0001213900-21-021782 | 10-K | XBRL Viewer

ORGANIZATION AND PRINCIPAL BUSINESS ACTIVITIES

NOTE 1 - ORGANIZATION AND PRINCIPAL BUSINESS ACTIVITIES

Nxt-ID, Inc. (“Nxt-ID” or the “Company”) was incorporated in the State of Delaware on February 8, 2012. The Company is a security technology company and operates its business in one segment – hardware and software security systems and applications. The Company is engaged in the development of proprietary products and solutions that serve multiple end markets, including the security, healthcare, financial technology and the Internet of Things (“IoT”) markets. The Company evaluates the performance of its business on, among other things, profit and loss from operations. With extensive experience in access control, biometric and behavior-metric identity verification, security and privacy, encryption and data protection, payments, miniaturization, and sensor technologies, the Company develops and markets solutions for payment, IoT and healthcare applications.

The Company’s wholly-owned subsidiary, LogicMark, manufactures and distributes non-monitored and monitored personal emergency response systems sold through the United States Department of Veterans Affairs, healthcare durable medical equipment dealers and distributors and monitored security dealers and distributors.

Between 2017 and 2019, the Company also operated a payment credential management business through its Fit-Pay subsidiary. With the approval of the Company’s board of directors, and upon similar terms and conditions to those set forth in that loan agreement, the Company entered into a non-binding letter of intent for a potential sale of its Fit Pay subsidiary, excluding certain assets on August 6, 2019. In connection with the letter of intent, the purchaser advanced $500,000 of non-interest bearing working capital for Fit Pay. On September 9, 2019, the Company completed the sale of its Fit Pay subsidiary to Garmin International, Inc. for $3.32 million in cash (See Note 4).

Liquidity and Management Plans

12 Months Ended

Dec. 31, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

LIQUIDITY AND MANAGEMENT PLANS

NOTE 2 - LIQUIDITY AND MANAGEMENT PLANS

The Company generated an operating loss of $586,078 and a net loss of $2,864,984 for the year ended December 31, 2020. As of December 31, 2020, the Company had cash and stockholders’ equity of $4,387,416 and $9,159,209, respectively. At December 31, 2020, the Company had a working capital deficiency of $578,797. During the year ended December 31, 2020, the Company received net proceeds of $5,144,387 from the issuance of common stock and warrants, the issuance of Series D preferred stock and warrants and the exercise of common stock purchase warrants.

Given the Company’s cash position at December 31, 2020 and its projected cash flow from operations, the Company believes that it will have sufficient capital to sustain operations for a period of one year following the date of this filing. The Company may also raise funds through equity or debt offerings to accelerate the execution of its long-term strategic plan to develop and commercialize its core products and to fulfill its product development commitments.

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2020

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

USE OF ESTIMATES IN THE FINANCIAL STATEMENTS

The preparation of consolidated financial statements in conformity with generally accepted accounting principles in the United States (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The Company’s management evaluates these significant estimates and assumptions, including those related to the fair value of acquired assets and liabilities, stock based compensation, income taxes, allowance for doubtful accounts, long-lived assets, and inventories, and other matters that affect the consolidated financial statements and disclosures. Actual results could differ from those estimates.

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of Nxt-ID and its wholly-owned subsidiaries. Intercompany balances and transactions have been eliminated in consolidation.

CASH

The Company considers all highly liquid securities with an original maturity date of three months or less when purchased to be cash equivalents. Due to their short-term nature, cash equivalents are carried at cost, which approximates fair value. At December 31, 2020 and 2019, the Company had no cash equivalents.

RESTRICTED CASH

At December 31, 2020 and 2019, the Company had restricted cash of $150,130 and $150,130, respectively. Restricted cash includes amounts held back by the Company’s third party credit card processor for potential customer refunds, claims and disputes. Cash and restricted cash, as presented on the consolidated statements of cash flows, consists of $4,387,416 and $150,130 as of December 31, 2020, respectively, and $1,587,250 and $150,130 as of December 31, 2019.

CONCENTRATIONS OF CREDIT RISK

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash. The Company maintains its cash balances in large well-established financial institutions located in the United States. At times, the Company’s cash balances may be uninsured or in deposit accounts that exceed the Federal Deposit Insurance Corporation (“FDIC”) insurance limits.

REVENUE RECOGNITION

The Company’s revenues consist of product sales to either end customers or to distributors. The Company’s revenues are derived from contracts with customers, which are in most cases customer purchase orders. For each contract, the promise to transfer the control of the products, each of which is individually distinct, is considered to be the identified performance obligation. As part of the consideration promised in each contract, the Company evaluates the customer’s credit risk. Our contracts do not have any financing components, as payment terms are generally due net 30 days after delivery. The Company’s products are almost always sold at fixed prices. In determining the transaction price, we evaluate whether the price is subject to any refunds, due to product returns or adjustments due to volume discounts, rebates or price concessions to determine the net consideration we expect to be entitled to. The Company’s sales are recognized at a point-in-time under the core principle of recognizing revenue when control transfers to the customer, which generally occurs when the Company ships or delivers the product from its fulfillment center to our customers, when our customer accepts and has legal title of the goods, and the Company has a present right to payment for such goods. Based on the respective contract terms, most of our contracts revenues are recognized either (i) upon shipment based on free on board (“FOB”) shipping point, or (ii) when the product arrives at its destination. For the years ended December 31, 2020 and 2019, none of our sales were recognized over time.

Sales to Distributors and Resellers

Sales to certain distributors and resellers are made under terms allowing limited rights of return of the Company’s products held in their inventory or upon sale to their end customers. The Company maintains a reserve for unprocessed and estimated future price adjustments claims and returns as a refund liability. The reserve is recorded as a reduction to revenue in the same period that the related revenue is recorded and is calculated based on an analysis of historical claims and returns over a period of time to appropriately account for current pricing and business trends. Similarly, sales returns and allowances are recorded based on historical return rates, as a reduction to revenue with a corresponding reduction to cost of sales for the estimated cost of inventory that is expected to be returned. These reserves were not material upon the adoption of Topic 606 on January 1, 2018, nor were they material in the consolidated balance sheet at December 31, 2020 and 2019.

SHIPPING AND HANDLING

Amounts billed to customers for shipping and handling are included in revenues. The related freight charges incurred by the Company are included in selling and marketing expenses and were $524,481 and $658,889, respectively, for the years ended December 31, 2020 and 2019.

Accounts Receivable

For the years ended December 31, 2020 and 2019, the Company’s revenues primarily included shipments of the LogicMark products. The terms and conditions of these sales provide certain customers with trade credit terms. In addition, these sales were made to the retailers with no rights of return and are subject to the normal warranties offered to the ultimate consumer for product defects.

Accounts receivable is stated at net realizable value. The Company regularly reviews accounts receivable balances and adjusts the receivable reserves as necessary whenever events or circumstances indicate the carrying value may not be recoverable. At December 31, 2020 and 2019, the Company had an allowance for doubtful accounts of $126,733 and $126,733, respectively.

INVENTORY

The Company measures inventory at the lower of cost or net realizable value, defined as estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation.

The Company performs regular reviews of inventory quantities on hand and evaluates the realizable value of its inventories. The Company adjusts the carrying value of the inventory as necessary with estimated valuation reserves for excess, obsolete, and slow-moving inventory by comparing the individual inventory parts to forecasted product demand or production requirements. The inventory is valued at the lower of cost or net realizable value with cost determined using the first-in, first-out method. As of December 31, 2020, inventory was comprised of $199,523 in raw materials and $567,828 in finished goods on hand. As of December 31, 2019 inventory was comprised of $167,357 in raw materials and $1,135,922 in finished goods on hand. The Company is required to prepay for certain inventory with certain vendors until credit terms can be established. As of December 31, 2020 and 2019, $332,475 and $201,496, respectively, of prepayments made for inventory is included in prepaid expenses and other current assets on the consolidated balance sheet.

LONG-LIVED ASSETS

Long-lived assets, such as property and equipment, and other intangibles are evaluated for impairment whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable. When indicators exist, the Company tests for the impairment of the definite-lived assets based on the undiscounted future cash flow the assets are expected to generate over their remaining useful lives, compared to the carrying value of the assets. If the carrying amount of the assets is determined not to be recoverable, a write-down to fair value is recorded. Management estimates future cash flows using assumptions about expected future operating performance. Management’s estimates of future cash flows may differ from actual cash flow due to, among other things, technological changes, economic conditions or changes to the Company’s business operations.

PROPERTY AND EQUIPMENT

Property and equipment consisting of furniture, fixtures and tooling is stated at cost. The costs of additions and improvements are generally capitalized and expenditures for repairs and maintenance are expensed in the period incurred. When items of property and equipment are sold or retired, the related costs and accumulated depreciation are removed from the accounts and any gain or loss is included in income. Depreciation of property and equipment is provided utilizing the straight-line method over the estimated useful life of the respective asset as follows:

Equipment	5 years
Furniture and fixtures	3 to 5 years
Tooling and molds	2 to 3 years

GOODWILL

Authoritative accounting guidance allows the Company to first assess qualitative factors to determine whether it is necessary to perform the more detailed two-step quantitative goodwill impairment test. The Company performs the quantitative test if its qualitative assessment determined it is more likely than not that a reporting unit’s fair value is less than its carrying amount. The Company may elect to bypass the qualitative assessment and proceed directly to the quantitative test for any reporting units or assets. The quantitative goodwill impairment test, if necessary, is a two-step process. The first step is to identify the existence of a potential impairment by comparing the fair value of a reporting unit (the estimated fair value of a reporting unit is calculated using a discounted cash flow model) with its carrying amount, including goodwill. If the fair value of a reporting unit exceeds its carrying amount, the reporting unit’s goodwill is considered not to be impaired and performance of the second step of the quantitative goodwill impairment test is unnecessary. However, if the carrying amount of a reporting unit exceeds its fair value, the second step of the quantitative goodwill impairment test is performed to measure the amount of impairment loss to be recorded, if any. The second step of the quantitative goodwill impairment test compares the implied fair value of the reporting unit’s goodwill with the carrying amount of that goodwill. If the carrying amount of the reporting unit’s goodwill exceeds its implied fair value, an impairment loss is recognized in an amount equal to that excess. The implied fair value of goodwill is determined using the same approach as employed when determining the amount of goodwill that would be recognized in a business combination. That is, the fair value of the reporting unit is allocated to all of its assets and liabilities as if the reporting unit had been acquired in a business combination and the fair value was the purchase price paid to acquire the reporting unit.

