☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______________ to ______________ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: June 30, 2021 or Commission File Number: 001-36616 Delaware 46-0678374 (State or other jurisdiction of incorporation or organization) (I.R.S. ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 001-36616 (State or other jurisdiction of incorporation or organization) Delaware 46-0678374 (I.R.S. Employer Identification No.) 288 Christian Street Hangar C 2 Floor Oxford, CT 06478 (Address of principal executive offices)(Zip Code) (203) 266-2103 For the quarterly period ended: March 31, 2021 or ☐ TR ...

Part I [Business Overview](index=5&type=section&id=Item%201.%20Business) Nxt-ID provides technology products and services for healthcare applications, focusing on access control, biometrics, security, and sensor technologies - Nxt-ID focuses on healthcare technology products and services, covering **biometrics, security, and sensor technologies**[16](index=16&type=chunk)[42](index=42&type=chunk) - Wholly-owned subsidiary LogicMark is a manufacturer and distributor of Personal Emergency Response Systems (PERS), sold through dealers, distributors, and the U.S. Department of Veterans Affairs (VA)[17](index=17&type=chunk)[43](index=43&type=chunk)[305](index=305&type=chunk) - The company sold its payment credential management business, Fit-Pay, for **$3.32 million in cash** on September 9, 2019[34](index=34&type=chunk)[306](index=306&type=chunk) [Company Overview](index=5&type=section&id=1.1%20Company%20Overview) - Nxt-ID, founded on February 8, 2012, is a security technology company specializing in hardware and software security systems for the security, healthcare, fintech, and IoT markets[42](index=42&type=chunk)[304](index=304&type=chunk) Employee Count (as of April 14, 2021) | Department | Number of Employees | | :--- | :--- | | Product Engineering | 3 | | Finance & Administration | 2 | | Sales & Customer Service | 10 | | Product Fulfillment | 4 | | **Total** | **19** | [Healthcare Business](index=5&type=section&id=1.2%20Healthcare%20Business) - LogicMark's healthcare business is driven by four major trends: increased demand for connected devices, growth in TeleHealth, rising healthcare costs, and labor shortages in the home healthcare industry[18](index=18&type=chunk) - LogicMark differentiates itself by offering **"no monthly fee" PERS products** that directly contact family, friends, or 911, providing a more cost-effective solution than traditional monitoring services[25](index=25&type=chunk)[26](index=26&type=chunk) - The company plans to expand LogicMark's business by broadening distribution channels, developing next-generation PERS devices with enhanced features and clinical monitoring capabilities, and entering retail and institutional/senior living markets with new products like Notifi911+[31](index=31&type=chunk)[33](index=33&type=chunk) Global PERS Market Growth Forecast | Metric | Value | | :--- | :--- | | Projected CAGR (2020-2028) | 5.8% | | Projected Market Size (2028) | $4.5 billion | | North America Market Share (2028) | 37% | | Asia Market Share (2028) | 31% | | Europe Market Share (2028) | 24% | LogicMark Product Overview | Product | Key Features | Channels | | :--- | :--- | :--- | | Guardian Alert | Two-way voice call to 911 (cordless pendant), 600 ft range, rechargeable pendant battery, no monthly fees | VA, Distributors/Dealers, Direct | | Guardian Alert 911 Plus | Mobile PERS (mPERS) device, two-way voice call to 911, monitored rechargeable battery (6-9 month standby), no monthly fees | VA, Distributors/Dealers, Direct | | Freedom Alert | Two-way voice call to 4 preset contacts (optional 911), 600 ft range, no monthly fees | VA, Distributors/Dealers, Direct | | Notifi 911 | Cellular system (AT&T network), two-way voice call to 911, monitored rechargeable battery (3-6 month standby), no monthly fees | Retail, Direct | [Intellectual Property](index=9&type=section&id=1.3%20Intellectual%20Property) - Nxt-ID primarily relies on patent and trade secret laws, along with confidentiality procedures, to protect its proprietary information and currently holds **19 issued patents**[35](index=35&type=chunk)[38](index=38&type=chunk) - Patents cover areas such as multi-factor authentication, identity verification, wearable accessory enhancement, electronic metric authentication, preference-driven advertising, and event and fall detection systems[35](index=35&type=chunk)[36](index=36&type=chunk)[37](index=37&type=chunk) - The company faces risks of third-party intellectual property infringement claims, which could result in costly defense, product redesign, or licensing needs, materially and adversely affecting its business and financial condition[39](index=39&type=chunk)[41](index=41&type=chunk) [Risk Factors](index=14&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks related to revenue uncertainty, IT security, supply chain, competition, capital needs, and the COVID-19 pandemic - The company's ability to generate sufficient revenue and achieve profitability is uncertain, with a **net loss of $2,864,984 in 2020** and a working capital deficit of $578,797 as of December 31, 2020[48](index=48&type=chunk)[49](index=49&type=chunk) - Significant risks include **IT system disruptions, security breaches**, reliance on a Chinese supply chain affected by U.S.-China relations, and failure to keep pace with rapid technological changes and consumer preferences[50](index=50&type=chunk)[51](index=51&type=chunk)[53](index=53&type=chunk)[54](index=54&type=chunk) - The **COVID-19 pandemic led to a significant reduction in product orders** and impaired collection capabilities, with potential for continued adverse impacts on business and financial results[72](index=72&type=chunk) - The company is involved in litigation with Fit Pay shareholders over contingent earn-out payments and with GDMSAI over Series C preferred stock dividends, which could result in substantial damages if lost[74](index=74&type=chunk)[76](index=76&type=chunk) - The company's common stock price is highly volatile, and due to its small size and lack of profitability, it faces a **risk of delisting from Nasdaq**, which would reduce stock liquidity and increase financing difficulty[100](index=100&type=chunk)[105](index=105&type=chunk)[109](index=109&type=chunk) [Risks Relating to Our Business](index=14&type=section&id=1.5%20Risks%20Relating%20to%20Our%20Business) - The company reported a **net loss of $2,864,984 in 2020** and a working capital deficit of $578,797 as of December 31, 2020, creating uncertainty about future revenue generation and profitability[48](index=48&type=chunk)[49](index=49&type=chunk) - **Disruptions or security breaches of IT systems** could lead to the loss, misuse, or unauthorized access of confidential information, adversely affecting business operations, reputation, and financial condition[50](index=50&type=chunk)[51](index=51&type=chunk)[52](index=52&type=chunk) - The **Chinese supply chain is vulnerable to changes in U.S.