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, 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 Delaware 46-0678374 (State or other jurisdiction of incorporation or organization) (I. ...

Financial Data and Key Metrics Changes - Revenues for the six months ended June 30, 2019, were approximately $8.7 million, consistent with the same period in 2018, while revenues for the second quarter increased by about $300,000 compared to the first quarter of 2019 [13][14] - Gross profit margin improved to approximately 76% for both the three and six months ended June 30, 2019, compared to approximately 72% for the same periods in 2018 [15] - Operating income from continuing operations increased by about 67% over the same period last year, with cash provided by continuing operations at approximately $670,000 compared to a deficit of $1.1 million for the same period last year [8][19] Business Line Data and Key Metrics Changes - LogicMark's core business performed well, contributing significantly to revenues, although there was a decrease in commercial sales volume, partially offset by a favorable shift in product sales mix [14][28] - Fit Pay revenues for Q2 were $232,000, down from $805,000 in 2018, and for the six-month period, revenues were $454,000 compared to $1.4 million in 2018, primarily due to the completion of shipments for the flye card [23] Market Data and Key Metrics Changes - The company expanded its bank implementations to over 425 banks and entered 26 countries, indicating growth in market presence [24] - LogicMark's focus on government channels, particularly the VA, has maintained market share despite increased competition [28][45] Company Strategy and Development Direction - The company has withdrawn the planned spin-off of its fintech division and is now seeking other strategic opportunities to relieve cash flow pressures [9] - There is a strong focus on new product introductions in the healthcare sector, with expectations for innovative products to be launched by the end of 2019 and early 2020 [8][35] - The company is exploring additional marketing and advertising strategies to enhance its value proposition in competitive retail and commercial channels [31][32] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in retail performance and delays in product introductions as factors affecting growth, with a commitment to improving profitability through a focus on more profitable products [46][47] - The company is actively pursuing a range of opportunities, although larger opportunities may take longer to materialize [70] Other Important Information - The company closed the quarter with cash of about $1.3 million, with inventory levels increasing due to new stock received [20][21] - Interest expense for the six months ended June 30, 2019, was lower by approximately $521,000 compared to the same period in 2018, primarily due to lower interest on refinanced loans [18] Q&A Session Summary Question: What are the top three priorities for the company? - The main priority is focusing on healthcare and LogicMark growth, followed by reducing spending to move towards profitability, and exploring strategic opportunities for the fintech division [39][40] Question: Should investors expect a transaction regarding Fit Pay to take longer than two months? - Management indicated that the goodwill evaluation is a normal process and does not necessarily imply a timeline for the transaction [41] Question: What has led to the performance tracking below the expected 10% annual growth? - Management cited slower retail performance and delays in product introductions as contributing factors [46][47] Question: What new products are expected to be released? - New products include an updated 4G PERS device and new cellular and WiFi wearable devices [48][49] Question: What are the biggest obstacles in generating revenue for Fit Pay? - The main obstacle has been the lengthy certification process for devices, which has delayed product launches [50][52] Question: What is the current interest rate on the company's debt? - The approximate interest rate is 13%, with about $300,000 of that being non-cash for the six months [76][81]

[PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section covers unaudited financial statements, notes, and management's discussion and analysis [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents Nxt-ID, Inc.'s unaudited condensed consolidated financial statements, including balance sheets, income statements, equity changes, cash flows, and detailed explanatory notes [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section provides a snapshot of the company's financial position at specific dates **Condensed Consolidated Balance Sheet Highlights (Unaudited):** | Metric | June 30, 2019 ($) | December 31, 2018 ($) | | :-------------------------------- | :------------ | :---------------- | | Total Current Assets | $3,628,594 | $3,397,728 | | Total Assets | $37,865,290 | $38,055,564 | | Total Current Liabilities | $6,587,022 | $5,144,260 | | Total Liabilities | $22,321,943 | $21,511,506 | | Total Stockholders' Equity | $13,736,047 | $14,736,758 | [Condensed Consolidated Statements of Operations (Six Months Ended June 30, 2019 and 2018)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20(Six%20Months%20Ended%20June%2030%2C%202019%20and%202018)) This section details the company's financial performance over the six-month periods ended June 30, 2019 and 2018 **Condensed Consolidated Statements of Operations (Six Months Ended June 30):** | Metric | 2019 ($) | 2018 ($) | | :------------------------------------ | :----------- | :----------- | | Revenues | $8,668,521 | $8,715,045 | | Gross Profit | $6,569,554 | $6,312,154 | | Total Operating Expenses | $5,498,452 | $5,671,376 | | Operating Income | $1,071,102 | $640,778 | | Net Loss | $(4,655,674) | $(2,611,625) | | Net Loss applicable to Common Stockholders | $(4,755,674) | $(2,661,625) | | Net Loss Per Share – Basic and Diluted | $(0.17) | $(0.11) | [Condensed Consolidated Statements of Operations (Three Months Ended June 30, 2019 and 2018)](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20(Three%20Months%20Ended%20June%2030%2C%202019%20and%202018)) This section details the company's financial performance over the three-month periods ended June 30, 2019 and 2018 **Condensed Consolidated Statements of Operations (Three Months Ended June 30):** | Metric | 2019 ($) | 2018 ($) | | :------------------------------------ | :----------- | :----------- | | Revenues | $4,486,811 | $4,378,530 | | Gross Profit | $3,407,478 | $3,182,986 | | Total Operating Expenses | $2,844,027 | $2,736,691 | | Operating Income | $563,451 | $446,295 | | Net Loss | $(3,357,127) | $(998,812) | | Net Loss applicable to Common Stockholders | $(3,432,127) | $(1,023,812) | | Net Loss Per Share – Basic and Diluted | $(0.12) | $(0.04) | [Condensed Consolidated Statements of Changes in Equity (Six Months Ended June 30, 2019)](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Equity%20(Six%20Months%20Ended%20June%2030%2C%202019)) This section outlines the changes in the company's equity for the six months ended June 30, 2019 **Changes in Equity (Six Months Ended June 30, 2019):** | Item | Amount ($) | | :------------------------------------ | :----------- | | Balance - January 1, 2019 | $14,736,758 | | Issuance of common stock for services | $446,990 | | Issuance of common stock for cash, net of fees | $3,197,810 | | Shares issued for management incentive plan | $216,267 | | Fees incurred in connection with equity offerings | $(106,104) | | Net loss | $(4,655,674) | | Preferred stock dividends | $(100,000) | | Balance - June 30, 2019 | $13,736,047 | [Condensed Consolidated Statements of Changes in Equity (Three Months Ended June 30, 2019)](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Equity%20(Three%20Months%20Ended%20June%2030%2C%202019)) This section outlines the changes in the company's equity for the three months ended June 30, 2019 **Changes in Equity (Three Months Ended June 30, 2019):** | Item | Amount ($) | | :------------------------------------ | :----------- | | Balance – April 1, 2019 | $14,827,899 | | Issuance of common stock for services | $261,740 | | Issuance of common stock for cash, net of fees | $1,915,000 | | Shares issued for management incentive plan | $169,467 | | Fees incurred in connection with equity offerings | $(5,932) | | Net loss | $(3,357,127) | | Preferred stock dividends | $(75,000) | | Balance – June 30, 2019 | $13,736,047 | [Condensed Consolidated Statements of Cash Flows (Six Months Ended June 30, 2019 and 2018)](index=12&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20(Six%20Months%20Ended%20June%2030%2C%202019%20and%202018)) This section presents the cash inflows and outflows from operating, investing, and financing activities **Condensed Consolidated Statements of Cash Flows (Six Months Ended June 30):** | Cash Flow Activity | 2019 ($) | 2018 ($) | | :------------------------------------------------ | :------------ | :------------ | | Net Cash Provided by (Used in) Operating Activities of Continuing Operations | $668,661 | $(1,191,990) | | Net Cash Used in Investing Activities of Continuing Operations | $(161,434) | $(3,158,340) | | Net Cash Provided by Financing Activities of Continuing Operations | $1,489,122 | $2,901,066 | | Net Decrease in Cash and Restricted Cash | $(120,968) | $(3,849,615) | | Cash and Restricted Cash – End of Period | $1,493,673 | $1,827,171 | [Notes to Condensed Consolidated Financial Statements](index=14&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements [Note 1 – Organization and Basis of Presentation](index=14&type=section&id=Note%201%20%E2%80%93%20Organization%20and%20Basis%20of%20Presentation) This note describes the company's business, subsidiaries, and the basis for financial statement preparation - Nxt-ID, Inc. operates as a security technology company, developing