Nxt-ID (NASDAQ:NXTD) announced that the proposed spin-off of its payment and other assets into an independent traded company has been delayed and that the company has set a new record date for the transaction in the first quarter of 2019. As quoted in the press release: Shares of NXT-ID are currently trading with all the …
Nxt-ID (NASDAQ:NXTD) announced that the proposed spin-off of its payment and other assets into an independent traded company has been delayed and that the company has set a new record date for the transaction in the first quarter of 2019.
As quoted in the press release:
Shares of NXT-ID are currently trading with all the rights of shareholders of Nxt-ID common stock, including the right to receive dividends and distributions as determined by the Board of Nxt-ID.
“The reason for the delay in completing the transaction is that, after much effort, we were unable to come to terms with our primary lender regarding the release of their security interest in assets that we are proposing to spin off,” said Gino Pereira, Chief Executive Officer of Nxt-ID. “We are currently working with a number of other lenders to replace the existing long-term facility to remove the security interest. We will announce a new record date when we have better clarity on the timing to complete the transaction and to receive various regulatory approvals. We are now targeting to conclude the spin-off before the end of the first quarter of 2019.”
The Company previously announced that it intends to separate its payments, authentication and credential management business into an independent company and distribute those shares to Nxt-ID shareholders through the execution of a spin-off, which the Company believes will qualify as a tax-free distribution. Immediately following the transaction, Nxt-ID shareholders, who own shares of Nxt-ID on the new record date to be announced will own shares of both companies. The new company will include the assets acquired in the May 2017 business combination with Fit Pay, Inc. as well as the payment, authentication and credential management assets the Company developed previously by Nxt-ID. Following the spin-off, the Company has an investment commitment for up to $6 million to fund the operations of the new company. The new company intends to apply for listing on the NASDAQ.
The new company, PartX, will include the payment, authentication and credential management assets of Nxt-ID and Fit Pay, Inc, including Fit Pay®’s Token Requester Platform, which enables cardholders to securely add their payment credentials to devices that are integrated with FitPay’s token management solution. The Platform allows device manufacturers, merchants, banks and any other entity making digital transactions to offer their customers a safe and convenient payment experience. FitPay is one of the first successful commercializations of a token requestor service provider integrated with the major payment card networks.
PartX’s core capabilities also include the development of payment and authentication devices that leverage NFC (near field communication), cryptocurrency, and blockchain technology. It is currently developing digital payment and loyalty devices to be distributed through partners as well as payment devices that enable Bitcoin holders to make contactless payments at retail locations with value exchanged from their cryptocurrency. The assets of the new company will include a portfolio of payment, authentication and blockchain technology patents that have been filed by or issued to Nxt-ID and Fit Pay.