As part of the annual evaluation of the LogicMark related goodwill, the Company utilized the option to first assess qualitative factors, which include but are not limited to, economic, market and industry conditions, as well as the financial performance of LogicMark. In accordance with applicable guidance, an entity is not required to calculate the fair value of a reporting unit if, after assessing these qualitative factors, the Company determines that it is more likely than not that its reporting unit’s fair value is greater than its carrying amount. During the year ended December 31, 2020, the Company determined that it was more likely than not that the fair value of LogicMark exceeded its respective carrying amount and therefore, a quantitative assessment was not required.

The goodwill associated with the Company’s acquisition of Fit Pay was $9,119,709 and was included as part of the Company’s discontinued operations. On September 9, 2019, the Company sold its discontinued operations and the goodwill associated with Fit Pay was written off and is included as part of the loss on sale of discontinued operations (See Note 4).

OTHER INTANGIBLE ASSETS

The Company’s intangible assets are related to the acquisition of LogicMark and are included in other intangible assets in the Company’s consolidated balance sheet at December 31, 2020 and 2019.

At December 31, 2020, the other intangible assets relating to the acquisition of LogicMark are comprised of patents of $2,445,709; trademarks of $978,494; and customer relationships of $1,814,259. At December 31, 2019, the other intangible assets relating to the acquisition of LogicMark are comprised of patents of $2,818,434; trademarks of $1,041,370; and customer relationships of $2,140,473. The Company will continue amortizing these intangible assets using the straight line method over their estimated useful lives which for the patents, trademarks and customer relationships are 11 years; 20 years; and 10 years, respectively. During the years ended December 31, 2020 and 2019, the Company had amortization expense of $761,815 and $761,815, respectively, related to the LogicMark intangible assets.

Amortization expense estimated for each of the next five fiscal years, 2021 through 2025, is expected to be approximately $762,000 per year.

CONVERTIBLE INSTRUMENTS

The Company applies the accounting standards for derivatives and hedging and for distinguishing liabilities from equity when accounting for hybrid contracts that feature conversion options. The accounting standards require companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments according to certain criteria. The criteria include circumstances in which (i) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (ii) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (iii) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. The derivative is subsequently marked to market at each reporting date based on current fair value, with the changes in fair value reported in the results of operations.

Conversion options that contain variable settlement features such as provisions to adjust the conversion price upon subsequent issuances of equity or equity linked securities at exercise prices more favorable than that featured in the hybrid contract generally result in their bifurcation from the host instrument.

The Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. The debt discounts under these arrangements are amortized over the earlier of (i) the term of the related debt using the straight line method which approximates the interest rate method or (ii) conversion of the debt. The amortization of debt discount is included as a component of interest expense included in other income and expenses in the accompanying consolidated statements of operations. See Note 7.

DERIVATIVE FINANCIAL INSTRUMENTS

The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risks. The Company evaluates all of its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the consolidated statements of operations. For stock-based derivative financial instruments, the Company uses the Black-Scholes or binomial option valuation model to value the derivative instruments at inception and on subsequent valuation dates. The Company accounts for conversion features that are embedded within the Company’s convertible notes payable that do not have fixed settlement provisions as a separate derivative instrument. In addition, warrants issued by the Company that do not have fixed settlement provisions are also treated as derivative instruments. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date.

INCOME TAXES

The Company uses the asset and liability method of accounting for income taxes. Income tax expense is recognized for the amount of: (i) taxes payable or refundable for the current year and (ii) deferred tax consequences of temporary differences resulting from matters that have been recognized in an entity’s financial statements or tax returns. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is provided to reduce the deferred tax assets reported if based on the weight of the available positive and negative evidence, it is more likely than not some portion or all of the deferred tax assets will not be realized.

ASC Topic 740-10-30 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740-10-40 provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. The Company will classify as income tax expense any interest and penalties. The Company has no material uncertain tax positions for any of the reporting periods presented. Generally, the tax authorities may examine tax returns for three years from the date of filing. The Company has filed all of its tax returns for all prior periods through December 31, 2019.

STOCK-BASED COMPENSATION

The Company accounts for share-based awards exchanged for employee services at the estimated grant date fair value of the award. The Company accounts for equity instruments issued to non-employees at their fair value on the measurement date. The measurement of stock-based compensation is subject to periodic adjustment as the underlying equity instrument vests or becomes non-forfeitable. Non-employee stock-based compensation charges are amortized over the vesting period or as earned. Stock-based compensation is recorded in the same component of operating expenses as if it were paid in cash. The Company generally issues new shares of common stock to satisfy conversion and warrant exercises.

NET LOSS PER SHARE

Basic loss per share was computed using the weighted average number of common shares outstanding. Diluted loss per share includes the effect of diluted common stock equivalents. Potentially dilutive securities from the exercise of stock options to purchase 335,272 shares of common stock and warrants to purchase 15,690,077 shares of common stock as of December 31, 2020 were excluded from the computation of diluted net loss per share because the effect of their inclusion would have been anti-dilutive. As of December 31, 2019, potentially dilutive securities from the exercise of warrants to purchase 6,973,221 shares of common stock were excluded from the computation of diluted net loss per share because the effect of their inclusion would have been anti-dilutive.

RESEARCH AND DEVELOPMENT

Research and development costs consist of expenditures incurred during the course of planned research and investigation aimed at the discovery of new knowledge, which will be useful in developing new products or processes. The Company expenses all research and development costs as incurred.

RECENT ACCOUNTING PRONOUNCEMENTS

Recent accounting standards that have been issued or proposed by FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the Company's consolidated financial statements upon adoption.

Discontinued Operations

12 Months Ended

Dec. 31, 2020

Discontinued Operations and Disposal Groups [Abstract]

DISCONTINUED OPERATIONS

Note 4 - DISCONTINUED OPERATIONS

On September 9, 2019 the Company entered into a stock purchase agreement (the “Purchase Agreement”), by and between Garmin International, Inc., a Kansas corporation (“Garmin”), the Company and Fit Pay, a Delaware corporation and wholly owned subsidiary of the Company, pursuant to which the Company sold and transferred all of the issued and outstanding shares of capital stock of Fit Pay, which consisted of 1,000 shares of common stock, par value $0.0001 per share, of Fit Pay (the “Shares”), to Garmin (the “Sale”). As previously disclosed, the Company conducted its payments business through Fit Pay, and Fit Pay provided technology, platform and tokenization services to Garmin to power Garmin Pay™, a contactless payment feature included on smartwatches manufactured by Garmin. In consideration for the Shares, Garmin paid the Company an aggregate amount of approximately $3.32 million in cash (the “Purchase Price”). A portion of the proceeds received by the Company pursuant to the Purchase Agreement were used to pay in full a promissory note issued by the Company to one of its directors, as well as to pay down the promissory note that had been issued pursuant to the Credit Agreement (the “Promissory Note”). Garmin previously paid the Company $500,000 of the Purchase Price as an advance on August 7, 2019, and paid the remainder of the Purchase Price at the closing of the Sale. The Company recorded a loss on the sale of its discontinued operations of $5,988,767. The loss on sale of discontinued operations for the year ended December 31, 2019 is comprised of the following:

Total sales price	$	3,323,198
Net book value of discontinued operations⁽¹⁾		126,062
Write-off of goodwill related to acquisition of Fit Pay		(9,119,709	)
Write-off of unamortized other intangibles related to acquisition of Fit Pay		(2,674,607	)
Write-off of remaining contingent consideration		2,611,169
Transaction fees incurred		(254,880	)
Loss on sale of discontinued operations	$	(5,988,767	)

(1)	The net book value of discontinued operations at September 8, 2019 included cash of $113,148.

Also in connection with the Purchase Agreement, the Company entered into a Manufacturing and Distribution Agreement, dated as of September 9, 2019 (the “Manufacturing Agreement”), with Garmin Switzerland GmbH, a Swiss corporation (“Garmin Switzerland”), pursuant to which Garmin Switzerland agreed to grant the Company a non-exclusive right to manufacture, distribute and sell Garmin Switzerland’s proprietary smart wallet (the “Product”) to certain customers in the U.S. designated by Garmin Switzerland on a royalty-free basis (the “License”), unless otherwise agreed to by the parties thereto. The Company was also granted a right to sub-license the Product pursuant to the Manufacturing Agreement. The Company has been granted the License for an initial term of three years, which term automatically renews for additional one-year periods unless either party provides the other with at least ninety days written notice of its election not to renew such term. The Manufacturing Agreement may be terminated by either party if (i) a party breaches any material provision of such agreement, which breach is not cured within thirty calendar days after receipt of written notice of such breach, (ii) upon written notice, a party petitions for reorganization or to be adjudicated to be bankrupt, or if a receiver is appointed for substantially all of either party’s business, or a party makes a general assignment for the benefit of such party’s creditors, or if any involuntary bankruptcy petition is brought against such party and has not been discharged within sixty calendar days of the date the petition is brought, or (iii) in the event of a change of control (as defined in the Manufacturing Agreement).