proprietary hardware and software security systems and applications for security, healthcare, financial technology, and IoT markets. Key subsidiaries include LogicMark (personal emergency response systems) and Fit Pay (payment, credential management, authentication for IoT)[30](index=30&type=chunk)[31](index=31&type=chunk) - The company reclassified its financial technology business (Fit Pay) to discontinued operations due to a planned spin-off, which was later withdrawn. A non-binding letter of intent for a potential sale of Fit Pay (excluding certain assets) was entered into on August 6, 2019[32](index=32&type=chunk) [Note 2 – Liquidity And Management Plans](index=15&type=section&id=Note%202%20%E2%80%93%20Liquidity%20And%20Management%20Plans) This note discusses the company's liquidity position and management's plans to address financial sustainability - The company generated operating income of **$1,071,102** but incurred a net loss from continuing operations of **$2,465,134** for the six months ended June 30, 2019, raising substantial doubt about its ability to sustain operations for at least one year[35](index=35&type=chunk) - As of June 30, 2019, the company had a working capital deficiency of **$2,976,398** and stockholders' equity of **$13,736,047**. Management believes current cash and projected cash flow will be sufficient for the next twelve months, but may need additional financing[35](index=35&type=chunk) **Cash and Restricted Cash (June 30):** | Metric | 2019 ($) | 2018 ($) | | :---------------- | :----------- | :----------- | | Cash | $1,303,172 | $1,313,305 | | Restricted cash | $190,501 | $513,866 | [Note 3 – Summary Of Significant Accounting Policies](index=15&type=section&id=Note%203%20%E2%80%93%20Summary%20Of%20Significant%20Accounting%20Policies) This note outlines the key accounting principles and methods used in preparing the financial statements - Revenue is recognized at a point-in-time when control of the product transfers to the customer, typically upon shipment or delivery and acceptance[41](index=41&type=chunk) - The company adopted ASU 2016-02, 'Leases (Topic 842)', on January 1, 2019, recognizing Right-of-Use (ROU) assets of approximately **$267,516** and related lease liabilities of **$269,820**, with no material impact on income or cash flow statements for the six months ended June 30, 2019[56](index=56&type=chunk) **Other Intangible Assets (LogicMark Acquisition):** | Asset Type | June 30, 2019 ($) | December 31, 2018 ($) | | :-------------------- | :------------ | :---------------- | | Patents | $3,006,328 | $3,191,159 | | Trademarks | $1,073,066 | $1,104,246 | | Customer relationships | $2,304,921 | $2,466,687 | | Total Amortization Expense (6 months) | $377,777 | $377,777 | | Total Amortization Expense (3 months) | $189,932 | $189,932 | [Note 4 – Discontinued Operations](index=18&type=section&id=Note%204%20%E2%80%93%20Discontinued%20Operations) This note details the financial results and reclassification of the company's discontinued financial technology business - The financial technology product line (Fit Pay subsidiary and related IP) was reclassified as discontinued operations[59](index=59&type=chunk) **Financial Results of Discontinued Operations (Six Months Ended June 30):** | Metric | 2019 ($) | 2018 ($) | | :------------------------ | :----------- | :----------- | | Net sales | $454,062 | $1,399,268 | | Gross profit | $332,186 | $671,550 | | Loss from discontinued operations | $(2,190,540) | $(1,869,839) | **Financial Results of Discontinued Operations (Three Months Ended June 30):** | Metric | 2019 ($) | 2018 ($) | | :------------------------ | :----------- | :----------- | | Net sales | $232,586 | $805,175 | | Gross profit | $173,691 | $339,589 | | Loss from discontinued operations | $(1,184,966) | $(933,881) | [Note 5 – Debt refinancings](index=19&type=section&id=Note%205%20%E2%80%93%20Debt%20refinancings) This note explains the company's recent debt refinancing activities and their financial impact - On May 3, 2019, LogicMark completed a **$16,500,000** senior secured term loan with CrowdOut Capital LLC, using proceeds to repay the existing **$16,000,000** term loan with Sagard Holdings Manager LP[64](index=64&type=chunk) - The new term loan matures on May 3, 2021, bears interest at LIBOR plus **11.0%** (approx. **13.40%** as of June 30, 2019), and incurred **$412,500** in original issue discount and **$1,831,989** in deferred debt issue costs (including a **$1,072,500** exit fee)[64](index=64&type=chunk) - A loss on extinguishment of debt of **$2,343,879** was incurred due to the refinancing, including write-offs of unamortized costs and a yield maintenance premium/prepayment penalty to Sagard[65](index=65&type=chunk) [Note 6 – Stockholders' Equity](index=20&type=section&id=Note%206%20%E2%80%93%20Stockholders'%20Equity) This note provides details on changes in stockholders' equity, including stock issuances and warrants - During the six months ended June 30, 2019, the company received **$3,197,810** in net proceeds from the sale of **3,553,363** common shares under an At-the-Market Offering with A.G.P./Alliance Global Partners[69](index=69&type=chunk) - The company issued **247,805** common shares (fair value **$200,000**) to non-employee directors under the 2013 Long-Term Stock Incentive Plan and **289,216** common shares (fair value **$216,267**) to non-executive employees under the 2017 and 2018 management incentive plan[71](index=71&type=chunk)[73](index=73&type=chunk) - As of June 30, 2019, there were **7,206,584** outstanding warrants to purchase common stock with a weighted average exercise price of **$3.76** and a remaining life of **3.73 years**[75](index=75&type=chunk) [Note 7 – Commitments and Contingencies](index=22&type=section&id=Note%207%20%E2%80%93%20Commitments%20and%20Contingencies) This note discloses the company's lease obligations, debt maturities, and potential contingent liabilities - The company leases office space and a fulfillment center, classified as operating leases, with terms generally between 3 and 5 years. Total operating lease cost for the six months ended June 30, 2019, was **$83,216**[79](index=79&type=chunk)[82](index=82&type=chunk) **Future Minimum Undiscounted Lease Payments (as of June 30, 2019):** | Year Ending December 31, | Amount ($) | | :------------------------------------------ | :------- | | 2019 (remainder) | $84,682 | | 2020 | $88,827 | | 2021 | $23,279 | | 2022 | $18,186 | | 2023 | $12,124 | | Total future minimum lease payments | $227,098 | | Less imputed interest | $(26,605) | | Total present value of future minimum lease payments | $200,493 | **Debt Maturity Schedule:** | Year | Amount ($) | | :---------------- | :----------- | | 2019 (remainder) | $965,855 | | 2020 | $2,275,461 | | 2021 | $2,222,220 | | 2022 | $11,343,750 | | Total debt | $16,807,286 | [Note 8 – Subsequent Events](index=24&type=section&id=Note%208%20%E2%80%93%20Subsequent%20Events) This note reports significant events that occurred after the balance sheet date, impacting the company's operations - On July 23, 2019, the company received a default notice from CrowdOut Capital for failing to spin off the Fintech business by July 2, 2019. This default was waived on July 25, 2019, after Fit Pay's assets were included as collateral and Fit Pay became a guarantor of the term debt facility[89](index=89&type=chunk) - PartX withdrew its Form 10 registration statement for the spin-off on August 19, 2019, due to an inability to secure sufficient investment. The company entered into a non-binding letter of intent for a potential sale of its FitPay subsidiary (excluding certain assets) on August 6, 2019[91](index=91&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section offers management's analysis of financial condition, operational results, liquidity, and capital resources for the reported periods [Overview](index=26&type=section&id=Overview) This section provides a high-level summary of the company's business and recent strategic developments - Nxt-ID, Inc. is a security technology company focused on hardware and software security systems for healthcare, financial technology, and IoT markets through its subsidiaries LogicMark and Fit Pay[94](index=94&type=chunk)[95](index=95&type=chunk) - The planned spin-off of the financial technology business (Fit Pay) was withdrawn due to insufficient investment, leading to a non-binding letter of intent for its potential sale. A default notice from CrowdOut Capital related to the spin-off failure was subsequently waived[96](index=96&type=chunk)[97](index=97&type=chunk) [Healthcare](index=27&type=section&id=Healthcare) This section details the company's healthcare segment, focusing on LogicMark's products and market strategy - LogicMark drives the company's healthcare initiatives, focusing on personal emergency response systems (PERS) and serving the VA, healthcare dealers, and security dealers. The business is experiencing steady growth, with 2018 achieving its **highest annual revenue**[99](index=99&type=chunk) - Strategic plans include expanding LogicMark into other healthcare verticals, retail, and enterprise channels, leveraging trends like increased connectivity, TeleHealth growth, and rising healthcare costs[99](index=99&type=chunk) [Payments and Financial Technology](index=28&type=section&id=Payments%20and%20Financial%20Technology) This section describes Fit Pay's platform, its payment capabilities, and market expansion initiatives - Fit Pay's proprietary platform enables contactless payment capabilities for smart devices, connecting manufacturers to major payment card networks and issuing banks globally. It powers Garmin Pay™ and SwatchPAY - The Garmin Pay™ network has expanded significantly, now including over **280 issuing banks** in **34 countries**, up from 60 banks in 8 countries at year-end 2017[104](index=104&type=chunk) - Fit Pay is a technology partner for Visa's Token