Nxt-ID to spin off authentication technology and Fit Pay assets into new company

Nxt-ID has announced plans to spin off its payment, authentication, and credential management business into an independent company, which will plan for an initial public offering.

Shareholders with common shares of Nxt-ID on October 15, 2018, the company’s next divided date, will own shares of both companies once they are officially split, which is expected to be completed on November 15. Nxt-ID believes the spin-off will qualify as a tax-free distribution. The assets acquired in the May 2017 acquisition of Fit Pay will also be included in the new company, and Nxt-ID has committed to investing 6 million to fund its operation, as it applies to be listed on the NASDAQ exchange.

“We believe that this transaction will help to unlock the true value of both our payments and our healthcare businesses. Both businesses are experiencing an increased number of significant commercial opportunities, which require specialized focus to successfully execute them. These opportunities are sufficiently diverse such that the synergies of being under a single structure are outweighed by the need to focus on them separately. In addition, it provides our current and potentially new shareholders the opportunity to participate in a pure play investment in both strategies, while increasing the transparency for the market in general, in terms of understanding and tracking the performance of each business,” said Gino Pereira, Chief Executive Officer of Nxt-ID. “We believe the new structure will provide current and potential shareholders with two attractive investment options that may be more closely aligned with their respective investment objectives. It further demonstrates our commitment to creating long-term value for our shareholders.”

The new company will include the Fitpay Token Requester Platform, which allows any entity making digital transactions to provide a safe and convenient payment experience, and enables cardholders to add payment credentials to devices integrated with Fit Pay’s token management product. According to the announcement Fit Pay is one of the first commercialized token requester services integrated with major payment card networks.

The yet-to-be-named new company will also develop payment and authentication devices leveraging NFC, cryptocurrency, and blockchain technology. Current projects include digital payment and loyalty devices to be distributed through partners, and payment devices for contactless Bitcoin payments at retail locations.

Nxt-ID COO and Fit Pay President Michael Orlando will serve as CEO of the new company, while he and Pereira will serve on both companies’ boards.

Fit Pay is providing the payment capabilities for the biometric ring offered by startup Token, which was launched last year. More recently, the company has partnered with Garmin to add payment capabilities to its wearable products.

Article Topics

authentication  |  biometric payments  |  biometrics  |  fitness tracking  |  healthcare  |  NXT-ID