-China trade policy**, which could materially and adversely affect the business and financial condition[53](index=53&type=chunk) - Failure to keep pace with rapidly changing industry technology and consumer preferences, along with a lack of sufficient financial resources in a competitive market, could place the company at a **competitive disadvantage**[54](index=54&type=chunk)[57](index=57&type=chunk)[58](index=58&type=chunk) - The company may be unable to obtain additional capital to fund R&D and business expansion, potentially impairing the business or resulting in a loss of investment value[56](index=56&type=chunk) - The **COVID-19 pandemic caused a significant reduction in product orders in 2020**, impaired collection capabilities, and may continue to adversely affect the business, financial condition, and results of operations[72](index=72&type=chunk) - The company is currently involved in two lawsuits: one regarding contingent earn-out payments to Fit Pay shareholders and another concerning Series C preferred stock dividends with GDMSAI, which could result in substantial damages if lost[74](index=74&type=chunk)[76](index=76&type=chunk) [Risks Related to Our Biometric Recognition Applications and Related Products](index=24&type=section&id=1.6%20Risks%20Related%20to%20Our%20Biometric%20Recognition%20Applications%20and%20Related%20Products) - The company's biometric products may not achieve broad commercial consumer and market acceptance, as the demand for this level of security is uncertain[92](index=92&type=chunk) - The biometric recognition industry is characterized by rapid technological change, and a failure to respond in a timely manner could render the company's biometric applications obsolete or less competitive[93](index=93&type=chunk) - The market for biometric applications is highly competitive, with many competitors possessing substantially greater financial, technical, and marketing resources than the company[96](index=96&type=chunk) [Risks Related to Our Securities](index=25&type=section&id=1.7%20Risks%20Related%20to%20Our%20Securities) - The market price of the company's common stock is highly volatile, primarily due to its small size, limited public float, and lack of profitability, which can lead to significant price fluctuations[100](index=100&type=chunk)[101](index=101&type=chunk)[103](index=103&type=chunk) - If the company fails to comply with Nasdaq's continued listing requirements, such as the minimum bid price rule, its **common stock could be delisted**, reducing market liquidity and making it harder to raise capital[105](index=105&type=chunk)[106](index=106&type=chunk)[107](index=107&type=chunk)[109](index=109&type=chunk) - Future financing or strategic alliances through the issuance of equity or equity-related securities could result in **significant dilution** to existing stockholders' investments[104](index=104&type=chunk)[114](index=114&type=chunk) - The company does not intend to pay dividends in the foreseeable future, meaning stockholders' return on investment will depend solely on stock price appreciation[115](index=115&type=chunk)[116](index=116&type=chunk) [Unresolved Staff Comments](index=31&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company has no unresolved staff comments - The company has no unresolved staff comments[120](index=120&type=chunk) [Properties](index=31&type=section&id=Item%202.%20Properties) Nxt-ID leases office spaces in Oxford, CT, and Palm Bay, FL, on a month-to-month basis, while its subsidiary LogicMark leases office and warehouse space in Louisville, KY, under a five-year term - Nxt-ID leases its principal executive offices in Oxford, CT ($1,925/month) and office space in Palm Bay, FL ($1,987/month), both on a month-to-month basis[121](index=121&type=chunk)[122](index=122&type=chunk) - LogicMark leases office and warehouse space in Louisville, KY, under a five-year lease expiring in August 2025, with a current monthly rent of $6,000, and subleases 2,000 sq ft for $1,000 per month[123](index=123&type=chunk) [Legal Proceedings](index=31&type=section&id=Item%203.%20Legal%20Proceedings) Nxt-ID is involved in two primary legal proceedings concerning contingent earn-out payments with Fit Pay shareholders and Series C preferred stock dividends with GDMSAI - The company is defending against a breach of contract lawsuit from Fit Pay shareholders regarding contingent earn-out payments; the company's motion for summary judgment is pending[124](index=124&type=chunk)[74](index=74&type=chunk) - The company was also sued by GDMSAI for **$440,000 in Series C preferred stock dividends**; the Delaware Court of Chancery ruled in favor of GDMSAI, and the company plans to appeal[125](index=125&type=chunk)[76](index=76&type=chunk) [Mine Safety Disclosures](index=31&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - This item is not applicable to the company[127](index=127&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=33&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Nxt-ID's common stock trades on the Nasdaq Capital Market, and the company raised approximately $3.86 million in gross proceeds through equity offerings in 2020 - The company's common stock is traded on the Nasdaq Capital Market under the symbol "NXTD"[130](index=130&type=chunk) - As of April 14, 2021, there were approximately **84 stockholders of record**[130](index=130&type=chunk) - The company has never paid dividends on its common stock and does not intend to in the foreseeable future, planning to use earnings for business expansion[131](index=131&type=chunk)[116](index=116&type=chunk) - All Series D Preferred Stock issued in December 2020 was subsequently converted into common stock, and the designation for Series D Preferred Stock has been eliminated[140](index=140&type=chunk) July 2020 Registered Direct Offering Details | Security Type | Quantity | Exercise Price | Term | Gross Proceeds | | :--- | :--- | :--- | :--- | :--- | | Common Stock | 3,778,513 shares | N/A | N/A | $1,864,528 (offering total) | | Pre-funded Warrants | 734,965 shares | $0.01/share | 5 years | | | Registered Warrants | 1,579,718 shares | $0.50/share | 5 years | | | Unregistered Warrants | 3,750,000 shares | $0.65/share | 5.5 years (exercisable 6 months post-issuance) | | December 2020 Securities Offering Details | Security Type | Quantity | Exercise Price | Term | Gross Proceeds | | :--- | :--- | :--- | :--- | :--- | | Series D Convertible Preferred Stock | 1,515,151 shares | Convertible to 3,030,303 shares of common stock | N/A | $2,000,000 (offering total) | | Registered Warrants | 1,000,000 shares | $0.49/share | 5 years | | | Unregistered Warrants | 5,060,606 shares | $0.49/share | 5.5 years (exercisable 6 months post-issuance) | | [Reserved](index=35&type=section&id=Item%206.%20Reserved) This item has been reserved - This item has been reserved[138](index=138&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=35&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) The company's 2020 revenue and gross profit declined significantly due to COVID-19, but cost-cutting and financing activities improved its cash position - LogicMark's PPP loan of **$301,460 plus accrued interest** has been partially forgiven[138](index=138&type=chunk) - LogicMark voluntarily prepaid **$5 million** of its term loan and extended the maturity date of the remaining balance to May 22, 2023[139](index=139&type=chunk)[424](index=424&type=chunk) - The company has regained compliance with the Nasdaq minimum bid price requirement but remains in a monitoring period until July 5, 2021[145](index=145&type=chunk)[146](index=146&type=chunk) Recent Financings (Gross Proceeds) | Issuance Date | Security Type | Gross Proceeds | | :--- | :--- | :--- | | December 2020 | Series D Preferred Stock and Warrants | Approx. $2,000,000 | | February 2021 | Series E Preferred Stock and Warrants | Approx. $4,000,000 | Consolidated Results of Operations Summary (2020 vs. 2019) | Metric | 2020 ($) | 2019 ($) | Change (YoY) | | :--- | :--- | :--- | :--- | | Revenue | 11,442,803 | 17,137,301 | (33.2%) | | Cost of Sales | 3,242,074 | 4,368,495 | (25.8%) | | Gross Profit | 8,200,729 | 12,768,806 | (35.8%) | | Operating Expenses | 8,786,807 | 10,191,015 | (13.7%) | | Operating (Loss) Income | (586,078) | 2,577,791 | (122.7%) | | Net Loss from Continuing Operations | (2,864,984) | (2,368,418) | (21.0%) | | Net Loss Attributable to Common Stockholders | (3,723,906) | (11,939,455) | 68.8% (Improvement) | | Basic and Diluted Loss Per Share | (0.11) | (0.42) | 73.8% (Improvement) | Liquidity and Capital Position (as of December 31, 2020) | Metric | Amount ($) | | :--- | :--- | | Cash | 4,387,416 | | Stockholders' Equity | 9,159,209 | | Working Capital Deficit | (578,797) | | Net Proceeds from Equity/Warrants (2020) | 5,144,387 | Consolidated Cash Flow Summary | Cash Flow Type | 2020 ($) | 2019 ($) | | :--- | :--- | :--- | | Cash (Used in) Provided by Continuing Operations | (412,959) | 2,240,122 | | Cash Provided by Investing Activities from Continuing Operations | 0 | 2,750,314 | | Cash Provided by (Used in) Financing Activities from Continuing Operations | 3,213,125 | (2,001,429) | | Net Increase in Cash and Restricted Cash | 2,800,166 | 122,739 | | Cash and Restricted Cash - End of Year | 4,537,546 | 1,737,380 | [Recent Developments](index=35&type=section&id=2.5%20Recent%20Developments) - LogicMark's PPP loan of **$301,460 plus accrued interest** has been forgiven by the U.S. Small Business Administration[138](index=138&type=chunk) - LogicMark voluntarily prepaid **$5 million** of its term loan and extended the maturity date to May 22, 2023, with a remaining loan balance of approximately $5,752,127[139](index=139&type=chunk)[424](index=424&type=chunk) - The company has regained compliance with the Nasdaq minimum bid price requirement but remains in a monitoring period until July 5, 2021, during which a drop below $1.00 requires notification to Nasdaq[145](index=145&type=chunk)[146](index=146&type=chunk) Recent Capital Raises (Gross Proceeds) | Issuance Date | Security Type | Gross Proceeds | | :--- | :--- | :--- | | December 2020 | Series D Preferred Stock and Warrants | Approx. $2,000,000 | | February 2021 | Series E Preferred Stock and Warrants | Approx. $4,000,000 | [Results of Operations (Year Ended December 31, 2020 vs. 2019)](index=37&type=section&id=2.6%20Results%20of%20Operations%20(Year%20Ended%20December%2031%2C%202020%20vs.%202019)) - The decline in revenue and gross profit was primarily attributable to **reduced sales volume at LogicMark due to the COVID-19 pandemic**[148](index=148&type=chunk)[149](index=149&type=chunk) - Operating expenses decreased by approximately **$1.4 million year-over-year**, mainly due to cost reduction and control measures implemented in 2019 and 2020, partially offset by increased legal and other public company expenses in 2020 related to two lawsuits and proxy solicitation efforts[152](index=152&type=chunk) Consolidated Results of Operations Summary | Metric | 2020 ($) | 2019 ($) | Change (YoY) | | :--- | :--- | :--- | :--- | | Revenue | 11,442,803 | 17,137,301 | (33.2%) | | Cost of Sales | 3,242,074 | 4,368,495 | (25.8%) | | Gross Profit | 8,200,729 | 12,768,806 | (35.8%) | | Operating Expenses | 8,786,807 | 10,191,015 | (13.7%) | | Operating (Loss) Income | (586,078) | 2,577,791 | (122.7%) | | Net Loss from Continuing Operations | (2,864,984) | (2,368,418) | (21.0%) | | Net Loss Attributable to Common Stockholders | (3,723,906) | (11,939,455) | 68.8% (Improvement) | | Basic and Diluted Loss Per Share | (0.11) | (0.42) | 73.8% (Improvement) | [Liquidity and Capital Resources](index=38&type=section&id=2.7%20Liquidity%20and%20Capital%20Resources) - The company believes that its cash position as of December 31, 2020, combined with projected operating cash flows and ongoing cost-cutting measures, provides sufficient capital to sustain operations for one year[157](index=157&type=chunk)[158](index=158&type=chunk)[308](index=308&type=chunk) Liquidity and Capital Position (as of December 31, 2020) | Metric | Amount ($) | | :--- | :--- | | Cash | 4,387,416 | | Stockholders' Equity | 9,159,209 | | Working Capital Deficit | (578,797) | | Net Proceeds from Equity and Warrants (2020) | 5,144,387 | [Cash Flows](index=39&type=section&id=2.8%20Cash%20Flows) - Net cash used in operating activities was **$412,959 in 2020**, compared to net cash provided of $2,240,122 in 2019, reflecting the net loss and changes in working capital[161](index=161&type=chunk) - Net cash provided by financing activities was **$3,213,125 in 2020**, primarily from the issuance of common stock, warrants, and Series D preferred stock, partially offset by term loan repayments[163](index=163&type=chunk) Consolidated Cash Flow Summary | Cash Flow Type | 2020 ($) | 2019 ($) | | :--- | :--- | :--- | | Cash (Used in) Provided by Continuing Operations | (412,959) | 2,240,122 | | Cash Provided by Investing Activities from Continuing Operations | 0 | 2,750,314 | | Cash Provided by (Used in) Financing Activities from Continuing Operations | 3,213,125 | (2,001,429) | | Net Increase in Cash and Restricted Cash | 2,800,166 | 122,739 | | Cash and Restricted Cash - End of Year | 4,537,546 | 1,737,380 | [Potential Impacts of COVID-19](index=39&type=section&id=2.9%20Potential%20Impacts%20of%20COVID-19) - The COVID-19 pandemic significantly impacted the company's 2020 operating results, causing a **sharp decline in demand from customers (especially VA hospitals)** and increased sales volatility[165](index=165&type=chunk)[166](index=166&type=chunk)[173](index=173&type=chunk)[176](index=176&type=chunk) - The company implemented a COVID-19 mitigation plan, including **senior management hour and salary reductions**, decreased discretionary spending, and a suspension of corporate travel to protect its balance sheet and liquidity[172](index=172&type=chunk)[173](index=173&type=chunk) - Nxt-ID and LogicMark received a total of **$346,390 in PPP loans**; LogicMark's $301,390 loan plus accrued interest was forgiven in March 2021[171](index=171&type=chunk)[426](index=426&type=chunk) - While supply chain disruptions have been minimal, the unpredictable nature of the pandemic could still negatively impact the workforce, supply chain, and customer purchasing decisions[169](index=169&type=chunk)[177](index=177&type=chunk) [Business Outlook](index=41&type=section&id=2.10%20Business%20Outlook) - The company's future financial performance depends on market conditions and the U.S. economy, which were significantly impacted by the COVID-19 pandemic in 2020[173](index=173&type=chunk) - The company will continue to **prudently manage its cost structure and cash flow** and rethink strategic plans to adapt to changing market conditions and serve customers in a post-COVID-19 environment[175](index=175&type=chunk)[176](index=176&type=chunk) [Impairment of Goodwill and Indefinite-Lived Intangible Assets](index=43&type=section&id=2.11%20Impairment%20of%20Goodwill%20and%20Indefinite-Lived%20Intangible%20Assets) - The company conducts an annual impairment review of goodwill and indefinite-lived intangible assets[179](index=179&type=chunk) - Despite the economic impact of the COVID-19 pandemic early in 2020, the company **did not identify an impairment triggering event in 2020** due to a recovery in sales beginning in the third quarter[179](index=179&type=chunk)[180](index=180&type=chunk) [Impact of Inflation](index=43&type=section&id=2.12%20Impact%20of%20Inflation) - The company believes