The following table represents the financial results of the discontinued operations for the years ended December 31, 2020 and 2019:

	For the Years Ended
	December 31,
	2019

Net sales	$	625,771
Cost of sales		194,856
Gross profit (loss)		430,915
Operating expenses		3,859,222
Interest expense		3,963
Income tax expense (benefit)		-
Loss from discontinued operations	$	(3,432,270	)

Accrued Expenses

12 Months Ended

Dec. 31, 2020

Payables and Accruals [Abstract]

ACCRUED EXPENSES

NOTE 5 - ACCRUED EXPENSES

Accrued expenses consist of the following:

	December 31,
	2020		2019
Salaries, payroll taxes and vacation	$	130,093	$	92,334
Consulting fees		-		53,563
Merchant bank fees		19,754		26,589
State income taxes		38,672		23,800
Professional fees		226,794		119,016
Management incentives		500,419		758,907
Interest expense		128,187		148,980
Lease liability		54,476		68,576
Dividends – Series C Preferred Stock		25,000		22,182
Other		191,867		178,164
Totals	$	1,315,262	$	1,492,111

Fair Value Measurements

12 Months Ended

Dec. 31, 2020

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

NOTE 6 - FAIR VALUE MEASUREMENTS

Fair value of financial instruments is defined as an exit price, which is the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date. The degree of judgment utilized in measuring the fair value of assets and liabilities generally correlates to the level of pricing observability. Financial assets and liabilities with readily available, actively quoted prices or for which fair value can be measured from actively quoted prices in active markets generally have more pricing observability and require less judgment in measuring fair value. Conversely, financial assets and liabilities that are rarely traded or not quoted have less price observability and are generally measured at fair value using valuation models that require more judgment. These valuation techniques involve some level of management estimation and judgment, the degree of which is dependent on the price transparency of the asset, liability or market and the nature of the asset or liability. The Company has categorized its financial assets and liabilities measured at fair value into a three-level hierarchy.

Valuation Hierarchy

ASC 820, “Fair Value Measurements and Disclosures,” establishes a valuation hierarchy for disclosure of the inputs to valuation used to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument. Level 3 inputs are unobservable inputs based on the Company’s own assumptions used to measure assets and liabilities at fair value. A financial asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement.

The Company did not have any liabilities carried at fair value measured on a recurring basis as of December 31, 2020 and 2019.

The carrying amounts of cash and accounts payable approximate their fair value due to their short maturities. The Company’s other financial instruments include its convertible notes payable obligations. The carrying value of these instruments approximate fair value, as they bear terms and conditions comparable to market, for obligations with similar terms and maturities. The Company measures the fair value of financial assets and liabilities based on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value.

Level 3 Valuation Techniques

Level 3 financial liabilities consist of the conversion feature liability and common stock purchase warrants for which there are no current markets for these securities such that the determination of fair value requires significant judgment or estimation. Changes in fair value measurements categorized within Level 3 of the fair value hierarchy are analyzed each period based on changes in estimates or assumptions and recorded as appropriate. A significant decrease in the volatility or a significant decrease in the Company’s stock price, in isolation, would result in a significantly lower fair value measurement.

During the years ended December 31, 2020 and 2019, there were no transfers in or out of Level 3 from other levels in the fair value hierarchy.

Stockholders' Equity Note [Abstract]

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Debt Refinancing

12 Months Ended

Dec. 31, 2020

Debt Disclosure [Abstract]

DEBT REFINANCING

NOTE 7 - DEBT REFINANCING

On May 24, 2018, LogicMark, a wholly owned subsidiary of Nxt-ID, entered into a Senior Secured Credit Agreement (the “Credit Agreement”) with the lenders thereto and Sagard Holdings Manager LP, as administrative agent and collateral agent for the lenders party to the Credit Agreement (collectively, the “Lender”), whereby the Lender extended a term loan (the “Term Loan”) to LogicMark in the principal amount of $16,000,000. The original maturity date of the Term Loan was May 24, 2023. The Term Loan Facility with Sagard Holdings Manager LP was repaid on May 3, 2019 with Term Loan proceeds received from CrowdOut Capital LLC (see below). The outstanding principal amount of the Term Loan bears interest at a rate of LIBOR, adjusted monthly, plus 9.5% per annum. The Company incurred $1,253,970 in deferred debt issue costs related to the Term Loan. During the year ended December 31, 2019, the Company amortized $86,969 of the deferred debt issue costs which is included in interest expense in the consolidated statement of operations.

On May 24, 2018, the Company recorded a debt discount of $705,541. The debt discount was attributable to the aggregate fair value on the issuance date of both Sagard Warrants. The debt discount was amortized using the effective interest method over the five-year term of the Term Loan. During the year ended December 31, 2019 the Company recorded $48,932 of debt discount amortization related to the Sagard Warrants. The debt discount amortization is included as part of interest expense in the consolidated statements of operations.

On May 3, 2019, LogicMark completed the closing of a $16,500,000 senior secured term loan with the lenders thereto and CrowdOut Capital LLC, as administrative agent. The Company used the proceeds from the term loan to repay LogicMark’s existing term loan facility with Sagard Holdings Manager LP and to pay other costs related to the refinancing. The maturity date of the term loan with CrowdOut Capital LLC is May 3, 2022 and required the Company to make minimum principal payments over the three-year term amortized over 96 months. On February 8, 2021, the Company and CrowdOut Capital LLC agreed to an extension of the maturity date of the Term Loan to May 22, 2023. See Note 11. Since the inception of the refinancing, the Company has made scheduled principal repayments and term loan prepayments totaling $3,415,625 through December 31, 2020. In addition, the Company prepaid an additional $1,988,498 of the term loan with CrowdOut Capital LLC in September 2019 with a portion of the proceeds received from the sale of discontinued operations. The outstanding principal amount of the Term Loan bears interest at a rate of LIBOR, adjusted monthly, plus 11.0% per annum (approximately 13.0% as of December 31, 2020). The Company incurred $412,500 in original issue discount for closing related fees charged by the Lender. During the years ended December 31, 2020 and December 31, 2019, the Company amortized $106,215 and $168,430, respectively of the original issue discount which is included in interest expense in the consolidated statement of operations. At December 31, 2020 the unamortized balance of the original issue discount was $137,855. The Company also incurred $1,831,989 in deferred debt issue costs related to the Term Loan. The deferred debt issue costs include an exit fee of $1,072,500 which is equivalent to 6.5% of the term loan amount borrowed from CrowdOut Capital. The exit fee is due to CrowdOut Capital upon the earlier of final repayment of the term loan facility or the maturity date. The liability for the exit fee is included as part of other long-term liabilities in the Company’s consolidated balance sheet. During the years ended December 31, 2020 and December 31, 2019, the Company amortized $549,446 and $569,424, respectively of the deferred debt issue costs which is included in interest expense in the consolidated statements of operations. At December 31, 2020 the unamortized balance of deferred debt issue costs was $713,119.

Debt Maturity

The maturity of the Company’s term debt is as follows:

2021	$	2,062,500
2022		9,033,377
Total term debt	$	11,095,877

In connection with the Term Loan refinancing on May 3, 2019, the Company incurred a loss on extinguishment of debt of $2,343,879 which included the write off of unamortized deferred debt issuance costs and note discount of $1,015,311 and $571,260, respectively resulting from the May 24, 2018 Term Loan facility with Sagard Holdings Manager LP and a yield maintenance premium, a prepayment penalty and legal fees due to Sagard Holdings Manager LP. totaling $757,308.

On November 16, 2020, the Company and CrowdOut Capital LLC, as administrative agent, entered into the first amendment to the senior secured term loan. In connection with the first amendment, CrowdOut Capital LLC, as administrative agent, agreed to modify the financial ratios contained in the senior secured term retroactively and prospectively. Based on the senior secured term loan, as amended, the Company was in compliance with such covenants at December 31, 2020.

Paycheck Protection Program

On each of May 6 and May 8, 2020, Nxt-ID Inc. and LogicMark, LLC, a wholly owned subsidiary of the Company (the “Borrowers”), respectively, received loans (the “Loans”) from Bank of America, NA in the aggregate amount of $346,390, pursuant to the Paycheck Protection Program (the “PPP”) under Division A, Title I of the Coronavirus Aid, Relief, and Economic Security Act, which was enacted on March 27, 2020.

The Loans, which are in the form of PPP promissory notes and agreements, dated May 1, 2020 (the “Note Agreements”), mature on May 6 and May 8, 2022, respectively, and bear interest at a rate of 1.00% fixed per annum, payable monthly commencing on November 6 and November 8, 2020, respectively. The Loans may be prepaid by the Borrowers at any time prior to maturity with no prepayment penalties. The Borrowers used the proceeds from the Loans for payroll, payroll taxes, and group healthcare benefits. Under the terms of the Note Agreements, certain amounts of the Loans may be forgiven if they are used for qualifying expenses, as described in the Note Agreements.

The Company has applied for forgiveness of the Loans and as such has treated the Loans as other short-term debt on the Company’s consolidated balance sheet. See Note 11 for update on Loans.

Stockholders' Equity

12 Months Ended

Dec. 31, 2020

STOCKHOLDERS' EQUITY

NOTE 8 - STOCKHOLDERS’ EQUITY

December 2020 Offerings

On December 18, 2020, the Company closed a registered direct offering pursuant to which the Company issued (i) an aggregate of 1,515,151 shares of Series D preferred stock, convertible into an aggregate of up to 3,030,304 shares of common stock, (ii) common stock purchase warrants to purchase up to an aggregate of 1,000,000 shares of common stock at an exercise price of $0.49 per share, subject to customary adjustments thereunder, which were exercisable immediately upon issuance and have a term of five years, and (iii) common stock purchase warrants to purchase up to an aggregate of 5,060,606 shares of common stock at an exercise price of $0.49 per share with a term of five and one-half (5.5) years first exercisable six (6) months after issuance, subject to customary adjustments thereunder, for gross proceeds of $2,000,000, before deducting any offering expenses. The Company will use the net proceeds from this offering for working capital, new product initiatives and other general corporate purposes. On December 21, 2020, 1,515,151 shares of Series D preferred stock were converted into 3,030,304 shares of common stock. During the year ended December 31, 2020, the Company recorded a deemed dividend of $758,922 from the beneficial conversion feature associated with the issuance of the Series D convertible preferred stock and warrants.