Service for credential-on-file (COF) token requestors, expanding its addressable market for platform services by tokenizing sensitive payment information for enhanced security and seamless updates[107](index=107&type=chunk)[108](index=108&type=chunk) [Results of Operations](index=29&type=section&id=Results%20of%20Operations) This section analyzes the company's revenue, gross profit, operating expenses, and net loss for the periods presented **Revenue from Continuing Operations:** | Period | 2019 ($) | 2018 ($) | Change (%) | | :-------------------- | :----------- | :----------- | :--------- | | Six Months Ended June 30 | $8,668,521 | $8,715,045 | -0.53% | | Three Months Ended June 30 | $4,486,811 | $4,378,530 | +2.47% | **Gross Profit from Continuing Operations:** | Period | 2019 ($) | 2018 ($) | Change (%) | | :-------------------- | :----------- | :----------- | :--------- | | Six Months Ended June 30 | $6,569,554 | $6,312,154 | +4.08% | | Three Months Ended June 30 | $3,407,478 | $3,182,986 | +7.05% | **Operating Income from Continuing Operations:** | Period | 2019 ($) | 2018 ($) | Change (%) | | :-------------------- | :----------- | :----------- | :--------- | | Six Months Ended June 30 | $1,071,102 | $640,778 | +67.16% | | Three Months Ended June 30 | $563,451 | $446,295 | +26.25% | **Net Loss from Continuing Operations:** | Period | 2019 ($) | 2018 ($) | Change (%) | | :-------------------- | :------------ | :----------- | :--------- | | Six Months Ended June 30 | $(2,465,134) | $(741,786) | +232.32% | | Three Months Ended June 30 | $(2,172,161) | $(64,931) | +3245.29% | - The increase in gross profit is primarily due to a favorable shift in product sales mix towards higher-priced mobile products, partially offsetting decreased commercial sales volume in LogicMark[112](index=112&type=chunk) - The significant increase in net loss from continuing operations for both periods is largely attributable to a **$2,343,879** loss on extinguishment of debt in 2019, compared to **$68,213** in 2018[118](index=118&type=chunk)[119](index=119&type=chunk) [Liquidity and Capital Resources](index=30&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's cash position, working capital, and ability to meet its financial obligations - As of June 30, 2019, the company had cash of **$1,303,172** and a working capital deficiency of **$2,976,398** for continuing operations, raising substantial doubt about its ability to continue as a going concern[122](index=122&type=chunk)[126](index=126&type=chunk)[127](index=127&type=chunk) **Net Cash Flow from Continuing Operations (Six Months Ended June 30):** | Activity | 2019 ($) | 2018 ($) | | :-------------------- | :----------- | :------------ | | Operating Activities | $668,661 | $(1,191,990) | | Investing Activities | $(161,434) | $(3,158,340) | | Financing Activities | $1,489,122 | $2,901,066 | - Net cash provided by financing activities in 2019 was primarily from **$3,197,810** in common stock sales and **$14,670,579** from the CrowdOut Capital refinancing, partially offset by **$16,000,000** repayment of the Sagard term loan[125](index=125&type=chunk) [Impact of Inflation](index=32&type=section&id=Impact%20of%20Inflation) This section assesses the historical and projected impact of inflation on the company's business and profit margins - The company believes its business has not been significantly affected by inflation in the past three years and expects to maintain profit margins through productivity improvements and cost reduction programs for the remainder of fiscal year 2019[131](index=131&type=chunk) [Off Balance Sheet Arrangements](index=32&type=section&id=Off%20Balance%20Sheet%20Arrangements) This section confirms the absence of material off-balance sheet arrangements that could affect the company's financial position - The company does not have relationships with unconsolidated entities or financial partnerships for off-balance sheet arrangements, nor does it have undisclosed borrowings or synthetic leases, thus not materially exposed to related risks[132](index=132&type=chunk) [Recent Accounting Pronouncements](index=32&type=section&id=Recent%20Accounting%20Pronouncements) This section refers to disclosures regarding recently adopted and evaluated accounting standards - Refer to Note 3 for details on recent accounting pronouncements, including the adoption of ASU 2016-02 (Leases) and evaluation of ASU 2018-13 (Fair Value Measurements)[133](index=133&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=33&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, Nxt-ID, Inc. is not required to provide quantitative and qualitative disclosures about market risk - The company is exempt from providing market risk disclosures as it qualifies as a smaller reporting company[135](index=135&type=chunk) [Item 4. Controls and Procedures](index=33&type=section&id=Item%204.%20Controls%20and%20Procedures) This section evaluates the effectiveness of disclosure controls and internal controls over financial reporting, noting material weaknesses [Disclosure Controls and Procedures](index=33&type=section&id=Disclosure%20Controls%20and%20Procedures) This section details the assessment of disclosure controls and identifies material weaknesses in internal financial reporting controls - Management concluded that disclosure controls and procedures were **not effective** as of June 30, 2019, due to material weaknesses in internal controls over financial reporting[136](index=136&type=chunk) - Material weaknesses include difficulty in accounting for complex transactions due to insufficient experienced accounting personnel and limited segregation of duties. An assistant controller has been hired to address this, but more time is needed for remediation[137](index=137&type=chunk) [Changes in Internal Controls](index=33&type=section&id=Changes%20in%20Internal%20Controls) This section reports on any material changes to internal control over financial reporting during the period - There were no changes in the company's internal control over financial reporting during the three months ended June 30, 2019, that materially affected or are reasonably likely to materially affect internal control over financial reporting[138](index=138&type=chunk) [Limitations of the Effectiveness of Controls](index=33&type=section&id=Limitations%20of%20the%20Effectiveness%20of%20Controls) This section acknowledges the inherent limitations of internal controls, which provide reasonable but not absolute assurance - Management acknowledges that internal controls provide only reasonable, not absolute, assurance and can be circumvented by faulty judgment, simple errors, individual acts, collusion, or management override[139](index=139&type=chunk) [PART II. OTHER INFORMATION](index=34&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section includes information on legal proceedings, risk factors, equity sales, defaults, and exhibits [Item 1. Legal Proceedings](index=34&type=section&id=Item%201.%20Legal%20Proceedings) No pending or threatened legal actions are expected to have a material adverse effect on the company's business, operating results, or financial condition - No pending or threatened legal actions are expected to have a material adverse effect on the company's business, operating results, or financial condition[142](index=142&type=chunk) [Item 1A. Risk Factors](index=34&type=section&id=Item%201A.%20Risk%20Factors) The company is not required to provide risk factor disclosures as it qualifies as a smaller reporting company - The company is not required to provide risk factor disclosures as it qualifies as a smaller reporting company[143](index=143&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=34&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities or use of proceeds to report - No unregistered sales of equity securities or use of proceeds to report[144](index=144&type=chunk) [Item 3. Defaults upon Senior Securities](index=34&type=section&id=Item%203.%20Defaults%20upon%20Senior%20Securities) No defaults upon senior securities to report - No defaults upon senior securities to report[145](index=145&type=chunk) [Item 4. Mine Safety Disclosures](index=34&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Mine Safety Disclosures are not applicable to the company - Mine Safety Disclosures are not applicable to the company[146](index=146&type=chunk) [Item 5. Other Information](index=34&type=section&id=Item%205.%20Other%20Information) No material changes to procedures for security holders to recommend Board nominees - No material changes to procedures for security holders to recommend Board nominees[147](index=147&type=chunk) [Item 6. Exhibits](index=34&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including various agreements, certifications, and XBRL documents - Exhibits include the LogicMark, LLC Senior Secured Credit Agreement, Security Agreement, Securities Pledge Agreement, Intellectual Property Security Agreement, Guaranty, and certifications (302 and 906) for principal executive and financial officers, along with XBRL documents[148](index=148&type=chunk) [Signatures](index=35&type=section&id=Signatures) This section contains the official signatures of the company's principal executive and financial officers - The report was signed by Gino M. Pereira, Chief Executive Officer, and Vincent S. Miceli, Principal Financial Officer, on August 19, 2019[152](index=152&type=chunk)

Nxt-ID, Inc. (NXTD) Q1 2019 Results Conference Call May 16, 2019 4:30 PM ET Company Participants Gino Pereira - Chief Executive Officer Vin Miceli - Chief Financial Officer Stan Washington - Chief Revenue Officer and Head of our Health Care Division Mike Orlando - Chief Operating Officer and President of Fit Pay Conference Call Participants Brian Kinstlinger - Alliance Global Operator Hello, and welcome to the Nxt-ID Q1 Investors Update Conference Call. At this time, all participants are in a listen only mo ...

