Nxt-ID Inc. is getting closer to spinning off its Fit Pay Inc. unit, which markets the contactless-payment technology behind Garmin Pay and Swatch Pay and also this week began shipping a contactless device to allow consumers to spend their Bitcoin holdings at stores. The spin-off, first announced in September, will create a new company called PartX and will include Nxt-ID’s authentication technology as well as the contactless-payment assets.
Nxt-ID on Thursday filed a prospectus with the Securities and Exchange Commission for the distribution of shares in the new company. “We need to wait until the registration statement is cleared by the SEC,” Gino Pereira, Nxt-ID’s chief executive, said Thursday during an earnings call. “PartX is going to be a growing business for a number of years to come.”
A consumer uses a Garmin vivoactive to make a Garmin Pay transaction. (Image credit: Garmin)
Meanwhile, a complication in the form of a lender’s security interest in the assets, which has been holding up the maneuver, is apparently on its way to being resolved. “We previously announced that we had a term sheet for a refinancing of the company’s current term loan, which would allow us to proceed with the spin-off,” said Pereira. “We expect that transaction to close … within the next 2 weeks. So it’s moving forward.”
The spin-off will leave Melbourne, Fla.-based Nxt-ID with its health-care product line, LogicMark, which produces devices for emergency response.
Garmin Pay now includes 11 smart watches from Garmin International Inc. Some 280 issuing banks in 34 countries support the service, up from 60 banks in eight countries at the end of 2017, according to Nxt-ID. Launched in January, Swatch Pay embraces four watches from Swatch AG. “We’re strengthening our foothold” in wearables, said Michael Orlando, president of San Diego-based Fit Pay, during the earnings call. The wearables-payment service is supported by Fit Pay’s third-party token service, which went live in the fall of 2017.
For 2018, Nxt-ID reported revenue of $17.1 million, up from $16 million in 2017. The company says it has restated its numbers to reflect revenue on a continuing-operations basis. It posted operating income of just over $587,000, a swing positive from a loss of $2.15 million in 2017.