July 2020 Offerings

On July 14, 2020, the Company closed a registered direct offering of (i) an aggregate of 3,778,513 shares of the Company’s common stock, par value $0.0001 per share; (ii) pre-funded warrants to purchase up to an aggregate of 734,965 shares of Common Stock at an exercise price of $0.01 per share, subject to customary adjustments thereunder; (iii) registered warrants, with a term of five (5) years exercisable immediately upon issuance, to purchase an aggregate of up to 1,579,718 shares of Common Stock (at an exercise price of $0.50 per share, subject to customary adjustments thereunder; and (iv) unregistered warrants, with a term of five and one-half (5.5) years first exercisable six (6) months after issuance, to purchase an aggregate of up to 3,750,000 shares of Common Stock at an exercise price of $0.65 per share, subject to customary adjustments thereunder, for gross proceeds of $1,864,528, before deducting any offering expenses. The Company will continue to use the net proceeds from this Offering for working capital, new product initiatives and other general corporate purposes.

On July 28, 2020, the Company received proceeds of $7,350 in connection with the exercise of 734,965 pre-funded warrants to purchase common stock at an exercise price of $0.01.

January 2019 At-the-Market Offering

On January 8, 2019, the Company entered into a sales agreement with A.G.P./Alliance Global Partners (“A.G.P.”) for an at-the-market offering, pursuant to which the Company could sell, at its option, shares of its common stock, par value $0.0001 per share, having an aggregate offering price of up to $15 million to or through A.G.P., as sales agent. The Company was obligated to pay A.G.P. commissions for its services in acting as the Company’s sales agent in the sale of its common stock pursuant to the sales agreement. A.G.P. was entitled to compensation at a fixed commission rate of 3.0% of the gross proceeds from the sale of the Company’s common stock on the Company’s behalf pursuant to the sales agreement. The Company also agreed to reimburse A.G.P. for its reasonable out-of-pocket expenses, including the fees and disbursements of counsel to A.G.P., incurred in connection with the offering, in an amount not to exceed $35,000. During the year ended December 31, 2019, the Company received $1,299,042 in net proceeds from the sale of 1,113,827 shares of its common stock under the sales agreement with A.G.P. On April 2, 2019, the Company entered into a Securities Purchase agreement with an investor in connection with a registered direct public offering of 2,469,136 shares of the Company’s common stock. The shares of common stock were offered at a price of $0.81 per share and the Company received $1,915,000 in net proceeds from the sale. The Company also issued to the investor for no additional consideration common stock purchase warrants to purchase 2,469,136 shares of common stock. The warrants are exercisable upon issuance at an exercise price of $1.05 and expire on the fifth (5^th) anniversary of the initial exercise date. The sales agreement with A.G.P. was terminated on October 10, 2019.

2013 Long-Term Stock Incentive Plan

On January 4, 2013, a majority of the Company’s stockholders approved by written consent the Company’s 2013 Long-Term Stock Incentive Plan (“LTIP”). The maximum aggregate number of shares of common stock that may be issued under the LTIP, including stock awards, stock issued to directors for serving on the Company’s board of directors, and stock appreciation rights, is limited to 10% of the shares of common stock outstanding on the first business or trading day of any fiscal year, which is 592,223 shares of common stock at January 1, 2021.

During the year ended December 31, 2020, the Company issued an aggregate of 335,272 stock options to purchase shares of common stock under the LTIP to four (4) non-employee directors for serving on the Company’s board. The weighted average exercise price of these stock options is approximately $0.48 and the stock options were fully vested at the issuance date. The aggregate fair value of the shares issued to the directors was $160,000.

2017 Stock Incentive Plan

On August 24, 2017, a majority of the Company’s stockholders approved at the 2017 Annual Stockholders’ Meeting the 2017 Stock Incentive Plan (“2017 SIP”). The aggregate maximum number of shares of common stock (including shares underlying options) that may be issued under the 2017 SIP pursuant to awards of restricted shares or options will be limited to 10% of the outstanding shares of common stock, which calculation shall be made on the first (1^st) business day of each new fiscal year; provided that for fiscal year 2017, 1,500,000 shares of common stock may be delivered to participants under the 2017 SIP. Thereafter, the 10% provision shall govern the 2017 SIP. The number of shares of common stock that are the subject of awards under the 2017 SIP which are forfeited or terminated, are settled in cash in lieu of shares of common stock or are settled in a manner such that all or some of such shares covered by an award are not issued to a participant or are exchanged for awards that do not involve shares of common stock will again immediately become available to be issued pursuant to awards granted under the 2017 SIP. If shares of common stock are withheld from payment of an award to satisfy tax obligations with respect to the award, those shares of common stock will be treated as shares that have been issued under the 2017 SIP and will not again be available for issuance under the 2017 SIP.

In addition, during the year ended December 31, 2020, the Company issued 447,620 shares of common stock with an aggregate fair value of $200,794 to certain employees related to the Company’s 2017, 2018 and 2019 management incentive plan.

During the years ended December 31, 2020 and 2019, the Company accrued $200,000 and $200,000, respectively of management and employee bonus expense.

During the year ended December 31, 2019, the Company issued 372,078 shares of common stock with a fair value of $254,490 to non-employees for services rendered.

In addition, during the year ended December 31, 2019, the Company issued 289,216 shares of common stock with an aggregate fair value of $216,267 to certain non-executive employees related to the Company’s 2017 and 2018 management incentive plan.

Series C Preferred Stock

In May 2017, the Company authorized a new Series C Preferred Stock. The terms of the Series C Preferred Stock are as follows:

Dividends on Series C Preferred Stock

Holders of Series C Preferred Stock are entitled to receive from and after the first date of issuance of the Series C Preferred Stock, cumulative dividends at a rate of 5% per annum on a compounded basis, which dividend amount shall be guaranteed. Accrued and unpaid dividends are payable in cash. For the years ended December 31, 2020 and 2019, the Company recorded Series C Preferred Stock dividends of $100,000 and $150,000, respectively.

Redemption Provisions of Series C Preferred Stock

The Series C Preferred Stock may be redeemed by the Company at the Company’s option in cash at any time, in whole or in part, upon payment of the stated value of the Series C Preferred Stock, and all related accrued but unpaid dividends. If a “fundamental change” occurs at any time while the Series C Preferred Stock is outstanding, the holders of shares of Series C Preferred Stock shall be immediately redeemed and repaid from assets of the Company or the proceeds of such fundamental change, as applicable, and legally available for distribution to its stockholders, an amount in cash equal to the stated value of the Series C Preferred Stock, and all related accrued but unpaid dividends.

If the legally available assets of the Company and the proceeds of such “fundamental change” are insufficient to pay all of the Holders of the Series C Preferred Stock, then the Holders of the Series C Preferred Stock shall share ratably in any such distribution in proportion to the amount that they would have been entitled to. A fundamental change includes but is not limited to: any change in the ownership of at least fifty percent (50%) of the voting stock; liquidation or dissolution; or the common stock ceases to be listed on the market upon which it currently trades.

Voting Rights

The holders of the Series C Preferred Stock are entitled to vote on any matter submitted to the stockholders of the Company for a vote. One (1) share of Series C Preferred Stock shall carry the same voting rights as one (1) share of common stock.

Classification

A redeemable equity security is to be classified as temporary equity if it is conditionally redeemable upon the occurrence of an event that is not solely within the control of the issuer upon the determination that such events are probable, the equity security would be classified as a liability. Given the Series C Preferred Stock contains a fundamental change provision, the security is considered conditionally redeemable. Therefore, the Company classified the Series C Preferred Stock as temporary equity in the consolidated balance sheets at December 31, 2020 and 2019 until such time that events occur that indicate otherwise.

On June 11, 2019, the Company made a retroactive dividend payment adjustment of $50,000 to the Series C Preferred Stockholders pursuant to the terms and conditions set forth in the Certificate of Designations, Preferences and Rights of the Series C Non-Convertible Voting Preferred Stock.

Warrants

The following table summarizes the Company’s warrants outstanding and exercisable at December 31, 2020 and 2019:

						Weighted
				Weighted		Average
				Average		Remaining		Aggregate
	Number of			Exercise		Life		Intrinsic
	Warrants			Price		In Years		Value
Outstanding at January 1, 2019		5,090,352		$	5.42		3.32	$	6,672,902
Issued		2,469,136			1.05		5.00		-
Exercised		-			-		-		-
Cancelled		(586,267	)		17.87		-		-
Outstanding and Exercisable at December 31, 2019		6,973,221		$	2.83		3.53	$	-
Issued		11,390,324			.54		5.00		-
Exercised(1)		(2,579,718	)		.50		-		-
Cancelled		(93,750	)		40.10		-		-
Outstanding and Exercisable at December 31, 2020		15,690,077		$	1.33		4.10	$	10,850,158

(1)	During the year ended December 31, 2020, the Company received proceeds of $1,279,859 in connection with the exercise of warrants into 2,579,718 shares of Common Stock at an average exercise price of approximately $0.50 per share.

Income Taxes

12 Months Ended

Dec. 31, 2020

Income Tax Disclosure [Abstract]

INCOME TAXES

NOTE 9 - INCOME TAXES

As of December 31, 2020, the Company had US federal and state net operating loss (“NOLs”) carryovers of $43,520,967 and $24,126,647 respectively. Federal and state NOL’s generated through December 31, 2017 are available to offset future taxable income, which expire beginning in 2033. Federal NOL’s generated for years starting after December 31, 2018 are available to offset future taxable income indefinitely. State NOL’s generated for years starting after December 31, 2018 that are available to offset future taxable income indefinitely vary by state. The Company has Federal Capital loss carryovers of $11,779,190 at December 31, 2020, which expire in 2024. The Company also has state Capital loss carryovers of $4,621,480 at December 31, 2020, which begin to expire in 2024, and have no carryback period. In addition, the Company had tax credit carryforwards of $205,028 at December 31, 2020 that will be available to reduce future tax liabilities. The tax credit carryforwards will begin to expire beginning in 2033.

In accordance with Section 382 of the Internal Revenue Code, deductibility of the Company’s NOLs may be subject to an annual limitation in the event of a change of control. The Company has not determined whether a change of control has occurred as of December 31, 2020 with respect to the Nxt-ID NOLs and therefore no limitation under Section 382 has been computed. Management will review for such limitations before any of the Nxt-ID NOLs are utilized against future taxable income.