Financial Performance - Revenue for the three months ended March 31, 2019, was $4,181,710, a decrease of 3.6% from $4,336,515 in the same period of 2018[97] - Gross profit for the three months ended March 31, 2019, was $3,162,076, an increase of 1.1% from $3,129,168 in the same period of 2018[98] - Operating profit for the three months ended March 31, 2019, was $507,651, compared to an operating profit of $194,483 for the same period in 2018, reflecting a significant improvement[101] - Net loss from continuing operations for the three months ended March 31, 2019, was $292,973, a reduction from a net loss of $676,855 in the same period of 2018[102] - As of March 31, 2019, the Company generated operating income of $507,651 but incurred a net loss of $292,973 from continuing operations[108] Cash and Equity Position - Cash provided by operating activities for the three months ended March 31, 2019, totaled $765,858, compared to a net cash used of $65,450 in the same period of 2018[105] - As of March 31, 2019, the company had cash of $1,227,803 and stockholders' equity of $14,827,899, with a working capital deficiency of $1,736,869[104] - The Company had a working capital deficiency of $1,736,869 and stockholders' equity of $14,827,899 as of March 31, 2019[108] - Cash position as of March 31, 2019, was $1,227,803[109] - The Company anticipates sufficient capital to sustain operations over the next twelve months, but may need to raise additional funds through equity offerings or debt financings[110] - There is no assurance that cash raised after March 31, 2019, will be sufficient to execute the business plan or meet obligations[111] Business Strategy and Market Trends - Fit Pay's technology enables contactless payment capabilities and has expanded its network to over 280 issuing banks in 34 countries, significantly increasing revenue opportunities[90] - LogicMark's healthcare initiatives are driven by trends such as increased connectivity and the growth of TeleHealth, targeting an aging population and rising healthcare costs[85] - The company plans to expand LogicMark's business into other healthcare verticals and retail channels to meet the growing demand for connected healthcare solutions[85] - Fit Pay's initial consumer product, Flip™, allows Bitcoin holders to make contactless payments, representing a unique offering in an emerging market segment[92] Risk Management - Inflation has not significantly affected the business in the past three years, and the Company expects to maintain profit margins through efficiency improvements and cost reduction programs[112] - The Company does not have any off-balance sheet arrangements or undisclosed borrowings, minimizing exposure to financing and liquidity risks[113] - The Company is classified as a smaller reporting company and is not required to provide certain market risk disclosures[116]

Financial Data and Key Metrics Changes - Revenues from continuing operations for the year ended December 31, 2018, were approximately $17.1 million, up from $16 million in 2017, representing an increase of just under 7% [11] - Gross profit margin for 2018 was approximately 72%, compared to 68% in 2017, primarily due to increased sales volume and a favorable shift in product sales mix [12] - Operating income from continuing operations for 2018 was just under $600,000, compared to an operating loss of $2.2 million in 2017 [13] - Net loss from continuing operations for 2018 was approximately $1.3 million, significantly improved from a net loss of $8.5 million in 2017 [13] - Operating cash flow for 2018 was a use of cash of about $50,000, indicating a positive outlook for future cash generation [15] Business Line Data and Key Metrics Changes - The Payments Division expanded its platform and capabilities, supporting Garmin Pay on 15 devices and in 300 banks across 44 countries [18] - LogicMark's revenue for 2018 increased by 6.7%, with a gross margin of 73%, reflecting strong performance in government channels [25] - The company launched retail partnerships with Walmart.com and is preparing for a launch with Best Buy, aiming to enhance direct-to-consumer sales [25] Market Data and Key Metrics Changes - The company is focusing on deeper penetration into government channels, particularly the VA, and expanding into other federal agencies [36] - The retail channel is expected to contribute positively to revenue growth, with ongoing digital advertising efforts to drive sales [38] Company Strategy and Development Direction - The company aims to continue building on its foundation while developing new products for future growth [30] - The spin-off of Fit Pay is a key strategic move, with expectations for increased revenue and market presence in 2019 and beyond [33][34] - The company is targeting key verticals such as hospitality and real estate for growth opportunities [26] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth potential in both healthcare and fintech sectors, with exciting new products in the pipeline [30] - The company is focused on reducing costs while increasing revenue, indicating a strong outlook for 2019 [30] Other Important Information - The company is in the process of refinancing its current term loan to facilitate the spin-off [6][7] - The anticipated filing of the registration statement with the SEC for the spin-off is expected soon [7] Q&A Session Summary Question: What will the spin-off look like in 2019 and 2020? - The spin-off will consist of Fit Pay and financial assets from Nxt-ID, with expectations for continued development and revenue growth in 2019, and multiplier effects in 2020 [33] Question: Are there more opportunities in government channels for LogicMark? - There are additional opportunities in other government agencies, and the company is confident in driving incremental revenue through these channels [36] Question: When can we expect Q1 results? - Q1 results are expected around mid-May, following the filing deadline [40] Question: What is the growth rate for LogicMark as a standalone business? - The traditional VA business is expected to grow at 7% to 10%, with new channels contributing significantly in the second half of the year [41] Question: How is the Walmart relationship performing? - The company is in a learning phase with Walmart, gathering data and feedback to optimize their approach [42] Question: What are the expectations for the Flip device? - The Flip is seen as a key product for entering the crypto market and establishing technology components for future partnerships [45] Question: What is the timeline for the SwatchPAY rollout? - Specific expansion plans for SwatchPAY cannot be shared, but the model is being deployed through their retail channels [46] Question: How to minimize the time between the record date and trading of the spin-off? - The company is focused on minimizing this time, but specific dates are difficult to provide due to various moving parts [48][50]

PART I [Business Overview](index=5&type=section&id=Item%201.%20Business) Nxt-ID develops proprietary products for security, healthcare, FinTech, and IoT markets, with a planned spin-off of its FinTech business - Nxt-ID is a technology company focused on security, healthcare, FinTech, and IoT markets, leveraging expertise in access control, biometrics, security, encryption, payments, miniaturization, and sensor technologies[16](index=16&type=chunk) - The company operates through two main subsidiaries: LogicMark, which manufactures and distributes Personal Emergency Response Systems (PERS), and Fit Pay, Inc., which provides a proprietary technology platform for contactless payment capabilities and secure services within the IoT ecosystem[17](index=17&type=chunk) - On September 21, 2018, Nxt-ID announced a plan to separate its payments, authentication, and credential management business (Fit Pay) into an independent publicly traded company via a tax-free spin-off[18](index=18&type=chunk) [Healthcare Business (LogicMark)](index=6&type=section&id=Healthcare) LogicMark, Nxt-ID's healthcare subsidiary, focuses on personal emergency response systems (PERS), driven by connectivity, TeleHealth, and cost reduction, offering non-monitored and monitored products - LogicMark's business initiatives in healthcare are driven by three major market trends: increased desire for connectivity among older demographics, growth of 'TeleHealth' for distributed doctor care, and the need to reduce rising healthcare costs[21](index=21&type=chunk) - The global PERS market is projected to grow at a CAGR of **5.83%** to **$8.4 billion** in 2020, with North America and Europe being the largest markets[24](index=24&type=chunk) - LogicMark differentiates itself by offering cost-effective non-monitored PERS products, primarily sold through the VA and healthcare distributors, requiring only a one-time purchase fee instead of recurring monthly contracts[26](index=26&type=chunk)[27](index=27&type=chunk) [Payments and Financial Technology Business (Fit Pay)](index=9&type=section&id=Payments%20and%20Financial%20Technology) Fit Pay, reclassified to discontinued operations, provides a proprietary platform for contactless payments in smart devices, connecting manufacturers to payment networks and expanding into cryptocurrency and tokenization - Fit Pay's core technology is a proprietary platform enabling contactless payment capabilities for smart device manufacturers, connecting them to leading payment card networks (Visa, Mastercard, Maestro, Discover) and over **280** issuing banks in **34** countries[34](index=34&type=chunk)[35](index=35&type=chunk)[44](index=44&type=chunk) - Fit Pay successfully commercialized its platform with Garmin Pay™ (now on **11** Garmin smartwatches) and extended functionality to SwatchPAY! on