inflation has not had a material impact on its business over the past three years and does not expect a significant impact in 2021[181](index=181&type=chunk) - The company has maintained or improved profit margins through productivity gains, efficiencies, cost reduction programs, and, to some extent, price increases[181](index=181&type=chunk) [Financings](index=44&type=section&id=2.13%20Financings) - In November 2020, the company entered into the First Amendment to its senior secured term loan with CrowdOut Capital LLC, modifying financial ratios to ensure covenant compliance as of December 31, 2020[184](index=184&type=chunk)[367](index=367&type=chunk) December 2020 Offering Summary | Security Type | Quantity | Exercise Price | Term | Gross Proceeds | | :--- | :--- | :--- | :--- | :--- | | Series D Preferred Stock | 1,515,151 shares | Convertible to 3,030,303 shares of common stock | N/A | $2,000,000 | | Common Stock Warrants | 1,000,000 shares | $0.49/share | 5 years | | | Common Stock Warrants | 5,060,606 shares | $0.49/share | 5.5 years (exercisable 6 months post-issuance) | | July 2020 Offering Summary | Security Type | Quantity | Exercise Price | Term | Gross Proceeds | | :--- | :--- | :--- | :--- | :--- | | Common Stock | 3,778,513 shares | N/A | N/A | $1,864,528 | | Pre-funded Warrants | 734,965 shares | $0.01/share | 5 years | | | Registered Warrants | 1,579,718 shares | $0.50/share | 5 years | | | Unregistered Warrants | 3,750,000 shares | $0.65/share | 5.5 years (exercisable 6 months post-issuance) | | [Off Balance Sheet Arrangements](index=44&type=section&id=2.14%20Off%20Balance%20Sheet%20Arrangements) - The company has no off-balance sheet arrangements with unconsolidated entities or financial partnerships, nor any undisclosed borrowings or synthetic leases, and thus no material exposure to related financing, liquidity, market, or credit risks[187](index=187&type=chunk) [Critical Accounting Policies](index=44&type=section&id=2.15%20Critical%20Accounting%20Policies) - Revenue is recognized at a point in time when control of the product transfers to the customer, typically upon shipment or delivery, with a fixed sales price and payment terms usually 30 days from shipment[190](index=190&type=chunk)[316](index=316&type=chunk) - Inventory is stated at the lower of cost or net realizable value, with cost determined using the first-in, first-out (FIFO) method, and is periodically reviewed for excess, obsolete, and slow-moving inventory valuation allowances[192](index=192&type=chunk)[323](index=323&type=chunk) - Accounting for convertible instruments and derivative financial instruments involves separating the conversion option from the host instrument if certain criteria are met and re-measuring the derivative at fair value each reporting period[193](index=193&type=chunk)[194](index=194&type=chunk)[336](index=336&type=chunk)[339](index=339&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=46&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) As a smaller reporting company, Nxt-ID is not required to provide quantitative and qualitative disclosures about market risk - As a smaller reporting company, Nxt-ID is not required to provide quantitative and qualitative disclosures about market risk[196](index=196&type=chunk) [Financial Statements and Supplementary Data](index=46&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This report includes the company's audited consolidated financial statements for the years ended December 31, 2020, and December 31, 2019 - This report contains the company's audited consolidated financial statements for the years ended December 31, 2020, and December 31, 2019, including the consolidated balance sheets, statements of operations, changes in stockholders' equity, cash flows, and related notes[197](index=197&type=chunk)[284](index=284&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=46&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company has had no changes in or disagreements with its accountants on accounting and financial disclosure - The company has had no changes in or disagreements with its accountants on accounting and financial disclosure[198](index=198&type=chunk) [Controls and Procedures](index=46&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures and internal control over financial reporting were ineffective as of December 31, 2020 - As of December 31, 2020, management concluded the company's **disclosure controls and procedures were ineffective**, primarily due to material weaknesses in internal control over financial reporting[199](index=199&type=chunk) - Management concluded that as of December 31, 2020, **internal control over financial reporting was ineffective**[200](index=200&type=chunk)[203](index=203&type=chunk) - Material weaknesses in internal control included: **insufficient accounting personnel** to handle complex transactions, limited segregation of duties in accounting and financial reporting functions, and failure to complete an effective assessment based on the 2013 COSO framework[201](index=201&type=chunk)[203](index=203&type=chunk) - To remediate the material weakness, management has initiated or enhanced procedures for processing cash receipts, with strict controls over access to incoming mail and physical checks[201](index=201&type=chunk) [Evaluation of Disclosure Controls and Procedures](index=46&type=section&id=2.19%20Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) - Management concluded that as of December 31, 2020, the company's disclosure controls and procedures were **ineffective** in providing reasonable assurance that information required to be disclosed under SEC rules and forms is recorded, processed, summarized, and reported in a timely manner[199](index=199&type=chunk) [Management's Report on Internal Control over Financial Reporting](index=46&type=section&id=2.20%20Management's%20Report%20on%20Internal%20Control%20over%20Financial%20Reporting) - Management concluded that as of December 31, 2020, the company's **internal control over financial reporting was ineffective**[200](index=200&type=chunk)[203](index=203&type=chunk) - Identified material weaknesses include: difficulty in handling complex accounting transactions due to **insufficient accounting personnel**; limited segregation of duties in accounting and financial reporting functions; and failure to complete an effective assessment based on the 2013 COSO framework[201](index=201&type=chunk)[203](index=203&type=chunk) - To remediate the material weakness, management has initiated or enhanced procedures for processing cash receipts, with strict controls over access to incoming mail and physical checks[201](index=201&type=chunk) [Limitations of the Effectiveness of Internal Control](index=47&type=section&id=2.21%20Limitations%20of%20the%20Effectiveness%20of%20Internal%20Control) - An internal control system, no matter how well designed and operated, can provide only **reasonable, not absolute, assurance** due to inherent limitations including errors in judgment, simple mistakes, individual acts or collusion, and management override[205](index=205&type=chunk) [Changes in Internal Control over Financial Reporting](index=47&type=section&id=2.22%20Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) - There were no changes in the company's internal control over financial reporting during the fourth quarter of the fiscal year ended December 31, 2020, that have materially affected, or are reasonably likely to materially affect, internal control over