The Company has no material uncertain tax positions for any of the reporting periods presented. No interest or penalty expense was recorded during the year or has been accrued as of December 31, 2019 or 2020. The Company does not expect any material changes to any uncertain tax positions in the next twelve months. The Company has filed all of its tax returns for all prior periods through December 31, 2019 and intends to timely file the income tax returns for the period ending December 31, 2020. As a result, the Company’s net operating loss carryovers will now be available to offset any future taxable income.

The Company is subject to taxation in the United States and various states. As of December 31, 2020, the Company’s tax years post 2016 are subject to examination by the tax authorities. With few exceptions, as of December 31, 2020 the Company is no longer subject to U.S. federal or state examinations by tax authorities for years before December 31, 2017. The Company has not been examined or received notice of pending examination by the federal or any state and local tax authority. To the extent a tax authority examines an open tax year and makes an assessment, the results from operations could be affected through additional tax liabilities or adjustments to the amount of NOL carryforward or tax basis of other components of deferred tax.

The income tax (benefit) provision consists of the following:

	December 31,
	2020			2019
Current income tax provision
Federal	$	-		$	-
State		24,886			32,826
		24,886			32,826
Deferred income tax (benefit)
Federal		(682,378	)		(3,589,359	)
State		67,828			(542,836	)
Change in valuation allowance		614,550			3,766,798
		-			(365,397	)

Total income tax provision (benefit)	$	24,886		$	(332,571	)

A reconciliation of the effective income tax rate and the statutory federal income tax rate from continuing operations is as follows:

	December 31,
	2020			2019
U.S. federal statutory rate		21.00	%		21.00	%
State income tax rate, net of federal benefit		(2.63	)		7.83
Other permanent differences		2.39			(4.59	)
Loss on sale of Fit Pay		-			45.02
Less: valuation allowance		(21.64	)		(56.95	)
Provision for income taxes		(0.88	)%		(12.31	)%

In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences representing net future deductible amounts become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. After consideration of all of the information available, Management believes that significant uncertainty exists with respect to future realization of all of the deferred tax assets and has therefore established a full valuation allowance. For the periods ended December 31, 2019 and December 31, 2020, sufficient net operating losses with indefinite carryforward periods have been generated, such that the deferred tax liabilities related to indefinite lived intangibles now represent a source of future taxable income with respect to the utilization of these deferred tax assets.

The tax effects of temporary differences that give rise to deferred tax assets and liabilities are presented below:

	December 31,
	2020			2019
Deferred tax assets:
Net operating loss carryforward	$	10,290,985		$	9,362,936
Tax credits		205,028			205,028
Lease liabilities		68,596			25,768
Accruals and reserves		213,627			278,648
Capital loss carryforwards		2,619,921			2,820,405
Tangible and intangible assets		336,067			325,754
Charitable donations		2,836			5,874
Total deferred tax assets before valuation allowance:		13,737,060			13,024,413
Valuation allowance		(12,744,883	)		(12,212,147	)
Deferred tax assets, net of valuation allowance		992,177			812,266

Deferred tax liabilities:
Right-of-use assets	$	(68,240	)		(25,409	)
Tangible and intangible assets		(923,937	)	$	(786,857	)
Total deferred tax liabilities	$	(992,177	)	$	(812,266	)

Net deferred tax liability	$	-		$	-

Commitments and Contingencies Disclosure [Abstract]

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References + Details

Commitments and Contingencies

12 Months Ended

Dec. 31, 2020

COMMITMENTS AND CONTINGENCIES

NOTE 10 - COMMITMENTS AND CONTINGENCIES

LEGAL MATTERS

On February 24, 2020, Michael J. Orlando, as shareholder representative (the “Shareholder Representative”), and the other stockholders of Fit Pay, Inc. (collectively, the “Fit Pay Shareholders”), filed a lawsuit in the United States District Court for the Southern District of New York against the Company, CrowdOut Capital, LLC, and Garmin International, Inc. (the “Complaint”). See Orlando v. Nxt-ID, Inc. No. 20-cv-1604 (S.D.N.Y.). The Complaint alleges that the Company has breached certain contractual obligations under a merger agreement, dated May 23, 2017, between Fit Pay, Inc. and the Company, regarding certain future, contingent earnout payments allegedly that could be owed to the Fit Pay Shareholders from future revenues. The Complaint seeks unspecified monetary damages from the defendants. The Company believes that these claims are without merit and plans to vigorously defend the action. On May 12, 2020, the Company filed an answer and counterclaims alleging, among other things, fraud and breach of fiduciary duty of the Shareholder Representative as well as arguing that the Shareholder Representative should be estopped from pursuing these claims. The Company has moved for summary judgment to have the lawsuit dismissed. The Company has been able to successfully stay discovery pending the court’s ruling on motions to dismiss by Garmin International, Inc. and CrowdOut Capital, LLC. In March 2021, following our successful application to stay all discovery, the court granted CrowdOut’s and Garmin’s separate motions to dismiss. Orlando’s claim against the Company still remains and the Company’s motion for summary judgment is still pending.

In connection with the sale of Fit-Pay, Inc., Giesecke+Devrient Mobile Security America, Inc. (“GDMSAI”) has identified a disagreement with the Company over calculation of dividends with respect to GDMSAI’s Series C Non-Convertible Voting Preferred Stock (the “Series C”) of the Company. On August 13, 2020, the Company was sued by GDMSAI seeking, among other things, $440,000 of dividends that it believes are owed to it pursuant to the terms of the Series C. The Company believes that GDMSAI’s claims are not correct and plans to vigorously defend the action. The Company has moved to have the case removed from Delaware to New York, where the Company claims the forum clause requires the claims to be heard. The Company has opposed GDMSAI’s motion for summary judgment. In March 2021, a Delaware Chancery court rejected our argument that the Fit Pay merger agreement requires litigation solely in New York and thereafter granted GDMSAI summary judgment on the merits, holding that relevant dividend language required a perpetually paid dividend once the $50M threshold had been achieved. The Company plans to appeal. There are no assurances that our appeal will be successful and even if our appeal is successful that a New York court will agree with our interpretation of the manner in which dividends on the Series C Preferred are to be calculated.

From time to time, the Company may be involved in various claims and legal actions arising in the ordinary course of our business. Other than the above, there is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of the Company or any of our subsidiaries, threatened against or affecting our company, or any of our subsidiaries in which an adverse decision could have a material adverse effect upon our business, operating results, or financial condition.

COMMITMENTS

The Company leases office space and a fulfillment center in the U.S., which are classified as operating leases expiring at various dates. The Company determines if an arrangement qualifies as a lease at the lease inception. Operating lease liabilities are recorded based on the present value of the future lease payments over the lease term, assessed as of the commencement date. The Company’s real estate leases, which are for office space and a fulfillment center, generally have a lease term between 3 and 5 years. The Company also leases a copier with a lease term of 5 years. The Company’s leases are comprised of fixed lease payments and also include executory costs such as common area maintenance, as well as property insurance and property taxes. The Company has elected to account for the lease and non-lease components as a single lease component for its real estate leases. Lease payments, which may include lease components and non-lease components, are included in the measurement of the Company’s lease liabilities to the extent that such payments are either fixed amounts or variable amounts based on a rate or index (fixed in substance) as stipulated in the lease contract. Any actual costs in excess of such amounts are expensed as incurred as variable lease cost.

The Company’s lease agreements generally do not specify an implicit borrowing rate, and as such, the Company utilizes its incremental borrowing rate by lease term, in order to calculate the present value of the future lease payments. The discount rate represents a risk-adjusted rate on a secured basis, and is the rate at which the Company would borrow funds to satisfy the scheduled lease liability payment streams commensurate with the lease term. On January 1, 2019, the discount rate used on existing leases at adoption was determined based on the remaining lease term using available data as of that date. The Company’s lease agreement for its warehouse space located in Louisville, Kentucky expired on August 31, 2020. As a result, the Company entered into a new five-year lease agreement in June 2020 for new warehouse space also located in Louisville, Kentucky. The monthly rent which commenced in September 2020 is $6,000 per month and increases approximately 3% annually thereafter. The ROU asset value added as a result of this new lease agreement was $279,024. The Company’s ROU asset and lease liability accounts reflect the inclusion of this new lease agreement on the Company’s consolidated balance sheet as of December 31, 2020.

Certain of the Company’s lease agreements, primarily related to real estate, include options for the Company to either renew (extend) or early terminate the lease. Leases with renewal options allow the Company to extend the lease term typically between 1 and 3 years. Renewal options are reviewed at lease commencement to determine if such options are reasonably certain of being exercised, which could impact the lease term. When determining if a renewal option is reasonably certain of being exercised, the Company considers several factors, including but not limited to, significance of leasehold improvements incurred on the property, whether the asset is difficult to replace, or specific characteristics unique to the particular lease that would make it reasonably certain that the Company would exercise such option. In most cases, the Company has concluded that renewal and early termination options are not reasonably certain of being exercised by the Company (and thus not included in the Company’s ROU asset and lease liability) unless there is an economic, financial or business reason to do so.

For the year ended December 31, 2020, total operating lease cost was $147,841 and is recorded in cost of sales and selling, general and administrative expenses, dependent on the nature of the leased asset. The operating lease cost is recognized on a straight-line basis over the lease term. The following summarizes (i) the future minimum undiscounted lease payments under non-cancelable lease for each of the next four years and thereafter, incorporating the practical expedient to account for lease and non-lease components as a single lease component for our existing real estate leases, (ii) a reconciliation of the undiscounted lease payments to the present value of the lease liabilities recognized, and (iii) the lease-related account balances on the Company’s consolidated balance sheet, as of December 31, 2020:

Year Ending December 31,

2021	$	90,986
2022		93,385
2023		89,724
2024		80,000
2025		54,400
Total future minimum lease payments	$	408,495
Less imputed interest		(100,110	)
Total present value of future minimum lease payments	$	308,385

As of December 31, 2020

Operating lease right-of-use assets	$	306,786

Other accrued expenses	$	54,476
Other long-term liabilities	$	253,909
	$	308,385
As of December 31, 2020

Weighted Average Remaining Lease Term		4.3 years
Weighted Average Discount Rate		12.80	%

Coronavirus – COVID-19

In early 2020, the coronavirus that causes COVID-19 was reported to have surfaced in China. The Company’s primary supply chain is located in China and other Asian-based locations. To date, the Company’s supply chain has not experienced any significant disruptions. The global spread of this virus has caused significant business disruption around the world including the United States, the primary area in which the Company operates and sells its products. The business disruption is currently expected to be temporary, however there is considerable uncertainty around the duration of the business disruption. Therefore, while the Company expects this matter to negatively impact the Company’s financial condition, results of operations, or cash flows, the extent of the financial impact and duration cannot be reasonably estimated at this time.