four new watches[34](index=34&type=chunk) - New product offerings include Flip™, a contactless payment device enabling Bitcoin holders to make retail purchases, and real-time e-commerce/credential-on-file tokenization services in partnership with Visa[37](index=37&type=chunk)[38](index=38&type=chunk)[45](index=45&type=chunk) - Fit Pay holds competitive advantages as one of the few platform providers certified by major card networks for embedded secure element tokenization, offering a white-label, power-efficient, and offline payment solution[57](index=57&type=chunk)[60](index=60&type=chunk) [Our Intellectual Property](index=13&type=section&id=Our%20Intellectual%20Property) Nxt-ID protects its intellectual property through patents and trade secrets, with **11** awarded patents, while acknowledging risks of infringement claims and associated costs - Nxt-ID relies on patents and trade secret laws to protect its intellectual property, having filed **39** patent applications, with **11** awarded as of the report date[64](index=64&type=chunk) - The company faces risks of third-party infringement claims, which could lead to substantial defense costs, management distraction, and potential requirements to pay damages, re-engineer products, or obtain licenses[70](index=70&type=chunk) [Corporate Information](index=17&type=section&id=Corporate%20Information) Nxt-ID, incorporated in Delaware in 2012, grew through strategic acquisitions and had **34** full-time employees as of December 31, 2018 - Nxt-ID was incorporated in Delaware on February 8, 2012, and has expanded through acquisitions, including 3D-ID (2012), LogicMark (2016), and Fit Pay (2017)[72](index=72&type=chunk)[73](index=73&type=chunk)[74](index=74&type=chunk)[75](index=75&type=chunk) - As of December 31, 2018, Nxt-ID had **34** full-time employees: **3** in product engineering, **6** in finance and administration, **14** in sales and customer service, and **11** in product fulfillment[81](index=81&type=chunk) - The company ceased to be an 'emerging growth company' as of December 31, 2018[80](index=80&type=chunk) [Risk Factors](index=18&type=section&id=Item%201A.%20Risk%20Factors) Nxt-ID faces significant risks including revenue uncertainty, limited operating history, intense competition, IT disruptions, the need for capital, stock volatility, and potential delisting - The company faces uncertainty in generating sufficient revenue and profitability, having incurred a net loss from continuing operations of **$1,328,616** for the year ended December 31, 2018, and a working capital deficiency of **$1,603,466**[84](index=84&type=chunk)[85](index=85&type=chunk) - Significant disruptions of information technology systems or security breaches could adversely affect business operations, leading to loss of confidential information, financial harm, and reputational damage[87](index=87&type=chunk)[88](index=88&type=chunk) - Nxt-ID operates in rapidly evolving, intensely competitive markets, requiring continuous innovation and significant resources to develop new products and keep pace with technological changes, especially against larger, well-established competitors[91](index=91&type=chunk)[95](index=95&type=chunk)[96](index=96&type=chunk) - The market price for Nxt-ID's common stock is highly volatile due to its status as a relatively unknown company with a small and thinly traded public float and lack of profits, posing risks of substantial losses for investors[134](index=134&type=chunk) - The company's common stock could be delisted from the NASDAQ Capital Market if it fails to comply with continued listing requirements, potentially leading to reduced liquidity and investor confidence[135](index=135&type=chunk)[136](index=136&type=chunk) [Unresolved Staff Comments](index=30&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) No unresolved staff comments from the SEC - No unresolved staff comments[150](index=150&type=chunk) [Properties](index=30&type=section&id=Item%202.%20Properties) Nxt-ID leases principal executive offices in Sebastian, Florida, and additional office and warehouse spaces in Connecticut, Palm Bay, and Louisville - Nxt-ID's principal executive offices are located in Sebastian, Florida, under a three-year lease commenced June 1, 2018, with monthly rent increasing **3%** annually[151](index=151&type=chunk) - The company also leases office space in Oxford, Connecticut, and Palm Bay, Florida, both currently on a month-to-month basis[152](index=152&type=chunk)[153](index=153&type=chunk) - Following the LogicMark acquisition, Nxt-ID assumed and later renewed a three-year lease for office and warehouse space in Louisville, Kentucky, expiring in August 2020, with a monthly rent of **$7,157**[154](index=154&type=chunk) [Legal Proceedings](index=30&type=section&id=Item%203.%20Legal%20Proceedings) Nxt-ID is not involved in any material legal actions, suits, or proceedings that could significantly affect its business or financial condition - No material legal actions, suits, or proceedings are pending or threatened against Nxt-ID or its subsidiaries[155](index=155&type=chunk) [Mine Safety Disclosures](index=30&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to Nxt-ID, Inc - Not applicable[156](index=156&type=chunk) PART II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=31&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Nxt-ID's common stock trades on Nasdaq under 'NXTD', experiencing volatility, with **97** holders of record and no anticipated dividends - Nxt-ID's common stock trades on the Nasdaq Capital Market under the symbol 'NXTD'[159](index=159&type=chunk) - As of March 29, 2019, there were approximately **97** holders of record of Nxt-ID's common stock[161](index=161&type=chunk) - The company has never declared or paid dividends on its common stock and does not anticipate doing so in the foreseeable future, intending to retain future earnings for operations and expansion[163](index=163&type=chunk)[165](index=165&type=chunk) Common Stock Price Range (High/Low) by Quarter | Quarter | 2018 High ($) | 2018 Low ($) | 2017 High ($) | 2017 Low ($) | | :-------------------------- | :------------ | :----------- | :------------ | :----------- | | 1st Quarter | 3.98 | 1.72 | 4.17 | 1.66 | | 2nd Quarter | 2.23 | 1.52 | 2.87 | 1.21 | | 3rd Quarter | 2.04 | 1.25 | 2.80 | 1.45 | | 4th Quarter | 1.55 | 0.53 | 8.59 | 1.01 | [Selected Financial Data](index=32&type=section&id=Item%206.%20Selected%20Financial%20Data) As a smaller reporting company, Nxt-ID is not required to provide selected financial data - Nxt-ID is not required to provide selected financial data as it is a smaller reporting company[166](index=166&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=32&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Nxt-ID saw increased revenue and operating profit in 2018, but a net loss and working capital deficiency raise liquidity concerns, addressed by a **$16 million** term loan and equity offerings Key Financial Performance (Continuing Operations) | Metric | Year Ended Dec 31, 2018 | Year Ended Dec 31, 2017 | Change (YoY) | | :--------------------------------- | :---------------------- | :---------------------- | :----------- | | Revenues | $17,116,511 | $16,043,060 | +$1,073,451 (+6.69%) | | Gross Profit | $12,312,720 | $10,978,868 | +$1,333,852 (+12.15%) | | Gross Profit Margin | 72% | 68% | +4 percentage points | | Operating Expenses | $11,725,231 | $13,130,581 | -$1,405,350 (-10.70%) | | Operating Income (Loss) | $587,489 | ($2,151,713) | +$2,739,202 (Shift to Profit) | | Net Loss from Continuing Operations | ($1,328,616) | ($8,549,129) | +$7,220,513 (Reduced Loss) | Liquidity and Capital Resources (as of Dec 31, 2018) | Metric | Amount | | :--------------------------------- | :------------- | | Cash | $425,189 | | Stockholders' Equity | $14,736,758 | | Working Capital Deficiency (Continuing Operations) | ($1,603,466) | Cash Flow Activities (Continuing Operations) | Activity | Year Ended Dec 31, 2018 | Year Ended Dec 31, 2017 | | :--------------------------------- | :---------------------- | :---------------------- | | Net Cash Used in Operating Activities | ($50,189) | ($1,371,731) | | Net Cash Used in Investing Activities | ($3,166,854) | ($1,635,644) | | Net Cash Provided by Financing Activities | $3,063,334 | $9,587,460 | - The company raised approximately **$425,000** from warrant exercises in 2018 and **$1,322,484** in gross proceeds from an at-the-market offering in January-February 2019[178](index=178&type=chunk)[181](index=181&type=chunk)[203](index=203&type=chunk) - In May 2018, LogicMark secured a **$16 million** Senior Secured Credit Agreement (Term Loan) with Sagard Holdings Manager LP, maturing in May 2023, bearing interest at LIBOR + **9.5%** per annum[192](index=192&type=chunk)[420](index=420&type=chunk) - Nxt-ID adopted Topic 606 (Revenue from Contracts with Customers) as of January 1, 2018, using the modified retrospective method, recognizing revenue when control of products transfers to the customer, typically upon shipment or delivery[208](index=208&type=chunk)[209](index=209&type=chunk)[346](index=346&type=chunk)[347](index=347&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=34&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) As a smaller reporting company, Nxt-ID is not required to provide market risk disclosures - Nxt-ID is not required to provide quantitative and qualitative disclosures about market risk as it is a smaller reporting company[216](index=216&type=chunk) [Financial Statements and Supplementary Data](index=38&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This item refers to the audited consolidated financial statements, notes, and the independent auditor's report, beginning on page F-1 - The financial statements, notes, and independent registered public accounting firm's report are filed in response to this item and begin on page F-1[217](index=217&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=38&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) No changes in or disagreements with accountants on accounting and financial disclosure - No changes in or disagreements with accountants on accounting and financial disclosure[218](index=218&type=chunk) [Controls and Procedures](index=38&type=section&id=Item%209A.