Source: NXT-ID Inc
The latest news to come out of NXT-ID Inc (NASDAQ:NXTD) sent shares higher by over 50%. NXT-ID and its partner WorldVentures announced the first purchase order for a new SmartCard being developed for WorldVentures vacation club members. The news sent shorts scrambling to cover as they were all banking on a Seeking Alpha hit piece earlier this month to derail the company’s prospects. When a company like WorldVentures invested $2 million in NXT-ID, we knew that they were going to use its member network to capitalize on the deal and do so they did.
The purchase order is for up to $15 million and is subject to WorldVentures acceptance of the prototype card now being manufactured. The purchase order calls for equal monthly deliveries with a value of $2.5 million a month from July to December 2016. With the exception of the order for the first $2.5 million, WorldVentures has the option to cancel, defer or increase monthly shipments with 90 days written notice on subsequent orders.
This follows the deal with WorldVentures that was signed last month. WorldVentures made a strategic investment of $2 million in Nxt-ID to develop a proprietary new wireless smart card for its members—numbering in the several hundreds of thousands worldwide—based on Nxt-ID’s Wocket, a unique smart wallet that serves to securely store all credit cards. The smart card will be customized with additional technologies and wireless features, such as the ability to seamlessly integrate with WorldVentures’s DreamTrips App to wirelessly check in and earn loyalty points towards free DreamTrips vacations at select restaurants.
DreamTrips is a travel club and entertainment community where nembers enjoy exciting excursions year-round to extraordinary destinations. WorldVentures currently has approximately 500,000 DreamTrips members, with as many as 80,000 new members joining every month. The vision of WorldVentures’s executive team is to make the smart card available to every existing member, and provide a member kit to every new member that includes the smart card. This strategic alliance is the first step in achieving that vision.
The DreamTrips card is a totally new product for NXT-ID and WorldVentures and will make travel, vacationing and even daily purchases simpler and more secure with a number of new and unique features to be announced prior to launch. It is a next generation SmartCard that does not require a Wocket and can operate as a stand-alone device. It can also sync to the DreamTrips Smartphone app for a connected user experience.
In the presentation to WorldVentures members, it was demonstrated how the new smart card, just like the Wocket card designed to replace all the cards in your wallet, the new DreamTrips card will make travel and vacationing simpler and more secure. David Tunnell, Executive Vice-President and Chief Technology Officer for NXT-ID was invited onstage during the smart card presentation. He said, “We received an overwhelmingly enthusiastic and positive reception at the convention. It was quite an experience being in front of tens of thousands of people and witness the support for our smartcard technology.”
This deal is a win/win for both companies. NXT-ID has a ready customer base for its products. WorldVentures has a member base that it can sell to. When a member purchases, NXT-ID gets a sale and WorldVentures benefits as an equity shareholder in NXTD. It’s the perfect deal for both companies.
Currently trading with a market cap of just $23 million, the worst looks to be behind NXTD and better days are ahead. We think the deal with WorldVentures is just the start of more to come between NXT-ID and WorldVentures. It’s quite possible that WorldVentures will eventually take over NXT-ID or the two firms will merge. WorldVentures already owns 24% of NXTD and a merger with a publicly traded company like NXTD would give WorldVentures founder Wayne Nugent some liquidity. WorldVentures is privately held and he owns 90% of the company. We’re expecting much more to come from NXT-ID and WorldVentures. For continuing coverage on NXTD and our other hot stock picks, sign up to Insider Financial today and get our free micro cap newsletter!
Disclosure: We have no position in NXTD and have not been compensated for this article.