financial reporting[206](index=206&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=48&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) The company's leadership team possesses diverse expertise in finance, defense, technology, and biosciences, with established board committees for governance - Vincent S. Miceli has over 30 years of executive, financial, and operational management experience and serves as Chairman, CEO, and CFO[211](index=211&type=chunk)[212](index=212&type=chunk) - Board members have diverse professional backgrounds, including defense and homeland security (General Gust), e-commerce technology and high-growth companies (Dr. D'Almada-Remedios), finance and administration (Mr. Sharkey), and biosciences and healthcare (Dr. Curtis)[216](index=216&type=chunk)[221](index=221&type=chunk)[224](index=224&type=chunk)[227](index=227&type=chunk) - The company has adopted a **Code of Business Conduct and Ethics**, applicable to all employees, directors, and executive officers, which is available on the company's website[236](index=236&type=chunk) Executive Officers and Directors (as of April 15, 2021) | Name | Age | Position | Date First Elected or Appointed | | :--- | :--- | :--- | :--- | | Vincent S. Miceli | 63 | Chairman, CEO, CFO & Director | September 29, 2014 | | David Tunnell | 55 | VP & CTO (employment terminated April 12, 2021) | June 25, 2012 | | 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 | Board Committees and Members | Committee | Members | Chairman | Financial Expert | | :--- | :--- | :--- | :--- | | Audit Committee | Daniel Sharkey, Robert A. Curtis, David R. Gust | Daniel Sharkey | Daniel Sharkey | | Compensation Committee | David R. Gust, Daniel Sharkey, Robert A. Curtis | David R. Gust | N/A | | Corporate Governance and Nominating Committee | Robert A. Curtis, David R. Gust, Daniel Sharkey | Robert A. Curtis | N/A | Delinquent Section 16(a) Reports for Fiscal Year 2020 | Name | Form Description | Reason for Delinquency | | :--- | :--- | :--- | | Daniel P. Sharkey | Form 4 | One transaction (common stock compensation as a Board member) was not timely reported | | Robert A. Curtis | Form 4 | One transaction (common stock compensation as a Board member) was not timely reported | | David R. Gust | Form 4 | One transaction (common stock compensation as a Board member) was not timely reported | | Michael J. D'Almada-Remedios | Form 4 | One transaction (common stock compensation as a Board member) was not timely reported | [Executive Compensation](index=39&type=section&id=Item%2011.%20Executive%20Compensation) CEO and CFO Vincent S. Miceli was the highest-paid executive in fiscal 2020 with total compensation of $523,767 - Vincent S. Miceli's employment agreement (effective January 1, 2021) provides for an **annual base salary of $365,000** and eligibility for a cash bonus[242](index=242&type=chunk)[243](index=243&type=chunk) - Mr. Miceli was granted an award of **400,000 shares of common stock** under the company's 2013 Long-Term Stock Incentive Plan or 2017 Stock Incentive Plan[243](index=243&type=chunk) - Vincent S. Miceli's unvested stock awards will vest pro-rata in 2021 and 2022[247](index=247&type=chunk) - In 2020, each non-employee director received **$30,000 in cash and $40,000 in stock options** (for 83,818 shares of common stock at a weighted average exercise price of approximately $0.48/share)[248](index=248&type=chunk)[249](index=249&type=chunk)[250](index=250&type=chunk) Executive Compensation Summary (Fiscal Years 2020 and 2019) | Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($) | All Other Compensation ($) | Total ($) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Vincent S. Miceli, CEO/CFO | 2020 | 365,000 | 50,000 | 75,000 | 33,767 | 523,767 | | | 2019 | 329,391 | 30,000 | 75,000 | 30,190 | 464,581 | | Gino M. Pereira, CEO (resigned 2019) | 2020 | - | - | - | - | - | | | 2019 | 345,968 | 40,000 | 100,000 | 25,682 | 511,650 | | Michael J. Orlando, COO (resigned 2019) | 2020 | - | - | - | - | - | | | 2019 | 242,083 | - | - | - | 242,083 | | Stanley E. Washington, CRO (resigned 2019) | 2020 | - | - | - | - | - | | | 2019 | 104,167 | - | - | - | 104,167 | Outstanding Equity Awards at Fiscal Year-End 2020 | Name | Number of Shares of Stock That Have Not Vested () | Market Value of Shares of Stock That Have Not Vested ($) | | :--- | :--- | :--- | | Vincent S. Miceli | 100,000 | 160,000 | | Gino Pereira | - | - | | Michael J. Orlando | - | - | | Stanley E. Washington | - | - | Director Compensation for Fiscal Year 2020 | Name | Fees Earned ($) | Stock Option Awards ($) | Total ($) | | :--- | :--- | :--- | :--- | | Major General David R. Gust, USA, Ret. | 40,000 | 40,000 | 80,000 | | Michael J. D'Almada-Remedios, PhD | 40,000 | 40,000 | 80,000 | | Daniel P. Sharkey | 40,000 | 40,000 | 80,414 | | Robert A. Curtis, Pharm.D. | 40,000 | 40,000 | 80,193 | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=58&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Alpha Capital Anstalt and Anson Investments Master Fund LP are the principal beneficial owners, while directors and officers as a group own 4.95% of total voting power - Alpha Capital Anstalt and Anson Investments Master Fund LP are the principal beneficial owners, holding **8.78% and 9.99%** of common stock, respectively, with their warrants subject to beneficial ownership limitations[255](index=255&type=chunk)[256](index=256&type=chunk) - Giesecke+Devrient Mobile Security America, Inc. (G&D) is the sole holder of Series C Preferred Stock, possessing 100% of its voting power, which represents **1.93% of the total voting power**[254](index=254&type=chunk) - The 2013 Long-Term Incentive Plan (LTIP) and 2017 Stock Incentive Plan (2017 SIP) authorize the issuance of common stock, limited to 10% of outstanding shares on the first trading day of any fiscal year, with 1,201,715 and 4,061,997 shares available for issuance in fiscal 2020, respectively[258](index=258&type=chunk)[261](index=261&type=chunk) Beneficial Ownership (as of April 14, 2021) | Name | Number of Shares of Common Stock | Percentage of Common Stock | Number of Shares of Series C Preferred Stock | Percentage of Series C Preferred Stock | Percentage of Total Voting Power | | :--- | :--- | :--- | :--- | :--- | :--- | | Giesecke+Devrient Mobile Security America, Inc. | 584,795 | 1.93% | 2,000 | 100% | 1.93% | | Alpha Capital Anstalt | 4,682,510 | 8.78% | — | — | 4.39% | | Anson Investments Master Fund LP | 6,177,080 | 9.99% | — | — | N/A | | Directors and Executive Officers as a group | 2,653,716 | 4.95% | — | — | 4.95% | Equity Compensation Plan Information (as of December 31, 2020) | Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) | Weighted-average exercise price of outstanding options, warrants and rights (b) | Number of securities remaining available for future issuance under the plan (excluding securities reflected in column (a)) (c) | | :--- | :--- | :--- | :--- | | Equity compensation plans approved by security holders (LTIP) | - | $0 | 1,201,715 | | Equity compensation plans approved by security holders (2017 SIP) | - | $0 | 4,061,997 | | Equity compensation plans not approved by security holders | - | $0 | - | | **Total** | **-** | **$0** | **5,263,712** | [Certain Relationships and Related Transactions, and Director Independence](index=60&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) The company had no significant related party transactions in the last two fiscal years, and three directors are deemed independent - In the