%20Controls%20and%20Procedures) Nxt-ID's disclosure controls and internal control over financial reporting were ineffective as of December 31, 2018, due to a material weakness in accounting personnel and segregation of duties - Management concluded that disclosure controls and procedures were not effective as of December 31, 2018, due to a material weakness in internal controls over financial reporting[219](index=219&type=chunk) - A material weakness was identified in internal controls over financial reporting due to an insufficient number of accounting personnel for complex transactions, limited segregation of duties, and an incomplete assessment under the 2013 COSO framework[222](index=222&type=chunk) - No changes in internal control over financial reporting materially affected or are reasonably likely to materially affect the company's internal control over financial reporting during the fourth quarter of fiscal year 2018[225](index=225&type=chunk) [Other Information](index=39&type=section&id=Item%209B.%20Other%20Information) No other information is required to be disclosed in this item - No other information to report[226](index=226&type=chunk) PART III [Directors, Executive Officers and Corporate Governance](index=40&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) This section lists Nxt-ID's executive officers and directors, details board committees, identifies an Audit Committee Financial Expert, and notes Section 16(a) reporting delinquencies Executive Officers and Directors (as of April 1, 2019) | Name | Age | Position | Date First Elected or Appointed | | :--------------------------------- | :-- | :--------------------------------------- | :------------------------------ | | Gino M. Pereira | 61 | Chief Executive Officer, President and Director | February 8, 2012 | | Vincent S. Miceli | 61 | Vice President and Chief Financial Officer | September 29, 2014 | | David Tunnell | 53 | Vice President and Chief Technology Officer | June 25, 2012 | | Michael J. Orlando | 51 | Chief Operating Officer and Director | May 23, 2017 | | Stanley E. Washington | 55 | Chief Revenue Officer and President Healthcare Division | January 1, 2018 | | Major General David R. Gust, USA, Ret | 76 | Director | June 25, 2012 | | Michael J. D'Almada-Remedios, PhD | 56 | Director | September 26, 2013 | | Daniel P. Sharkey | 62 | Director | June 23, 2014 | | John Bendheim | 65 | Director | April 11, 2017 | | Robert A. Curtis, Pharm.D. | 64 | Director | July 25, 2018 | - The board of directors has an Audit Committee, Compensation Committee, and Corporate Governance and Nomination Committee. Daniel P. Sharkey is identified as an Audit Committee Financial Expert[252](index=252&type=chunk)[253](index=253&type=chunk) - The company has adopted a Code of Business Ethics and Conduct, available on its website[260](index=260&type=chunk) - Certain officers and directors, including David Tunnell, Michael Orlando, and Robert A. Curtis, had delinquencies in Section 16(a) beneficial ownership reporting during fiscal year 2018[261](index=261&type=chunk) [Executive Compensation](index=45&type=section&id=Item%2011.%20Executive%20Compensation) This section details compensation for named executive officers and non-employee directors for 2018 and 2017, including salary, bonus, and stock awards Summary Compensation Table for Named Executive Officers | Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($) | All Other Compensation ($) | Total ($) | | :-------------------------- | :--- | :--------- | :-------- | :--------------- | :------------------------- | :-------- | | Gino M. Pereira, CEO | 2018 | 420,000 | 130,000 | 547,500 | 25,899 | 1,123,399 | | | 2017 | 381,150 | - | 100,000 | 25,780 | 506,930 | | Vincent S. Miceli, CFO | 2018 | 300,000 | 70,000 | 292,000 | 30,818 | 692,818 | | | 2017 | 265,650 | - | 70,000 | 26,724 | 362,374 | | Michael J. Orlando, COO | 2018 | 350,000 | 50,000 | 109,500 | - | 509,500 | | | 2017 | 130,942 | - | - | 5,381 | 136,323 | | Stanley E. Washington, CRO | 2018 | 250,000 | - | 912,500 | - | 1,162,500 | | | 2017 | - | - | - | - | - | - Gino M. Pereira's employment agreement was extended for three years from October 1, 2018, with a base salary of **$420,000**, and eligibility for bonus plans and equity awards[263](index=263&type=chunk)[474](index=474&type=chunk) - Michael J. Orlando's employment agreement, effective May 23, 2017, includes a base salary of **$350,000** (increased from **$150,000** in 2018) and eligibility for bonus plans and equity awards[263](index=263&type=chunk)[474](index=474&type=chunk) Director Compensation for Fiscal Year 2018 | Name | Stock Awards ($) | All Other Compensation ($) | Total ($) | | :--------------------------------- | :--------------- | :------------------------- | :-------- | | Major General David R. Gust, USA, Ret. | 80,000 | 1,757 | 81,757 | | Michael J. D'Almada Remedios, PhD | 80,000 | - | 80,000 | | Daniel P. Sharkey | 80,000 | 2,851 | 82,851 | | John Bendheim | 80,000 | 1,543 | 81,543 | | Robin A. Richards | 15,111 | - | 15,111 | | Robert A. Curtis, Pharm.D. | 40,000 | 1,700 | 41,700 | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=47&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) This section details beneficial ownership of common stock by key individuals and outlines shares authorized under equity compensation plans, limited to **10%** of outstanding shares Beneficial Ownership of Common Stock (as of March 29, 2019) | Name | Amount and Nature of Beneficial Ownership | Percent of Class of Common Stock | | :--------------------------------------- | :---------------------------------------- | :------------------------------- | | Gino M. Pereira | 904,015 | 3.42% | | David Tunnell | 695,933 | 2.63% | | Vincent S. Miceli | 85,191 | * | | Michael J. Orlando | 1,199,605 | 4.54% | | Stanley E. Washington | 125,000 | * | | Major General David R. Gust, USA, Ret. | 134,782 | * | | Michael J. D'Almada-Remedios, PhD | 140,150 | * | | Daniel P. Sharkey | 129,770 | * | | John Bendheim | 91,857 | * | | Robert A. Curtis, Pharm.D. | 44,679 | * | | Directors and Executive Officers as a Group (10 persons) | 3,550,982 | 13.43% | Equity Compensation Plan Information (as of Dec 31, 2018) | Plan Category | Number of Securities Remaining Available for Future Issuance under the Plan | | :------------------------------------------ | :------------------------------------------------------------------------ | | Equity compensation plans approved by security holders (LTIP) | 975,886 | | Equity compensation plans approved by security holders (2017 SIP) | 2,522,807 | | Total | 3,498,693 | - The maximum aggregate number of shares issuable under the LTIP and 2017 SIP is limited to **10%** of the common stock outstanding on the first trading day of any fiscal year, which is **2,522,807** shares for fiscal year ending December 31, 2019[283](index=283&type=chunk)[452](index=452&type=chunk)[453](index=453&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=48&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Nxt-ID had related party transactions with WorldVentures Holdings, LLC, with revenue decreasing significantly, and the Audit Committee reviews such transactions, while certain directors are deemed independent Revenue from Related Party (WorldVentures Holdings, LLC) | Metric | Year Ended Dec 31, 2018 | Year Ended Dec 31, 2017 | | :--------------------------------- | :---------------------- | :---------------------- | | Revenue from WVH | $737,993 | $7,065,755 | | Accounts Receivable from WVH (period end) | $0 | $1,364,405 | - The Audit Committee reviews and approves related party transactions to ensure they are on terms comparable to or more beneficial than arm's length dealings[281](index=281&type=chunk) - Major General David R. Gust, Daniel P. Sharkey, John Bendheim, and Dr. Robert A. Curtis are deemed 'independent' directors under NASDAQ rules[282](index=282&type=chunk) [Principal Accounting Fees and Services](index=49&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Marcum LLP served as Nxt-ID's auditor, billing approximately **$170,000** for audit services in 2018, with no other fees, and the Audit Committee pre-approves all services Principal Accounting Fees (Marcum LLP) | Fee Type | Year Ended Dec 31, 2018 | Year Ended Dec 31, 2017 | | :--------------------------------- | :---------------------- | :---------------------- | | Audit Fees | ~$170,000 | $286,192 | | Audit Related Fees | $0 | $0 | | Tax Fees | $0 | $0 | | All Other Fees | $0 | $0 | - The Audit Committee pre-approves all audit and non-audit services provided by the independent auditors[288](index=288&type=chunk) PART IV [Exhibits, Financial Statement Schedules](index=50&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists financial statements, schedules, and a comprehensive index of exhibits filed as part of the 10-K report - The report includes audited consolidated financial statements, notes, and the independent registered public accounting firm's report[291](index=291&type=chunk) - No financial statement schedules are included as they are either not applicable or the information is in the consolidated financial statements/notes[292](index=292&type=chunk) - A comprehensive list of exhibits is provided, with references to previously filed SEC documents where applicable[292](index=292&type=chunk)[296](index=296&type=chunk)[297](index=297&type=chunk)[480](index=480&type=chunk)[481](index=481&type=chunk) [Form 10-K Summary](index=50&type=section&id=Item%2016.