Item 1.01 Entry into a Material Definitive Agreement.
On January 8, 2021, Nxt-ID, Inc., a Delaware corporation (the "Company"),
entered into a Warrant Amendment and Exercise Agreement (the "Amendment
Agreement") with holders (the "Holder") of a common stock purchase warrant,
dated April 4, 2019, previously issued by the Company to the Holder (the
"Original Warrant").
In consideration for each exercise of the Original Warrant that occurs 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 has agreed to deliver to the Investor a new warrant to purchase a number
of shares of the Company's common stock, par value $0.0001 per share (the
"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, which represents the average Nasdaq Official Closing Price of
the Common Stock (as reflected on Nasdaq.com) for the five trading days
immediately preceding the date of the Amendment Agreement (the "New Warrants").
The Investor currently holds Original Warrants exercisable for up to 2,469,136
shares of Common Stock, and, therefore, may receive up to an equivalent number
of New Warrants. The Investor may continue to exercise the Original Warrants
after 45 calendar days of the date of the Amendment Agreement, but the Investor
will not receive any New Warrants in consideration for the exercise of any
Original Warrants exercised thereafter.
The Amendment Agreement contains customary representations, warranties and
covenants by each of the Company and the Investor.
The New Warrants, if issued, are exercisable for up to the original expiration
dates of the Original Warrants, which is April 4, 2024. The exercise price and
number of shares issuable upon exercise of the New Warrants are subject to
traditional adjustment for stock splits, combinations, recapitalization events
and certain dilutive issuances. The New Warrants are required to be exercised
for cash; however, if during the term of the New Warrants there is not an
effective registration statement under the Securities Act of 1933, as amended
(the "Securities Act"), covering the resale of the shares of Common Stock
issuable upon exercise of the New Warrants, then the New Warrants may be
exercised on a cashless (net exercise) basis pursuant to the formula provided in
the New Warrants.
The Company intends to use the proceeds of any exercise of the Original Warrants
for working capital purposes, the launch of new products and to reduce its debt
outstanding.
Item 3.02 Unregistered Sales of Equity Securities.
The disclosure set forth in Item 1.01 of this Current Report on Form 8-K is
incorporated herein by reference into this Item 3.02 in its entirety. The
Company is issuing the New Warrants and will issue the shares of Common Stock
issuable upon exercise of the New Warrants, in each case in reliance upon the
exemption from registration contained in Section 4(a)(2) of the Securities Act
or Rule 506 promulgated thereunder. The New Warrants sold, or any shares of
Common Stock issued upon the exercise of the New Warrants, may not be offered or
sold in the United States absent registration or an applicable exemption from
registration requirements.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
4.1 Form of New Warrant
10.1 Form of Amendment Agreement
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