Tech News: SoundView
Research Issues Note on NXT-ID, Inc (NASDAQ: $NXTD); Acquisition Into Position
BOSTON - August 22, 2016 (Investorideas.com
Newswire) SoundView Technology Group (http://soundview.co) releases the following company note for NXT-ID, Inc. (NASDAQ:NXTD).
NXT-ID (NXTD $0.45)
Acquisition into position.
Kris Tuttle & Steve Waite: August 22, 2016
In July NXT-ID completed a major acquisition that
brings substantial revenues and profits ($11.1M sales and $2.1M EBITDA in 2015)
into the company. The deal also takes them from a payments-focused technology
provider into a more horizontal IoT technology provider to multiple markets.
NXT-ID announced an agreement to purchase LogicMark
on May 18, 2016 and set about to put together the considerable financing needed
to complete the deal. They put a package together and on July 26, 2016
completed the deal for consideration of $20M cash and $900K in stock. There are
also performance-driven payments of $6.5M if gross margin targets are hit in
future periods.
LogicMark has built a good business in personal
emergency response systems. These are devices which allow easy 2-way voice
communication between parties and/or 911 services. These devices are essential
for aged and disabled people living on their own.
The LogicMark business is expected to continue to
deliver profitable growth through the next few quarters and likely to
accelerate in 2017 thanks to expanded distribution with at least one major
retailer.
It's worth pointing out that two key members of the
NXT-ID advisory board that might be able to be helpful in expanding this
business:
Lawrence Flanagan is currently the president and
CEO of AARP Member Services. He was formerly the chief marketing officer of
MasterCard Worldwide. He's also formerly from Procter & Gamble.
Bill Fields is the former president and CEO of
Walmart retail stores. He was also the CEO of Blockbuster and recognized
industry-wide for his expertise in retail and distribution. He also played a
decisive role in all the different products that Walmart purchases from around
the world.
We'll be redoing our entire model in light of the
LogicMark deal. As a starting point we are expecting 2016 revenues of about
$13M and $4M of EBITDA. Until we factor in the increased number of shares and
debt associated with the deal we don't know exactly how our IV will shake out.
Potential partnerships with the likes of the AARP
and/or Walmart offer significant drivers of accelerated growth in 2017 and
beyond. One thing we can say for sure is that NXTD stock will be a very
different animal in September.
Other Items
There is still a fair amount of structural and
administrative work for the NXT-ID management team to complete in the next 30
days or so. By early September much or all of it will be resolved, including a
reverse stock split.
The existing business with the WorldVentures card
continues to develop and ramp. We expect to see revenues increasing at the end
of Q3 and then dramatically in Q4.
After Labor Day we will be publishing our revised
IV model and an updated full company report. Soon after that management plans
another investor update webinar hosted by NASDAQ. It will be announced but feel
free to sign-up for our email updates if you want to be sure not to miss
getting our full report and the invite to this webinar. You can sign up via
this link.
NXT-ID continues to work on other corporate
partnerships in the IoT space. We're looking for something more along the lines
of channel expansion and improved visibility in general-purpose IoT. Such
things can never be forecast with certainty but we wouldn't be shocked to see
one before the end of this year.
Read the full report:
ABOUT SOUNDVIEW RESEARCH
SoundView conducts independent research - mostly on
emerging technologies. We like thematic-driven companies where technology is
involved and use analysis to identify the most promising investment
opportunities.
Our business model is combination of subscription
fees along with some direct investments and advisory fees. We measure our
success by the quality of our analysis, accuracy of the conclusions and the size
and influence of our audience. We apply our own proven approach to valuation
that we call intrinsic value (IV) for informing investment decisions and
optimizing portfolio management.
Additional Disclosures
SoundView serves as a strategic advisor to NXT-ID
and provides advisory and other services to the company including strategy
advice, company positioning, investor communication methods and ongoing
technology and market research. SoundView employees do not have positions or
other vested interest in NXT-ID stock at the time this report was published.
(see back page for more general disclosures.)
Contact:
Kris Tuttle
SoundView Technology Group
kris@soundview.co
+1-617-828-6462
SoundView Technology Group
kris@soundview.co
+1-617-828-6462
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