%20Form%2010-K%20Summary) This item is not applicable to Nxt-ID, Inc - Not applicable[294](index=294&type=chunk) SIGNATURES - The report is signed by Gino M. Pereira (Chief Executive Officer and Director) and Vincent S. Miceli (Chief Financial Officer), along with other directors, on April 1, 2019[307](index=307&type=chunk)[308](index=308&type=chunk) Financial Statements [Report of Independent Registered Public Accounting Firm](index=55&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) Marcum LLP issued an unqualified opinion on Nxt-ID's consolidated financial statements for 2018 and 2017, affirming fair presentation in accordance with U.S. GAAP, without auditing internal control over financial reporting - Marcum LLP issued an unqualified opinion on Nxt-ID's consolidated financial statements for the years ended December 31, 2018 and 2017, affirming fair presentation in accordance with U.S. GAAP[313](index=313&type=chunk) - Marcum LLP has served as the company's auditor since 2016[317](index=317&type=chunk) - The audit did not include an opinion on the effectiveness of the company's internal control over financial reporting[315](index=315&type=chunk) [Consolidated Balance Sheets](index=56&type=section&id=Consolidated%20Balance%20Sheets) Consolidated balance sheets show total assets decreased from **$48.24 million** in 2017 to **$38.06 million** in 2018, with stockholders' equity declining to **$14.74 million** Consolidated Balance Sheet Highlights | Metric | December 31, 2018 ($) | December 31, 2017 ($) | | :--------------------------------- | :-------------------- | :-------------------- | | Cash | 425,189 | 5,636,415 | | Restricted cash | 1,189,452 | 40,371 | | Total Current Assets | 3,397,728 | 12,000,178 | | Assets associated with discontinued operations | 222,227 | 4,428,944 | | Total Assets | 38,055,564 | 48,242,745 | | Total Current Liabilities | 5,144,260 | 10,682,912 | | Total Liabilities | 21,511,506 | 27,305,278 | | Total Stockholders' Equity | 14,736,758 | 19,130,167 | [Consolidated Statements of Operations](index=57&type=section&id=Consolidated%20Statements%20of%20Operations) Consolidated statements of operations show increased revenues and a shift to operating income in 2018, but a **$7.09 million** net loss due to discontinued operations Consolidated Statements of Operations Highlights | Metric | Year Ended Dec 31, 2018 ($) | Year Ended Dec 31, 2017 ($) | | :--------------------------------- | :-------------------------- | :-------------------------- | | Revenues | 17,116,511 | 16,043,060 | | Gross Profit | 12,312,720 | 10,978,868 | | Operating Income (Loss) | 587,489 | (2,151,713) | | Loss from Continuing Operations | (1,328,616) | (8,549,129) | | (Loss) Income from Discontinued Operations, net of tax | (5,761,346) | 284,256 | | Net Loss | (7,089,962) | (8,264,873) | | Net Loss Per Share - Basic and Diluted | (0.29) | (0.70) | | Weighted Average Number of Common Shares Outstanding | 24,561,791 | 12,812,376 | [Consolidated Statements of Changes in Stockholders' Equity](index=58&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Stockholders%27%20Equity) Stockholders' equity decreased from **$19.13 million** in 2017 to **$14.74 million** in 2018, influenced by a **$7.09 million** net loss and equity transactions Changes in Stockholders' Equity Highlights | Metric | Year Ended Dec 31, 2018 ($) | Year Ended Dec 31, 2017 ($) | | :--------------------------------- | :-------------------------- | :-------------------------- | | Total Stockholders' Equity (Beginning) | 19,130,167 | 2,818,731 | | Net Loss | (7,089,962) | (8,264,873) | | Issuance of common stock for services | 846,983 | 3,153,569 | | Issuance of common stock and warrants for cash, net | - | 13,030,388 | | Warrants issued in connection with debt refinancing | 705,541 | - | | Warrant modification expense | 345,280 | 228,630 | | Total Stockholders' Equity (Ending) | 14,736,758 | 19,130,167 | [Consolidated Statements of Cash Flows](index=60&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Cash and restricted cash decreased by **$4.06 million** in 2018 to **$1.61 million**, driven by discontinued operations and investing activities, partially offset by financing Consolidated Statements of Cash Flows Highlights | Activity | Year Ended Dec 31, 2018 ($) | Year Ended Dec 31, 2017 ($) | | :--------------------------------- | :-------------------------- | :-------------------------- | | Net Cash Used in Operating Activities of Continuing Operations | (50,189) | (1,371,731) | | Net Cash Used in Investing Activities of Continuing Operations | (3,166,854) | (1,635,644) | | Net Cash Provided by Financing Activities of Continuing Operations | 3,063,334 | 9,587,460 | | Net (Decrease) Increase in Cash and Restricted Cash from Continuing Operations | (153,709) | 6,580,085 | | Net Cash Used by Discontinued Operations | (3,908,436) | (4,243,349) | | Net (Decrease) Increase in Cash and Restricted Cash | (4,062,145) | 2,336,736 | | Cash and Restricted Cash - End of Year | 1,614,641 | 5,676,786 | Supplemental Disclosures of Cash Flow Information | Item | Year Ended Dec 31, 2018 ($) | Year Ended Dec 31, 2017 ($) | | :--------------------------------- | :-------------------------- | :-------------------------- | | Cash paid for Interest | 3,153,450 | 3,396,040 | | Cash paid for Taxes | 13,843 | 4,500 | | Warrants issued in connection with debt refinancing | 706,541 | - | [Notes to Consolidated Financial Statements](index=62&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) [NOTE 1 - ORGANIZATION AND PRINCIPAL BUSINESS ACTIVITIES](index=62&type=section&id=NOTE%201%20-%20ORGANIZATION%20AND%20PRINCIPAL%20BUSINESS%20ACTIVITIES) Nxt-ID, incorporated in 2012, operates in security, healthcare, FinTech, and IoT, with key acquisitions of LogicMark and Fit Pay, and a planned spin-off of its FinTech business - Nxt-ID, Inc. was incorporated in Delaware on February 8, 2012, and operates in security, healthcare, financial technology, and IoT markets[330](index=330&type=chunk) - Key acquisitions include LogicMark, LLC (July 2016) for personal emergency response systems, and Fit Pay, Inc. (May 2017) for contactless payment technology[331](index=331&type=chunk)[332](index=332&type=chunk)[333](index=333&type=chunk) - On September 21, 2018, Nxt-ID announced the spin-off of its financial technology business (Fit Pay and related intellectual property) into a new independent publicly traded company, reclassifying it to discontinued operations[334](index=334&type=chunk) [NOTE 2 - LIQUIDITY AND MANAGEMENT PLANS](index=63&type=section&id=NOTE%202%20-%20LIQUIDITY%20AND%20MANAGEMENT%20PLANS) Nxt-ID's 2018 net loss and working capital deficiency raise substantial doubt about its ability to sustain operations, necessitating additional financing despite management's confidence in current capital - Nxt-ID incurred a net loss from continuing operations of **$1,328,616** and had a working capital deficiency of **$1,603,466** as of December 31, 2018, raising substantial doubt about its ability to sustain operations for at least one year[337](index=337&type=chunk) - Management believes that cash on hand, proceeds from subsequent equity offerings, and projected cash flow from operations will provide sufficient capital for the next twelve months[337](index=337&type=chunk) - The company may need to raise additional funds through equity offerings, debt financings, or other means to execute its long-term strategic plan and meet obligations[337](index=337&type=chunk)[339](index=339&type=chunk) [NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=63&type=section&id=NOTE%203%20-%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note outlines Nxt-ID's significant accounting policies, including the adoption of Topic 606 for revenue recognition, cash management, goodwill impairment, and other intangible asset amortization - Nxt-ID adopted Topic 606 (Revenue from Contracts with Customers) on January 1, 2018, using the modified retrospective method, recognizing revenue at a point-in-time when control of products transfers to the customer[346](index=346&type=chunk)[347](index=347&type=chunk) - Restricted cash of **$1,189,452** at December 31, 2018, includes amounts held by credit card processors and **$998,950** related to LogicMark's excess cash flow, which is required to be deposited into a restricted bank account controlled by Sagard Holdings Manager LP[343](index=343&type=chunk)[420](index=420&type=chunk) - Goodwill related to LogicMark was qualitatively assessed as not impaired in 2018, while Fit Pay's goodwill was quantitatively assessed as not impaired as of September 30, 2018, despite its reclassification to discontinued operations[361](index=361&type=chunk)[362](index=362&type=chunk) - Other intangible assets from the LogicMark acquisition (patents, trademarks, customer relationships) are amortized over **10-20** years, with an estimated annual amortization expense of approximately **$762,000** for the next five fiscal years[364](index=364&type=chunk)[365](index=365&type=chunk) [NOTE 4 - DISCONTINUED OPERATIONS](index=69&type=section&id=NOTE%204%20-%20DISCONTINUED%20OPERATIONS) Nxt-ID reclassified its financial technology business (Fit Pay) to discontinued operations in 2018, reporting a **$5.76 million** net loss and significantly reduced related party revenue - Nxt-ID's financial technology business (Fit Pay and related IP) was reclassified to discontinued operations as of September 21, 