Subsequent Events

12 Months Ended

Dec. 31, 2020

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

NOTE 11 - SUBSEQUENT EVENTS

The Company evaluates events that have occurred after the balance sheet date but before the financial statements are issued.

On January 8, 2021, the Company entered into a Warrant Amendment and Exercise Agreement (the “Amendment Agreement”) with holders (the “Holder”) of a common stock purchase warrant, dated April 4, 2019, previously issued by the Company to the Holder (the “Original Warrant”).

In consideration for each exercise of the Original Warrant that occurs within 45 calendar days of the date of the Amendment Agreement, in addition to the issuance of the Warrant Shares (as defined in the Original Warrant) on or prior to the Warrant Share Delivery Date (as defined in the Original Warrant), the Company has agreed to deliver to the Investor a new warrant to purchase a number of shares of the Company’s common stock, par value $0.0001 per share (the “Common Stock”), equal to the number of Original Warrants that the Holder has exercised pursuant to the terms of the Original Warrant, at an exercise price of $1.525 per share, which represents the average Nasdaq Official Closing Price of the Common Stock (as reflected on Nasdaq.com) for the five trading days immediately preceding the date of the Amendment Agreement (the “New Warrants”). The Investor currently holds Original Warrants exercisable for up to 2,469,136 shares of Common Stock, and, therefore, may receive up to an equivalent number of New Warrants. The Investor may continue to exercise the Original Warrants after 45 calendar days of the date of the Amendment Agreement, but the Investor will not receive any New Warrants in consideration for the exercise of any Original Warrants exercised thereafter.

The Amendment Agreement contains customary representations, warranties and covenants by each of the Company and the Investor.

The New Warrants, if issued, are exercisable for up to the original expiration dates of the Original Warrants, which is April 4, 2024. The exercise price and number of shares issuable upon exercise of the New Warrants are subject to traditional adjustment for stock splits, combinations, recapitalization events and certain dilutive issuances. The New Warrants are required to be exercised for cash; however, if during the term of the New Warrants there is not an effective registration statement under the Securities Act of 1933, as amended (the “Securities Act”), covering the resale of the shares of Common Stock issuable upon exercise of the New Warrants, then the New Warrants may be exercised on a cashless (net exercise) basis pursuant to the formula provided in the New Warrants.

The Company intends to use the proceeds of any exercise of the Original Warrants for working capital purposes, the launch of new products and to reduce its debt outstanding.

On January 14, 2021, the Company issued 2,073,687 shares of common stock in connection with the cashless exercise of 3,749,000 warrants.

On January 21, 2021, the Company and LogicMark, LLC, a wholly-owned subsidiary of the Company filed their respective applications for forgiveness of the loans pursuant to the Paycheck Protection Program under Division A, Title I of the Coronavirus Aid, Relief, and Economic Security Act.

On January 29, 2021, the Company received proceeds of $525,000 in connection with the exercise of 500,000 warrants to purchase common stock at an exercise price of $1.05.

On February 1, 2021, the Company received proceeds of $4,000,004 in connection with the issuance 1,476,016 shares of Series E preferred stock.

On February 1, 2021, 738,008 shares of Series E Preferred stock were converted into 1,476,016 shares of common stock.

On February 4, 2021, the Company issued 132,826 shares of common stock to certain employees under the 2018 and 2019 management incentive plans.

On February 8, 2021, the Company received proceeds of $2,067,593 in connection with the exercise of 1,969,136 warrants to purchase common stock at an exercise price of $1.05.

On February 8, 2021, 450,000 shares of Series E Preferred stock were converted into 900,000 shares of common stock.

On February 8, 2021, the Company’s wholly-owned subsidiary, LogicMark, LLC, entered into a second amendment (the “Second Amendment”) to the senior Secured Credit Agreement, dated as of May 3, 2019, as amended (the “Credit Agreement”), with each financial institution from time to time party thereto as lender (the “Lenders”), and a senior secured lender, as administrative agent and collateral agent for the Lenders (the “Agent”). Pursuant to the Second Amendment, LogicMark made a $5,000,000 voluntary prepayment (the “Prepayment”) on its $16,500,000 aggregate principal amount term loan originally made by the Lenders to LogicMark pursuant to the Credit Agreement (the “Term Loan”) and the Agent agreed to accept (i) LogicMark’s payment of a prepayment premium in the amount of $125,000, which is equal to 2.5% of the Prepayment, rather than 5% of the Prepayment as required by the Credit Agreement, and (ii) an extension of the maturity date of the Term Loan to May 22, 2023.

On February 9, 2021, 288,008 shares of Series E Preferred stock were converted into 576,016 shares of common stock.

On February 17, 2021, the Company received proceeds $1,230,000 in connection with the exercise of 1,000,000 warrants to purchase common stock at an exercise price of $1.23.

On February 17, 2021, the Company received proceeds $2,847,902 in connection with the exercise of 1,898,601 warrants to purchase common stock at an exercise price of $1.50.

On February 17, 2021, the Company issued 2,165,642 shares of common stock in connection with the cashless exercise of 2,530,303 warrants.

On March 2, 2021, the Company’s wholly-owned subsidiary, LogicMark, LLC received notification from the Small Business Administration that its loan under the Paycheck Protection Program in the amount of $301,390 plus accrued interest of $2,320 has been forgiven.

Accounting Policies, by Policy (Policies)

12 Months Ended

Dec. 31, 2020

USE OF ESTIMATES IN THE FINANCIAL STATEMENTS

USE OF ESTIMATES IN THE FINANCIAL STATEMENTS

PRINCIPLES OF CONSOLIDATION

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of Nxt-ID and its wholly-owned subsidiaries. Intercompany balances and transactions have been eliminated in consolidation.

CASH

CASH

RESTRICTED CASH

RESTRICTED CASH

CONCENTRATIONS OF CREDIT RISK

CONCENTRATIONS OF CREDIT RISK

REVENUE RECOGNITION

REVENUE RECOGNITION

Sales to Distributors and Resellers

SHIPPING AND HANDLING

SHIPPING AND HANDLING

ACCOUNTS RECEIVABLE

Accounts Receivable

INVENTORY

INVENTORY

LONG-LIVED ASSETS

LONG-LIVED ASSETS

PROPERTY AND EQUIPMENT

PROPERTY AND EQUIPMENT

Equipment	5 years
Furniture and fixtures	3 to 5 years
Tooling and molds	2 to 3 years

GOODWILL

GOODWILL

OTHER INTANGIBLE ASSETS

OTHER INTANGIBLE ASSETS

The Company’s intangible assets are related to the acquisition of LogicMark and are included in other intangible assets in the Company’s consolidated balance sheet at December 31, 2020 and 2019.

Amortization expense estimated for each of the next five fiscal years, 2021 through 2025, is expected to be approximately $762,000 per year.

CONVERTIBLE INSTRUMENTS

CONVERTIBLE INSTRUMENTS

DERIVATIVE FINANCIAL INSTRUMENTS

DERIVATIVE FINANCIAL INSTRUMENTS

INCOME TAXES

INCOME TAXES

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION

NET LOSS PER SHARE

NET LOSS PER SHARE

RESEARCH AND DEVELOPMENT

RESEARCH AND DEVELOPMENT

RECENT ACCOUNTING PRONOUNCEMENTS

RECENT ACCOUNTING PRONOUNCEMENTS

Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2020

Schedule of estimated useful life of property and equipment

Equipment	5 years
Furniture and fixtures	3 to 5 years
Tooling and molds	2 to 3 years

Discontinued Operations (Tables)

12 Months Ended

Dec. 31, 2020

Purchase Agreement [Member]

Discontinued Operations (Tables) [Line Items]

Schedule of discontinued operations

Total sales price	$	3,323,198
Net book value of discontinued operations⁽¹⁾		126,062
Write-off of goodwill related to acquisition of Fit Pay		(9,119,709	)
Write-off of unamortized other intangibles related to acquisition of Fit Pay		(2,674,607	)
Write-off of remaining contingent consideration		2,611,169
Transaction fees incurred		(254,880	)
Loss on sale of discontinued operations	$	(5,988,767	)

Manufacturing Agreement [Member]

Discontinued Operations (Tables) [Line Items]

Schedule of discontinued operations

	For the Years Ended
	December 31,
	2019

Net sales	$	625,771
Cost of sales		194,856
Gross profit (loss)		430,915
Operating expenses		3,859,222
Interest expense		3,963
Income tax expense (benefit)		-
Loss from discontinued operations	$	(3,432,270	)

Schedule of Accrued Expenses

Tabular disclosure of information related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component.

