Form 8-K with the SEC on August 17, 2021.
|
(41)
|
Filed as an Exhibit
to the Company’s Current Report on Form 8-K with the SEC on August 20, 2021.
|
II-9
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