past two fiscal years, other than compensation arrangements, the company has not had any material related party transactions exceeding **$120,000 or 1% of average total assets**[259](index=259&type=chunk) - The Audit Committee reviews and approves all related party transactions to ensure their terms are comparable to or more favorable than those in an arm's-length transaction[260](index=260&type=chunk) - Major General David R. Gust, Daniel P. Sharkey, and Dr. Robert A. Curtis are deemed **"independent directors"** under Nasdaq rules[261](index=261&type=chunk) [Principal Accounting Fees and Services](index=61&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Marcum LLP serves as the company's independent auditor, with audit fees decreasing in 2020, and all services are pre-approved by the Audit Committee - There were no audit-related service fees, tax compliance/consulting/planning service fees, or other service fees in either 2020 or 2019[263](index=263&type=chunk)[264](index=264&type=chunk)[265](index=265&type=chunk) - The Audit Committee pre-approves all audit and permissible non-audit services provided by the independent auditor and has delegated authority to the Chairman to pre-approve interim services, with all pre-approvals reported to the committee[266](index=266&type=chunk) Marcum LLP Audit Fees | Year | Audit Fees ($) | | :--- | :--- | | 2020 (Estimated) | Approx. 165,000 | | 2019 (Billed) | 234,145 | Part IV [Exhibits, Financial Statement Schedules](index=62&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This report includes the company's audited consolidated financial statements and an exhibit index listing various filed agreements and documents - This report contains the company's audited consolidated financial statements for the years ended December 31, 2020, and December 31, 2019, including consolidated balance sheets, statements of operations, changes in stockholders' equity, and cash flows[269](index=269&type=chunk) - The report includes an exhibit index listing various agreements, certificates, and warrants that have been filed or incorporated by reference, with certain representations and warranties made solely for the benefit of the parties to the agreements[270](index=270&type=chunk)[271](index=271&type=chunk)[273](index=273&type=chunk)[274](index=274&type=chunk)[275](index=275&type=chunk)[276](index=276&type=chunk) [Form 10-K Summary](index=66&type=section&id=Item%2016.%20Form%2010-K%20Summary) This item is not applicable - This item is not applicable[277](index=277&type=chunk) SIGNATURES Nxt-ID, Inc. and Subsidiaries CONTENTS Financial Statements [Report of Independent Registered Public Accounting Firm](index=69&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) Marcum LLP issued an unqualified opinion on the consolidated financial statements, stating they are fairly presented in accordance with U.S. GAAP - Marcum LLP issued an **unqualified opinion** on Nxt-ID's consolidated financial statements for the years ended December 31, 2020, and 2019, concluding they are fairly presented in all material respects in accordance with U.S. Generally Accepted Accounting Principles (U.S. GAAP)[287](index=287&type=chunk) - The audit did not include an opinion on the effectiveness of internal control over financial reporting, and **no critical audit matters were identified**[289](index=289&type=chunk)[291](index=291&type=chunk) [Consolidated Balance Sheets](index=70&type=section&id=Consolidated%20Balance%20Sheets) Total assets grew to $26.9 million as of December 31, 2020, driven by an increase in cash, while total stockholders' equity increased significantly to $9.2 million Consolidated Balance Sheet Highlights | Metric | December 31, 2020 ($) | December 31, 2019 ($) | Change (YoY) | | :--- | :--- | :--- | :--- | | Total Assets | 26,948,287 | 25,048,182 | +7.6% | | Cash | 4,387,416 | 1,587,250 | +176.4% | | Inventory, net | 767,351 | 1,303,279 | (41.1%) | | Goodwill | 15,479,662 | 15,479,662 | 0% | | Total Liabilities | 15,981,778 | 16,526,294 | (3.3%) | | Total Stockholders' Equity | 9,159,209 | 6,714,588 | +36.4% | [Consolidated Statements of Operations](index=72&type=section&id=Consolidated%20Statements%20of%20Operations) The company recorded a net loss of $2.9 million in 2020, a significant improvement from 2019, despite a 33.2% decline in revenue due to COVID-19's impact - The decline in revenue and gross profit in 2020 was primarily attributable to **reduced sales volume at LogicMark due to the COVID-19 pandemic**[148](index=148&type=chunk)[149](index=149&type=chunk) Consolidated Statements of Operations Summary | Metric | 2020 ($) | 2019 ($) | Change (YoY) | | :--- | :--- | :--- | :--- | | Revenue | 11,442,803 | 17,137,301 | (33.2%) | | Gross Profit | 8,200,729 | 12,768,806 | (35.8%) | | Operating (Loss) Income | (586,078) | 2,577,791 | (122.7%) | | Net Loss from Continuing Operations | (2,864,984) | (2,368,418) | (21.0%) | | Loss from Discontinued Operations | 0 | (9,421,037) | 100% (eliminated) | | Net Loss | (2,864,984) | (11,789,455) | 75.7% (Improvement) | | Basic and Diluted Loss Per Share | (0.11) | (0.42) | 73.8% (Improvement) | [Consolidated Statements of Changes in Stockholders' Equity](index=73&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) Total stockholders' equity increased from $6.7 million at year-end 2019 to $9.2 million at year-end 2020, driven by equity issuances - The increase in stockholders' equity was primarily attributable to net proceeds from the issuance of common stock, warrants, and Series D preferred stock, partially offset by the net loss[156](index=156&type=chunk)[160](index=160&type=chunk)[298](index=298&type=chunk) Stockholders' Equity Change Highlights | Metric | December 31, 2020 ($) | December 31, 2019 ($) | | :--- | :--- | :--- | | Beginning Balance | 6,714,588 | 14,736,758 | | Issuance of common stock and warrants, net | 1,864,528 | 1,915,000 | | Issuance of Series D preferred stock, net | 2,000,000 | 0 | | Conversion of Series D preferred stock to common stock | 0 | 0 | | Exercise of common stock warrants, cash | 1,279,859 | 0 | | Net Loss | (2,864,984) | (11,789,455) | | Preferred stock dividends | (100,000) | (150,000) | | Ending Balance | 9,159,209 | 6,714,588 | [Consolidated Statements of Cash Flows](index=75&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Financing activities provided $3.2 million in net cash in 2020, offsetting a net cash outflow from operations and leading to a $2.8 million increase in cash - The **$412,959 cash outflow from operating activities** in 2020, a reversal from the cash inflow in 2019, reflects the impact of the net loss[161](index=161&type=chunk) - **Financing activities were the primary source of cash** in 2020, mainly from the issuance of common stock, warrants, and Series D preferred stock, partially offset by term loan repayments[163](index=163&type=chunk) Consolidated Cash Flow Summary | Cash Flow Type | 2020 ($) | 2019 ($) | | :--- | :--- | :--- | | Cash (Used in) Provided by Continuing Operations | (412,959) | 2,240,122 | | Cash Provided by Investing Activities from Continuing Operations | 0 | 2,750,314 | | Cash Provided by (Used in) Financing Activities from Continuing Operations | 3,213,125 | (2,001,429) | | Net Increase in Cash and Restricted Cash | 2,800,166 | 122,739 | | Cash and Restricted Cash - End of Year | 4,537,546 | 1,737,380 | [Notes to Consolidated Financial Statements](index=77&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) [Organization and Principal Business Activities (Note 1)](index=77&type=section&id=5.6.1%20Organization%20and%20Principal%20Business%20Activities%20(Note%201)) - Nxt-ID is a security technology company operating a single business segment—hardware and software security systems and applications—serving the healthcare, fintech, and IoT markets[304](index=304&type=chunk) - Its wholly-owned subsidiary, LogicMark, manufactures and distributes Personal Emergency Response Systems, while the Fit-Pay payment business was sold to Garmin International, Inc. in September 2019 for **$3.32 million in cash**[305](index=305&type=chunk)[306](index=306&type=chunk) [Liquidity and Management Plans (Note 2)](index=77&type=section&id=5.6.2%20Liquidity%20and%20Management%20Plans%20(Note%202)) - The company believes its cash position and projected operating cash flows are sufficient to sustain operations for one year and may pursue equity or debt financing to accelerate long-term strategic plans[308](index=308&type=chunk) Liquidity Position (as of December 31, 2020) | Metric | Amount ($) | | :--- | :--- | | Net Loss (2020) | (2,864,984) | | Cash | 4,387,416 | | Stockholders' Equity | 9,159,209 | | Working Capital Deficit | (578,797) | | Net Proceeds from Equity/Warrants (2020) | 5,144,387 | [Summary of Significant Accounting Policies (Note 3)](index=78&type=section&id=5.6.3%20Summary%20of%20Significant%20Accounting%20Policies%20(Note%203)) - The financial statements are prepared in accordance with U.S. GAAP, requiring management to make estimates and assumptions regarding fair value, stock-based compensation, income taxes, and inventory[311](index=311&type=chunk) - Product sales revenue is recognized at a point in time when control transfers to the customer, typically upon shipment or delivery, with a fixed sales price and payment terms usually 30 days from shipment[316](index=316&type=chunk) - Inventory is stated at the lower of cost or net realizable value, with cost determined using the FIFO method, and is periodically reviewed for excess, obsolete, and slow-moving inventory valuation allowances[322](index=322&type=chunk)[323](index=323&type=chunk) - Goodwill impairment is assessed qualitatively on an annual basis; in 2020, it was determined that LogicMark's fair value exceeded its carrying value, so no quantitative assessment was required[328](index=328&type=chunk)[329](index=329&type=chunk) - Accounting for convertible instruments and derivative financial instruments involves separating the conversion option from the host instrument if certain criteria are met, re-measuring the derivative at fair value each reporting period, and amortizing any debt discount over the term of the related debt[336](index=336&type=chunk)[338](index=338&type=chunk)[339](index=339&type=chunk) [Discontinued Operations (Note 4)](index=84&type=section&id=5.6.4%20Discontinued%20Operations%20(Note%204)) - The company sold its Fit Pay subsidiary to Garmin International, Inc. on September 9, 2019, for approximately **$3.32 million in cash**[348](index=348&type=chunk) Loss on Sale of Discontinued Operations (2019) | Item | Amount ($) | | :--- | :--- | | Total Sales Price | 3,323,198 | | Carrying Net Value of Discontinued Operations | 126,062 | | Write-off of Goodwill related to Fit Pay acquisition | (9,119,709) | | Write-off of Unamortized Other Intangible Assets related to Fit Pay acquisition | (2,674,607) | | Write-off of Remaining Contingent Consideration | 2,611,169 | | Transaction Costs Incurred | (254,880) | | **Loss on Sale of Discontinued Operations** | **(5,988,767)** | Financial Performance of Discontinued Operations (2019) | Metric | 2019 ($) | | :--- | :--- | | Net Sales | 625,771 | | Cost of Sales | 194,856 | | Gross Profit (Loss) | 430,915 | | Operating Expenses | 3,859,222 | | Interest Expense | 3,963 | | Income Tax Expense (Benefit) | 0 | | **Loss from Discontinued Operations** | **(3,432,270)** | [Accrued Expenses (Note 5)](index=85&type=section&id=5.6.5%20Accrued%20Expenses%20(Note%205)) Accrued Expenses | Category | December 31, 2020 ($) | December 31, 2019 ($) | | :--- | :--- | :--- | | Payroll, payroll taxes and vacation | 130,093 | 92,334 | | Consulting fees | 0 | 53,563 | | Merchant bank fees | 19,754 | 26,589 | | State income taxes | 38,672 | 23,800 | | Professional fees | 226,794 | 119,016 | | Management incentive | 500,419 | 758,907 | | Interest expense | 128,187 | 148,980 | | Lease liability | 54,476 | 68,576 | | Dividends – Series C Preferred Stock | 25,000 | 22,182 | | Other | 191,867 | 178,164 | | **Total** | **1,315,262** | **1,492,111** | [Fair Value Measurements (Note 6)](index=85&type=section&id=5.6.6%20Fair%20Value%20Measurements%20(Note%206)) - The company categorizes fair value measurements of financial assets and liabilities into a three-level hierarchy (Level 1, 2, and 3) based primarily on the observability of pricing inputs[354](index=354&type=chunk) - As of December 31, 2020, and 2019, the company had **no liabilities measured at fair value on a recurring basis**[357](index=357&type=chunk) - Level 3 financial liabilities, such as conversion feature liabilities and common stock warrants, require significant judgment or estimation due to their unobservable inputs[359](index=359&type=chunk) [Debt Refinancing (Note 7)](index=87&type=section&id=5.6.7%20Debt%20Refinancing%20(Note%207)) - In May 2019, LogicMark refinanced its $16 million term loan with a new **$16.5 million senior secured term loan** from CrowdOut Capital LLC[363](index=363&type=chunk) - The term loan's maturity date has been extended to May 22, 2023, with the outstanding principal bearing interest at an annual rate of LIBOR plus 11.0% (approximately 13.0% as of December 31, 2020)[363](index=363&type=chunk) - The company incurred an original issue discount of $412,500 and deferred debt issuance costs of $1,831,989 (including a $1,072,500 exit fee) in connection with the term loan[363](index=363&type=chunk) Term Debt Maturity Schedule (as of December 31, 2020) | Year | Amount ($) | | :--- | :--- | | 2021 | 2,062,500 | | 2022 | 9,033,377 | | **Total Term Debt** | **11,095,877** | [Stockholders' Equity (Note 8)](index=89&type=section&id=5.6.8%20Stockholders'%20Equity%20(Note%208)) - In 2020, the company recorded **$100,000 in Series C preferred stock dividends** and issued 335,272 stock options to non-employee directors and 447,620 shares of common stock to employees under its 2013 and 2017 stock incentive plans[378](index=378&type=chunk)[380](index=380&type=chunk)[384](index=384&type=chunk) December 2020 Issuance and Conversion | Item | Details | | :--- | :--- | | Gross Proceeds | $2,000,000 | | Series D Preferred Stock Issued | 1,515,151 shares | | Common Stock from Conversion | 3,030,304 shares | | Deemed Dividend (Beneficial Conversion Feature) | $758,922 | July 2020 Issuance and Warrant Exercise | Item | Details | | :--- | :--- | | Gross Proceeds | $1,864,528 | | Common Stock Issued | 3,778,513 shares | | Pre-funded Warrants Exercised | 734,965 shares, yielding $7,350 | Outstanding Warrants (as of December 31, 2020) | Metric | Value | | :--- | :--- | | Number of Warrants Outstanding | 15,690,077 | | Weighted Average Exercise Price | $1.33 | | Weighted Average Remaining Term | 4.10 years | | Aggregate Intrinsic Value | $10,850,158 | [Income Taxes (Note 9)](index=95&type=section&id=5.6.9%20Income%20Taxes%20(Note%209)) - Due to significant uncertainty regarding the future realization of deferred tax assets, the company has established a **full valuation allowance** against them[399](index=399&type=chunk) - As of