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+ Details

Accrued Expenses (Tables)

12 Months Ended

Dec. 31, 2020

Payables and Accruals [Abstract]

	December 31,
	2020		2019
Salaries, payroll taxes and vacation	$	130,093	$	92,334
Consulting fees		-		53,563
Merchant bank fees		19,754		26,589
State income taxes		38,672		23,800
Professional fees		226,794		119,016
Management incentives		500,419		758,907
Interest expense		128,187		148,980
Lease liability		54,476		68,576
Dividends – Series C Preferred Stock		25,000		22,182
Other		191,867		178,164
Totals	$	1,315,262	$	1,492,111

Debt Refinancing (Tables)

12 Months Ended

Dec. 31, 2020

Debt Disclosure [Abstract]

Schedule of maturity of the Company's term debt

2021	$	2,062,500
2022		9,033,377
Total term debt	$	11,095,877

Stockholders' Equity (Tables)

12 Months Ended

Dec. 31, 2020

Stockholders' Equity Note [Abstract]

Summary of warrants outstanding and exercisable

						Weighted
				Weighted		Average
				Average		Remaining		Aggregate
	Number of			Exercise		Life		Intrinsic
	Warrants			Price		In Years		Value
Outstanding at January 1, 2019		5,090,352		$	5.42		3.32	$	6,672,902
Issued		2,469,136			1.05		5.00		-
Exercised		-			-		-		-
Cancelled		(586,267	)		17.87		-		-
Outstanding and Exercisable at December 31, 2019		6,973,221		$	2.83		3.53	$	-
Issued		11,390,324			.54		5.00		-
Exercised(1)		(2,579,718	)		.50		-		-
Cancelled		(93,750	)		40.10		-		-
Outstanding and Exercisable at December 31, 2020		15,690,077		$	1.33		4.10	$	10,850,158

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2020

Income Tax Disclosure [Abstract]

Schedule of income tax (benefit) provision

	December 31,
	2020			2019
Current income tax provision
Federal	$	-		$	-
State		24,886			32,826
		24,886			32,826
Deferred income tax (benefit)
Federal		(682,378	)		(3,589,359	)
State		67,828			(542,836	)
Change in valuation allowance		614,550			3,766,798
		-			(365,397	)

Total income tax provision (benefit)	$	24,886		$	(332,571	)

Schedule of reconciliation of effective income tax rate and statutory federal income tax rate

	December 31,
	2020			2019
U.S. federal statutory rate		21.00	%		21.00	%
State income tax rate, net of federal benefit		(2.63	)		7.83
Other permanent differences		2.39			(4.59	)
Loss on sale of Fit Pay		-			45.02
Less: valuation allowance		(21.64	)		(56.95	)
Provision for income taxes		(0.88	)%		(12.31	)%

Schedule of deferred tax assets and liabilities

	December 31,
	2020			2019
Deferred tax assets:
Net operating loss carryforward	$	10,290,985		$	9,362,936
Tax credits		205,028			205,028
Lease liabilities		68,596			25,768
Accruals and reserves		213,627			278,648
Capital loss carryforwards		2,619,921			2,820,405
Tangible and intangible assets		336,067			325,754
Charitable donations		2,836			5,874
Total deferred tax assets before valuation allowance:		13,737,060			13,024,413
Valuation allowance		(12,744,883	)		(12,212,147	)
Deferred tax assets, net of valuation allowance		992,177			812,266

Deferred tax liabilities:
Right-of-use assets	$	(68,240	)		(25,409	)
Tangible and intangible assets		(923,937	)	$	(786,857	)
Total deferred tax liabilities	$	(992,177	)	$	(812,266	)

Net deferred tax liability	$	-		$	-

Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2020

Commitments and Contingencies Disclosure [Abstract]

Schedule of future lease obligation

Year Ending December 31,

2021	$	90,986
2022		93,385
2023		89,724
2024		80,000
2025		54,400
Total future minimum lease payments	$	408,495
Less imputed interest		(100,110	)
Total present value of future minimum lease payments	$	308,385

Schedule of lease expense

As of December 31, 2020

Operating lease right-of-use assets	$	306,786

Other accrued expenses	$	54,476
Other long-term liabilities	$	253,909
	$	308,385
As of December 31, 2020

Weighted Average Remaining Lease Term		4.3 years
Weighted Average Discount Rate		12.80	%

Organization and Principal Business Activities (Details) - USD ($)	Sep. 09, 2019	Aug. 06, 2019
Accounting Policies [Abstract]
Non-interest bearing working capital		$ 500,000
Sale of subsidiary	$ 3,320,000

Liquidity and Management Plans (Details) - USD ($)	12 Months Ended
Liquidity and Management Plans (Details) - USD ($)	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Operating income from continuing operations	$ (586,078)	$ 2,577,791
Net loss from continuing operations	(2,864,984)	(2,368,418)
Cash	4,387,416	1,587,250
Stockholders' equity	9,159,209	$ 6,714,588	$ 14,736,758
Working capital deficiency	578,797
Net proceeds exercise of common stock warrants	$ 5,144,387

Amount after tax of income (loss) from continuing operations attributable to the parent.

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+ Details

Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]

Total of all stockholders' equity (deficit) items, net of receivables from officers, directors, owners, and affiliates of the entity which are attributable to the parent. The amount of the economic entity's stockholders' equity attributable to the parent excludes the amount of stockholders' equity which is allocable to that ownership interest in subsidiary equity which is not attributable to the parent (noncontrolling interest, minority interest). This excludes temporary equity and is sometimes called permanent equity.

+ References + Details

Summary of Significant Accounting Policies (Details) - USD ($)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Apr. 02, 2019
Product Information [Line Items]
Restricted cash	$ 150,130	$ 150,130
Cash	4,387,416	1,587,250
Freight charges	524,481	658,889
Allowance for doubtful accounts	126,733	126,733
Inventory raw materials	199,523
Inventory finished goods	567,828	167,357
Non-cash charge for modification of convertible exchange notes and warrants		1,135,922
Prepaid inventory	332,475	201,496
Goodwill	9,119,709
Amortization expense of intangible assets	761,815	$ 761,815
Amortization expense estimated for 2020	762,000
Potentially dilutive securities (in Shares)		6,973,221	2,469,136
Logic Mark Investment Partners [Member] \| Patents [Member]
Product Information [Line Items]
Fair value of patents	$ 2,445,709	$ 2,818,434
Other intangible assets, estimated useful lives	11 years
Logic Mark Investment Partners [Member] \| Trademarks [Member]
Product Information [Line Items]
Fair value of trademarks	$ 978,494	1,041,370
Other intangible assets, estimated useful lives	20 years
Logic Mark Investment Partners [Member] \| Customer Relationships [Member]
Product Information [Line Items]
Fair value of customer relationships	$ 1,814,259	$ 2,140,473
Other intangible assets, estimated useful lives	10 years
Warrant [Member]
Product Information [Line Items]
Stock options to purchase (in Shares)	335,272
Potentially dilutive securities (in Shares)	15,690,077

Summary of Significant Accounting Policies (Details) - Schedule of estimated useful life of property and equipment	12 Months Ended
	Dec. 31, 2020
Equipment [Member]
Summary of Significant Accounting Policies (Details) - Schedule of estimated useful life of property and equipment [Line Items]
Estimated useful life	5 years
Furniture and Fixtures [Member] \| Minimum [Member]
Summary of Significant Accounting Policies (Details) - Schedule of estimated useful life of property and equipment [Line Items]
Estimated useful life	3 years
Furniture and Fixtures [Member] \| Maximum [Member]
Summary of Significant Accounting Policies (Details) - Schedule of estimated useful life of property and equipment [Line Items]
Estimated useful life	5 years
Tooling and molds [Member] \| Minimum [Member]
Summary of Significant Accounting Policies (Details) - Schedule of estimated useful life of property and equipment [Line Items]
Estimated useful life	2 years
Tooling and molds [Member] \| Maximum [Member]
Summary of Significant Accounting Policies (Details) - Schedule of estimated useful life of property and equipment [Line Items]
Estimated useful life	3 years

Discontinued Operations (Details) - USD ($)	Sep. 09, 2019	Sep. 08, 2019	Aug. 07, 2019	Dec. 31, 2020	Dec. 31, 2019
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Common stock, shares issued (in Shares)				40,619,974	30,048,854
Common stock, shares outstanding (in Shares)				40,619,974	30,048,854
Common stock par value (in Dollars per share)				$ 0.0001	$ 0.0001
Included cash		$ 113,148
Purchase Agreement [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Common stock, shares issued (in Shares)	1,000
Common stock, shares outstanding (in Shares)	1,000
Common stock par value (in Dollars per share)	$ 0.0001
Purchase price	$ 3,320,000		$ 500,000
Loss on sale of discontinued operations	$ 5,988,767

Discontinued Operations (Details) - Schedule of discontinued operations (Purchase Agreement) - Purchase Agreement [Member]

12 Months Ended

Dec. 31, 2019

USD ($)

Total sales price

$ 3,323,198

Net book value of discontinued operations

126,062

^[1]

Write-off of goodwill related to acquisition of Fit Pay

(9,119,709)

Write-off of unamortized other intangibles related to acquisition of Fit Pay

(2,674,607)

Write-off of remaining contingent consideration

2,611,169

Transaction fees incurred

(254,880)

Loss on sale of discontinued operations

$ (5,988,767)

[1]	The net book value of discontinued operations at September 8, 2019 included cash of $113,148.

