Nxt-ID Provides Shareholder Update on LogicMark and Proposed Spin-Off

Nxt-ID (NASDAQ:NXTD) released a shareholder update regarding its proposed spin-off strategy and its LogicMark Subsidiary.

In a release, the company crucially noted that the proposed spin-off of its payments, authentication and credential management business is likely to be pushed back towards the end of the year than its original estimation completion date of November 15.

As quoted in the press release:

Spin-off Strategy

“The fundamental reason we are pursuing this transaction is that we believe the value of both of our key lines of business is not reflected in the Company’s valuation. This transaction is designed to unlock that value by providing a direct pure play investment for shareholders in each strategy. While we have a process go through to complete the transaction, the goal is to have the inherent value of both our lines of business be more fully realized. The payments and authentication business is at a different stage of development compared to the healthcare business and needs some additional runway to achieve its full potential. We believe that this is best served as a stand-alone entity. In addition, it will provide current and future investors in an opportunity to invest in both businesses with a more clearly defined strategy and more transparency into the results and progress toward achieving that strategy.”

Transaction Update

“The next step in the process of completing the spin-off is the filing of an information statement, which will provide additional details about the transaction and the resulting two businesses. It appears likely that our original estimated completion date of November 15 will be pushed back towards the end of the year but we are working diligently through the process.”

LogicMark

Our LogicMark subsidiary has grown substantially since we acquired the company in July 2016. Unaudited revenue for the trailing twelve months ended September 30, 2018 was approximately $17.4 million and Non GAAP Operating income for the twelve months ended September 30, 2018, adjusted for depreciation, amortization and non-cash charges was approximately $7.8 million, almost twice as much as when the company was acquired in 2016. LogicMark’s core business is derived from sales to the Veteran’s Administration and wholesale distribution channels.

“We believe that LogicMark’s strong core business and expertise in patient monitoring provides an ideal base for expansion into this sector of healthcare,” said Gino Pereira, CEO of NXT-ID. “We are making significant progress toward building new distribution channels for the LogicMark family of products. As a result of a shift in the age structure, it is estimated that 19 percent of the population will be aged 65 and older by 2030. In addition, we are developing new wearable monitoring products to further extend our market beyond the senior population. These devices are designed for students, children and workers in industries where personal safety is important. Furthermore, we are expanding into telemedicine where we will offer monitoring services for the chronically ill, with the objective of reducing healthcare costs by early detection of adverse symptoms allowing for more timely medical intervention.”

“This spin-off transaction will free up cash flow that will allow LogicMark to fully pursue these new markets and opportunities.”

Click here for the full release.