December 31, 2020, the company's tax years from 2016 onward are subject to examination by tax authorities, but no material uncertain tax positions have been identified[395](index=395&type=chunk)[396](index=396&type=chunk) Tax Loss Carryforwards (as of December 31, 2020) | Category | Amount ($) | Expiration | | :--- | :--- | :--- | | U.S. Federal Net Operating Losses (NOLs) | 43,520,967 | Beginning 2033 (pre-2018), Indefinite (post-2018) | | State Net Operating Losses (NOLs) | 24,126,647 | Beginning 2033 (pre-2018), Varies by state (post-2018) | | Federal Capital Loss Carryforwards | 11,779,190 | 2024 | | State Capital Loss Carryforwards | 4,621,480 | Beginning 2024 | | Tax Credit Carryforwards | 205,028 | Beginning 2033 | [Commitments and Contingencies (Note 10)](index=97&type=section&id=5.6.10%20Commitments%20and%20Contingencies%20(Note%2010)) - The company is involved in two legal proceedings: one with Fit Pay shareholders over contingent earn-out payments and another with GDMSAI regarding Series C preferred stock dividends, and it plans to appeal the adverse summary judgment in the GDMSAI case[402](index=402&type=chunk)[403](index=403&type=chunk) - The company entered into a new five-year warehouse lease in Louisville, KY, effective September 2020, which increased the right-of-use asset value by **$279,024**[407](index=407&type=chunk) Future Minimum Undiscounted Lease Payments (as of December 31, 2020) | Year Ending December 31 | Amount ($) | | :--- | :--- | | 2021 | 90,986 | | 2022 | 93,385 | | 2023 | 89,724 | | 2024 | 80,000 | | 2025 | 54,400 | | **Total Future Minimum Lease Payments** | **408,495** | [Subsequent Events (Note 11)](index=99&type=section&id=5.6.11%20Subsequent%20Events%20(Note%2011)) - In January 2021, the company entered into warrant amendment and exercise agreements, resulting in the issuance of new warrants and substantial proceeds from warrant exercises[414](index=414&type=chunk)[415](index=415&type=chunk)[419](index=419&type=chunk)[420](index=420&type=chunk)[422](index=422&type=chunk)[425](index=425&type=chunk) - In February 2021, the company issued Series E preferred stock, raising **gross proceeds of $4,000,004**; all Series E preferred shares were subsequently converted into common stock[421](index=421&type=chunk)[423](index=423&type=chunk)[425](index=425&type=chunk) - LogicMark's PPP loan of **$301,390 plus accrued interest** was forgiven by the U.S. Small Business Administration in March 2021[426](index=426&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: September 30, 2020 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______________ to ______________ Commission File Number: 001-36616 Delaware 46-0678374 (State or other jurisdiction of incorporation or organization) 288 ...

Nxt-ID, Inc. (NXTD) Q2 2020 Earnings Conference Call August 18, 2020 4:10 AM ET Company Participants Vin Miceli - Chief Executive Officer Kevin O’Connor - President of LogicMark Operator Ladies and gentlemen, thank you for standing by and welcome to the Nxt-ID Investor Webcast. At this time, all participants are in a listen-only mode. After speakers’ presentation, there will be a question-and-answer session [Operator Instructions]. I would now like turn the conference to your host CEO, Vin Miceli. Sir, you ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: June 30, 2020 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______________ to ______________ 288 Christian Street Hangar C 2 Floor Oxford, CT 06478 (Address of principal executive offices)(Zip Code) (203) 266-2103 (Reg ...

Financial Data and Key Metrics Changes - Revenues for Q1 2020 were approximately $3.7 million, down from $4.2 million in Q1 2019, reflecting a decrease of about 12% [7] - Gross profit for Q1 2020 was $2.8 million compared to $3.2 million in the same period of 2019, with a gross profit margin of approximately 75% [9] - Operating expenses decreased to approximately $1.8 million in Q1 2020 from $2.7 million in Q1 2019, indicating a reduction of about 33% [10] - Operating income for Q1 2020 was approximately $1.1 million, up from $0.5 million in Q1 2019 [11] - Non-GAAP operating income for Q1 2020 was about $1.3 million compared to $0.9 million in the prior year [12] - Net cash provided by operating activities was $0.5 million in Q1 2020, down from $0.8 million in Q1 2019 [12] - The company reduced its working capital deficiency by $300,000 during the quarter [13] - The cash balance at the end of March 2020 was just above $1.4 million, with equity growing to about $7.3 million [15] Business Line Data and Key Metrics Changes - The company experienced a revenue miss of approximately $400,000 due to the COVID pandemic, which also impacted the contribution margin by about $300,000 [8] - The commercial side of the business saw a slight pickup in sales, particularly in landline-based products for seniors, while the VA experienced a significant drop in activity [26][27] Market Data and Key Metrics Changes - The VA healthcare system was severely impacted by COVID-19, limiting appointments and affecting sales [26] - As healthcare systems begin to reopen, there is an expectation of pent-up demand, particularly in the VA and commercial channels [28][29] Company Strategy and Development Direction - The company is focused on reducing operating expenses and has made significant progress in streamlining operations [39][40] - New product development is a priority, with ongoing projects including a Wi-Fi product and a 4G LTE platform [30][32] - The company aims to build on existing platforms to enhance efficiency and meet market needs [34] Management's Comments on Operating Environment and Future Outlook - The management acknowledged that Q2 2020 would also be negatively impacted by COVID-19, with April revenues lower than March [38] - The company is taking measures to mitigate COVID-19 impacts, including cutting additional operating expenses and managing cash disbursements [39] - The outlook for the remainder of 2020 remains strong as the U.S. economy begins to reopen [35] Other Important Information - The company received approximately $350,000 in loan proceeds under the CARES Act, which will help mitigate COVID-19 impacts [17] - The company has not eliminated any employees during the pandemic, maintaining staff levels to support operations [24] Q&A Session Summary - No specific questions or answers were documented in the provided content, as the session concluded without detailed inquiries [42]

(Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: March 31, 2020 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______________ to ______________ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (I.R.S. Employer Identification No.) 288 Christian Street Hangar C 2 Floor Oxford, CT 06478 (Address of principal executive ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2019 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to ___________ Commission file number: 000-54960 Nxt-ID, Inc. (Exact name of registrant as specified in its charter) | Delaware | 46-0678374 | | --- | -- ...

Nxt-ID, Inc. (NXTD) Q3 2019 Results Conference Call November 19, 2019 4:10 PM ET Company Participants Vin Miceli - CEO Kevin O'Connor - President, LogicMark Conference Call Participants Michael Diana - Maxim Group Operator Ladies and gentlemen, thank you for standing by and welcome to the Nxt-ID IR Update Webcast and Conference Call. At this time all participants’ lines are in a listen only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Please be ...