Discontinued Operations (Details) - Schedule of discontinued operations (Manufacturing Agreement)	12 Months Ended
	Dec. 31, 2019 USD ($)
Schedule of discontinued operations (Manufacturing Agreement) [Abstract]
Net sales	$ 625,771
Cost of sales	194,856
Gross profit (loss)	430,915
Operating expenses	3,859,222
Interest expense	3,963
Income tax expense (benefit)
Loss from discontinued operations	$ (3,432,270)

Accrued Expenses (Details) - Schedule of Accrued Expenses - USD ($)	Dec. 31, 2020	Dec. 31, 2019
Schedule of Accrued Expenses [Abstract]
Salaries, payroll taxes and vacation	$ 130,093	$ 92,334
Consulting fees		53,563
Merchant bank fees	19,754	26,589
State income taxes	38,672	23,800
Professional fees	226,794	119,016
Management incentives	500,419	758,907
Interest expense	128,187	148,980
Lease liability	54,476	68,576
Dividends – Series C Preferred Stock	25,000	22,182
Other	191,867	178,164
Totals	$ 1,315,262	$ 1,492,111

Debt Refinancing (Details) - USD ($)						1 Months Ended	12 Months Ended
Debt Refinancing (Details) - USD ($)	Feb. 08, 2021	May 08, 2020	May 06, 2020	May 03, 2019	May 03, 2019	May 24, 2018	Dec. 31, 2020	Dec. 31, 2019	Sep. 30, 2019
Debt Refinancing (Details) [Line Items]
Percentage of term loan bears interest rate							6.50%
Principal repayments							$ 2,212,500	$ 3,191,623
Term loan									$ 1,988,498
Amortized of deferred debt issue costs							$ 549,446	656,393
Credit agreement, description							The deferred debt issue costs include an exit fee of $1,072,500 which is equivalent to 6.5% of the term loan amount borrowed from CrowdOut Capital.
Exit fee							$ 1,072,500
Unamortized debt issuance expense							1,015,311	571,260
Legal fees due to Sagard Holdings Manager L.P						$ 757,308
Loan receivable		$ 346,390	$ 346,390
Bear interest rate		1.00%	1.00%
Lender Concentration Risk [Member]
Debt Refinancing (Details) [Line Items]
Amortized of deferred debt issue costs							$ 106,215	168,430
Subsequent Event [Member] \| Lender Concentration Risk [Member]
Debt Refinancing (Details) [Line Items]
Principal amount	$ 412,500
Term Loan [Member]
Debt Refinancing (Details) [Line Items]
Principal amount				$ 16,500,000		$ 16,000,000
Percentage of term loan bears interest rate						9.50%	13.00%
Deferred debt issue costs						$ 1,253,970	$ 1,831,989
Amortized of the deferred debt issuance costs								86,969
Debt discount						$ 705,541	137,855
Principal repayments							3,415,625
Amortized of deferred debt issue costs							549,446	569,424
Unamortized debt issuance expense							$ 713,119
Loss on extinguishment of debt					$ 2,343,879
Term Loan [Member] \| Subsequent Event [Member]
Debt Refinancing (Details) [Line Items]
Percentage of term loan bears interest rate	11.00%
Maturity date	May 22, 2023
Warrants and Registration Rights [Member]
Debt Refinancing (Details) [Line Items]
Debt discount amortization								$ 48,932

Debt Refinancing (Details) - Schedule of maturity of the Company's debt	Dec. 31, 2020 USD ($)
Schedule of maturity of the Company's debt [Abstract]
2021	$ 2,062,500
2022	9,033,377
Total term debt	$ 11,095,877

Stockholders' Equity (Details) - USD ($)							1 Months Ended		12 Months Ended
Stockholders' Equity (Details) - USD ($)	Jul. 14, 2020	Jun. 11, 2019	Apr. 02, 2019	Jan. 08, 2019	Aug. 24, 2017	Jan. 04, 2013	Dec. 18, 2020	Jul. 28, 2020	Dec. 31, 2020	Dec. 31, 2019
Stockholders' Equity (Details) [Line Items]
Deemed dividend from beneficial conversion feature
Gross proceeds								$ 7,350
Common stock shares issued (in Shares)								734,965
Warrant exercise price (in Dollars per share)			$ 1.05					$ 0.01
Common stock, par value (in Dollars per share)									$ 0.0001	$ 0.0001
Aggregate offering price										$ 1,299,042
Warrants to purchase shares of exercisable, description			the Company entered into a Securities Purchase agreement with an investor in connection with a registered direct public offering of 2,469,136 shares of the Company’s common stock. The shares of common stock were offered at a price of $0.81 per share and the Company received $1,915,000 in net proceeds from the sale.
Warrants to purchase aggregate outstanding (in Shares)			2,469,136							6,973,221
Share-based Compensation Arrangements by Share-based Payment Award, Options, Exercises in Period, Weighted Average Exercise Price (in Dollars per share)									$ 0.48
Employee bonus expense									$ 200,000	$ 200,000
Common stock fair value for fully-vested services rendered									160,000
Preferred stock dividend									$ 100,000	$ 150,000
Percentage of owner ship of voting stock									50.00%
Description on voting rights									One (1) share of Series C Preferred Stock shall carry the same voting rights as one (1) share of common stock.
December 2020 Offerings [Member]
Stockholders' Equity (Details) [Line Items]
Registered direct offering, description							(i) an aggregate of 1,515,151 shares of Series D preferred stock, convertible into an aggregate of up to 3,030,304 shares of common stock, (ii) common stock purchase warrants to purchase up to an aggregate of 1,000,000 shares of common stock at an exercise price of $0.49 per share, subject to customary adjustments thereunder, which were exercisable immediately upon issuance and have a term of five years, and (iii) common stock purchase warrants to purchase up to an aggregate of 5,060,606 shares of common stock at an exercise price of $0.49 per share with a term of five and one-half (5.5) years first exercisable six (6) months after issuance, subject to customary adjustments thereunder, for gross proceeds of $2,000,000, before deducting any offering expenses. The Company will use the net proceeds from this offering for working capital, new product initiatives and other general corporate purposes. On December 21, 2020, 1,515,151 shares of Series D preferred stock were converted into 3,030,304 shares of common stock.
July 2020 Offerings [Member]
Stockholders' Equity (Details) [Line Items]
Registered direct offering, description	On July 14, 2020, the Company closed a registered direct offering of (i) an aggregate of 3,778,513 shares of the Company’s common stock, par value $0.0001 per share; (ii) pre-funded warrants to purchase up to an aggregate of 734,965 shares of Common Stock at an exercise price of $0.01 per share, subject to customary adjustments thereunder; (iii) registered warrants, with a term of five (5) years exercisable immediately upon issuance, to purchase an aggregate of up to 1,579,718 shares of Common Stock (at an exercise price of $0.50 per share, subject to customary adjustments thereunder; and (iv) unregistered warrants, with a term of five and one-half (5.5) years first exercisable six (6) months after issuance, to purchase an aggregate of up to 3,750,000 shares of Common Stock at an exercise price of $0.65 per share, subject to customary adjustments thereunder, for gross proceeds of $1,864,528, before deducting any offering expenses.
2013 Long-Term Stock Incentive Plan [Member]
Stockholders' Equity (Details) [Line Items]
Common stock shares issued (in Shares)									335,272
Long-term stock incentive plan, description						The maximum aggregate number of shares of common stock that may be issued under the LTIP, including stock awards, stock issued to directors for serving on the Company’s board of directors, and stock appreciation rights, is limited to 10% of the shares of common stock outstanding on the first business or trading day of any fiscal year, which is 592,223 shares of common stock at January 1, 2021.
2017 Stock Incentive Plan [Member]
Stockholders' Equity (Details) [Line Items]
Common stock voting rights, description					The aggregate maximum number of shares of common stock (including shares underlying options) that may be issued under the 2017 SIP pursuant to awards of restricted shares or options will be limited to 10% of the outstanding shares of common stock, which calculation shall be made on the first (1st) business day of each new fiscal year; provided that for fiscal year 2017, 1,500,000 shares of common stock may be delivered to participants under the 2017 SIP. Thereafter, the 10% provision shall govern the 2017 SIP.
2017 Management Incentive Plan [Member]
Stockholders' Equity (Details) [Line Items]
Aggregate shares of common stock (in Shares)										289,216
Warrant [Member]
Stockholders' Equity (Details) [Line Items]
Warrant exercise price (in Dollars per share)									$ 0.50
Warrants to purchase aggregate outstanding (in Shares)									15,690,077
Proceeds received									$ 1,279,859
Exercise of warrants (in Shares)									2,579,718
Alliance Global Partners [Member]
Stockholders' Equity (Details) [Line Items]
Common stock shares issued (in Shares)										1,113,827
Common stock, par value (in Dollars per share)				$ 0.0001
Aggregate offering price				$ 15,000,000						$ 35,000
Fixed interest rate related to the interest rate compansation				3.00%
Net proceeds from common stock sold										$ 1,299,042
Director [Member] \| 2013 Long-Term Stock Incentive Plan [Member]
Stockholders' Equity (Details) [Line Items]
Aggregate fair value									$ 160,000
Non Executive Employees [Member]
Stockholders' Equity (Details) [Line Items]
Converted shares of common stock (in Shares)										372,078
Common stock fair value for fully-vested services rendered										$ 254,490
Non Executive Employees [Member] \| 2017 Management Incentive Plan [Member]
Stockholders' Equity (Details) [Line Items]
Aggregate fair value									$ 200,794
Aggregate fair value, shares (in Shares)									447,620
Executive Officer [Member] \| 2013 Long-Term Stock Incentive Plan [Member]
Stockholders' Equity (Details) [Line Items]
Aggregate fair value										216,267
Series D convertible preferred stock and the warrants [Member]
Stockholders' Equity (Details) [Line Items]
Deemed dividend from beneficial conversion feature									$ 758,922
Series C Preferred Stock [Member]
Stockholders' Equity (Details) [Line Items]
Cumulative dividends rate									5.00%
Preferred stock dividend		$ 50,000							$ 100,000	$ 150,000

Stockholders' Equity (Details) - Summary of warrants outstanding and exercisable - USD ($)

12 Months Ended

Dec. 31, 2020

Dec. 31, 2019

Number of Warrants

Number of Warrants, Outstanding

6,973,221

5,090,352

Number of Warrants, Issued

11,390,324

2,469,136

Number of Warrants, Exercised

(2,579,718)

^[1]

Number of Warrants, Cancelled

(93,750)

(586,267)

Number of Warrants, Outstanding

15,690,077

6,973,221

Weighted Average Exercise Price

Weighted Average Exercise Price, Outstanding

$ 2.83

$ 5.42

Weighted Average Exercise Price, Issued

0.54

1.05

Weighted Average Exercise Price, Exercised

0.50

^[1]

Weighted Average Exercise Price, Cancelled

40.10

17.87

Weighted Average Exercise Price, Outstanding

$ 1.33

$ 2.83

Weighted Average Remaining Life In Years

Weighted Average Remaining Life In Years, Outstanding

3 years 116 days

Weighted Average Remaining Life In Years, Issued

5 years

Weighted Average Remaining Life In Years, Exercised

^[1]

Weighted Average Remaining Life In Years, Cancelled

Weighted Average Remaining Life In Years, Outstanding

4 years 36 days

3 years 193 days

Aggregate Intrinsic Value