2018[334](index=334&type=chunk)[387](index=387&type=chunk) - Revenue from related party WorldVentures Holdings, LLC (WVH) decreased significantly from **$7,065,755** in 2017 to **$737,993** in 2018, with accounts receivable from WVH reducing to **$0** by December 31, 2018[387](index=387&type=chunk) Financial Results of Discontinued Operations | Metric | Year Ended Dec 31, 2018 ($) | Year Ended Dec 31, 2017 ($) | | :--------------------------------- | :-------------------------- | :-------------------------- | | Net sales | 1,696,414 | 7,273,909 | | Gross profit (loss) | (787,743) | 652,654 | | Operating expenses | 4,969,140 | 2,139,888 | | (Loss) income from discontinued operations | (5,761,346) | 284,256 | [NOTE 5 - ACQUISITIONS](index=70&type=section&id=NOTE%205%20-%20ACQUISITIONS) This note details the acquisitions of LogicMark (2016) and Fit Pay (2017), outlining their respective purchase considerations, including cash, stock, and earn-out payments - The LogicMark acquisition (July 2016) included **$17.5 million** cash, a **$2.5 million** secured promissory note, **78,740** common shares, and warrants. The 2017 earn-out payment of **$3,156,088** was paid in Q2 2018[331](index=331&type=chunk)[389](index=389&type=chunk) - The Fit Pay merger (May 2017) had an aggregate purchase price of **$10,104,184**, consisting of cash, **1,912,303** common shares, **2,000** Series C Preferred Stock shares, debt payments, and an earn-out provision[392](index=392&type=chunk)[396](index=396&type=chunk) - The earn-out provision for Fit Pay is **12.5%** of gross revenue for **16** fiscal quarters (Oct 2017 - Dec 2021), with a remaining balance of **$678,881** owed at December 31, 2018[392](index=392&type=chunk) - Goodwill of **$9,119,709** was recognized from the Fit Pay acquisition, representing expected operational synergies and unqualifying intangibles[398](index=398&type=chunk) [NOTE 6 - ACCRUED EXPENSES](index=71&type=section&id=NOTE%206%20-%20ACCUMULATED%20EXPENSES) Accrued expenses decreased from **$2.45 million** in 2017 to **$1.70 million** in 2018, with reductions in interest expense and amounts due to LogicMark Sellers Accrued Expenses Breakdown | Category | December 31, 2018 ($) | December 31, 2017 ($) | | :--------------------------------- | :-------------------- | :-------------------- | | Salaries and payroll taxes | 89,065 | 88,964 | | Consulting fees | 236,000 | 70,000 | | Professional fees | 84,704 | 31,781 | | Management incentives | 868,082 | 891,667 | | Interest expense | 16,342 | 639,030 | | Amount due to LogicMark Sellers | - | 421,606 | | Agent and loan amendment fees | 235,000 | - | | Totals | 1,701,561 | 2,448,157 | [NOTE 7 - CONVERTIBLE NOTES PAYABLE](index=73&type=section&id=NOTE%207%20-%20CONVERTIBLE%20NOTES%20PAYABLE) This note details the July 2017 and November 2016 exchange agreements for convertible notes and warrants, which were fully converted into common stock by December 31, 2017 - In July 2017, Nxt-ID amended November Notes and Warrants, lowering conversion/exercise prices from **$3.00** to **$2.00** per share, and issued **370,000** restricted common shares for a maturity date extension[403](index=403&type=chunk) - The company incurred non-cash charges for modification of convertible exchange note terms (**$191,630**) and warrant terms (**$37,000**) in 2017[404](index=404&type=chunk) - All July 2017 Notes and November 2016 Exchange Notes, along with accrued interest, were fully converted into common stock by December 31, 2017, eliminating their outstanding principal balances[406](index=406&type=chunk)[408](index=408&type=chunk) [NOTE 8 - FAIR VALUE MEASUREMENTS](index=74&type=section&id=NOTE%208%20-%20FAIR%20VALUE%20MEASUREMENTS) Nxt-ID categorizes fair value measurements into a three-level hierarchy, with no recurring fair value liabilities and Level 3 liabilities valued using unobservable inputs - Nxt-ID uses a three-level hierarchy for fair value measurements, with Level 1 for quoted prices in active markets, Level 2 for observable inputs, and Level 3 for unobservable inputs[411](index=411&type=chunk) - As of December 31, 2018 and 2017, the company had no liabilities carried at fair value on a recurring basis[412](index=412&type=chunk) - Level 3 financial liabilities, including conversion feature liability and common stock purchase warrants, are valued using unobservable inputs due to the absence of current market prices, requiring significant judgment[414](index=414&type=chunk)[415](index=415&type=chunk) [NOTE 9 - DEBT REFINANCING](index=75&type=section&id=NOTE%209%20-%20DEBT%20REFINANCING) LogicMark secured a **$16 million** Senior Secured Term Loan in May 2018, maturing in 2023 at LIBOR + **9.5%**, refinancing previous debt and including excess cash flow deposit requirements - On May 24, 2018, LogicMark entered into a Senior Secured Credit Agreement for a **$16 million** Term Loan with Sagard Holdings Manager LP, maturing May 24, 2023, at LIBOR + **9.5%** interest[420](index=420&type=chunk) - The Term Loan refinanced and repaid the outstanding **$13.5 million** revolving loan facility with ExWorks Capital Fund I, L.P., resulting in a **$68,213** loss on extinguishment of debt[391](index=391&type=chunk) - The Credit Agreement requires LogicMark to deposit **50%** of its excess cash flow into a restricted bank account, which amounted to **$998,950** at December 31, 2018[420](index=420&type=chunk) - Nxt-ID issued two common stock purchase warrants to the lender, exercisable for **244,081** shares each at **$3.90** and **$4.88** per share, and recorded a debt discount of **$705,541**[423](index=423&type=chunk)[424](index=424&type=chunk) [NOTE 10 - STOCKHOLDERS' EQUITY](index=76&type=section&id=NOTE%2010%20-%20STOCKHOLDERS%27%20EQUITY) This note details changes in stockholders' equity, including preferred stock conversions, 2017 equity offerings, a September 2018 warrant amendment, and equity awards under the LTIP and 2017 SIP - All Series A and Series B Preferred Stock, including dividends, were converted into common stock by December 31, 2017[427](index=427&type=chunk)[428](index=428&type=chunk) - In 2017, Nxt-ID completed multiple equity offerings, including a registered direct offering of **2,170,000** common shares and pre-funded warrants in July, and another offering of **2,941,177** common shares in November, raising significant net proceeds[429](index=429&type=chunk)[431](index=431&type=chunk) - A September 2018 Warrant Amendment and Exercise Agreement reduced the exercise price of certain Old Warrants from **$2.00** to **$1.50** per share, resulting in a **$165,640** warrant modification expense[447](index=447&type=chunk)[449](index=449&type=chunk) - The LTIP and 2017 SIP limit aggregate common stock issuance to **10%** of outstanding shares on the first trading day of any fiscal year, with **975,886** shares available under LTIP and **2,522,807** under 2017 SIP as of December 31, 2018[452](index=452&type=chunk)[453](index=453&type=chunk) [NOTE 11 - INCOME TAXES](index=79&type=section&id=NOTE%2011%20-%20INCOME%20TAXES) Nxt-ID applies the asset and liability method for income taxes, maintaining a full valuation allowance against significant NOL carryovers due to realization uncertainties, despite a 2017 Tax Cuts and Jobs Act provisional charge - Nxt-ID recognized a provisional charge of **$4,295,052** in Q4 2017 due to the Tax Cuts and Jobs Act, which was offset by an equal reduction to the valuation allowance, resulting in no net tax impact[459](index=459&type=chunk) - A full valuation allowance is maintained against deferred tax assets due to significant uncertainties regarding future realization of taxable income[469](index=469&type=chunk) - The Fit Pay acquisition in 2017 was a change of control event under Section 382, but no limitation was computed for Nxt-ID's NOLs[462](index=462&type=chunk) Net Operating Loss (NOL) Carryovers and Tax Credits (as of Dec 31, 2018) | Item | Amount ($) | | :--------------------------------- | :----------- | | US federal NOL carryovers | 39,386,864 | | State NOL carryovers | 32,519,993 | | Tax credit carryforwards | 333,673 | [NOTE 12 - COMMITMENTS AND CONTINGENCIES](index=82&type=section&id=NOTE%2012%20-%20COMMITMENTS%20AND%20CONTINGENCIES) Nxt-ID has no material legal proceedings, with future lease obligations totaling **$173,062** through 2021 and **$15.00 million** of debt maturing in 2023 - Nxt-ID is not involved in any material legal actions or claims[471](index=471&type=chunk) Future Lease Obligations | Year | Amount ($) | | :--- | :--------- | | 2019 | 97,597 | | 2020 | 70,309 | | 2021 | 5,156 | | Total | 173,062 | Debt Maturity Schedule | Year | Amount ($) | | :--- | :----------- | | 2019 | 1,265,151 | | 2020 | 212,961 | | 2021 | 159,719 | | 2022 | - | | 2023 | 15,001,050 | | Total debt | 16,638,881 | [NOTE 13 - SUBSEQUENT EVENTS](index=83&type=section&id=NOTE%2013%20-%20SUBSEQUENT%20EVENTS) Subsequent events include common stock issuances for services, a January 2019 at-the-market offering generating **$1.32 million** in gross proceeds, and LogicMark's temporary withdrawals from restricted cash - In January 2019, Nxt-ID issued **63,889** shares of common stock for services (**$44,000** fair value) and **25,000** shares for services (**$31,250** fair value)[475](index=475&type=chunk)[477](index=477&type=chunk) - From January 15 to February 21, 2019, Nxt-ID sold **1,084,227** common shares through an at-the-market offering, generating **$1,322,484** in gross proceeds[203](index=203&type=chunk)[476](index=476&type=chunk) - LogicMark made temporary withdrawals of **$500,000** from its restricted cash balance in December 2018 and February 2019, incurring usage fees of **$75,000** and **$131,250**, respectively[420](index=420&type=chunk)[478](index=478&type=chunk)