How NXT-ID (NASDAQ: $NXTD) Could Be a Big
Player in IoT: Q&A with CEO Gino Pereira
March 14, 2017 (Investorideas.com Newswire) The
next wave of innovative technologies is already making its way into the
mainstream. From digital payments to wearables and even the Internet of Things
(IoT), consumers have been longing for a new tech cycle to succeed the maturing
smartphone revolution. Now, they're finally getting it. But underneath the
surface of sleek interfaces and simple functionality are very complex issues
that companies developing these technologies have to wrestle with. In order for
a new technology product to succeed, consumers have to be able to trust that it
works and that they'll be safe using it.
This creates opportunities for a company like
NXT-ID (NASDAQ:NXTD), which specializes in developing solutions for identity verification,
security and privacy, encryption and data protection, payments, miniaturization
and sensor technologies. Equities.com had the opportunity to speak with Gino
Pereira, CEO of NXT-ID, to learn more about how the company is leveraging its
core technology to ride the next wave of tech innovations.
EQ: NXT-ID is a security technology company that
provides solutions to enable users to better manage their digital footprint in
key areas such as finance, healthcare and mobile computing. As the world is
becoming increasingly more digital, how does NXT-ID's long-term mission align
with growing trends like IoT and cybersecurity?
Pereira: Well, I think that all this growth and all
of these interconnected devices are going to require one critical thing for the
whole ecosystem to be successful, and that is essentially trust and security.
All of the innovation won't be helping anyone if you don't trust that
transactions being done through IoT are secure and your identity is safe.
Whether they be payments or simple things like access to your home and your
car, that's an essential part of the IoT ecosystem and that's the piece that we
feel we can play a big part in.
We provide a number of things on the security and
authorization front, basically recognizing whether the person using a device is
supposed to be using it. We can also provide encryption services to ensure that
transmissions in these apps and devices are secure, as well as an
authentication and decryption service that gets data to where it needs to go.
As long as you have these things, then you can really interconnect devices and
be confident in the security of the information that's being transmitted. We
think we can be a big piece of that.
EQ: As recently as just a few years ago, NXT-ID was
known almost exclusively for its Wocket Smart Wallet. Today, the company seems
to be getting into several different markets, particularly those in the
emerging technology space. How are you able to use the same underlying
technology of the Wocket to markets like IoT and digital security so quickly?
Pereira: Sure. At heart, our background is in the
skills that identify with security technologies. So, we're good at technologies
like payments and miniaturization. We have an expertise in biometrics and in
encryption technologies as well as sensor technologies. All of these elements
are things that work together to help provide security in different features.
They could be physical security or they could be digital security. So, the
reason why the Wocket was the initial product offering for the company was that
we felt that it was the area that had potentially the quickest growth. The
whole transition to the digital payment space is constantly evolving
underscored by tremendous innovation and we wanted to play in that.
We developed some very successful technologies with
Wocket, particularly a technology that we called WiMag, which is a wireless
magnetic stripe signal that enables us to make wireless transactions at regular
magnetic point-of-sale terminals. We leveraged our expertise in miniaturization
and developed some tremendously promising technologies during the course of
developing the Wocket. We developed some valuable technologies and it's that
technology base that we are expanding across a number of industries right now.
EQ: While the Wocket doesn't define your company,
the underlying technology is the key to what NXT-ID can do. To the point of
diversifying your markets, NXT-ID partnered with travel club WorldVentures for
the development of the Flye Smart Card. Beta testing for the “next-generation
smart card” has been ongoing for several months now. Can you bring us up to
speed how it works and the current status?
Pereira: Absolutely. WorldVentures is a terrific
partner and it's the first one of what we hope to be several of our B2B
contracts as we go forward. We have a $15 million purchase order from
WorldVentures against which we have started to make deliveries. The concept is
one that was really derived straight from Wocket. Essentially, this is now a
multi-purpose card with a lot of innovation on it that allows you to make
payments in multiple forms. It's also to be used by the members of
WorldVentures rewards points card. It also has a Bluetooth beacon on it that
allows their members to be recognized when they go to particular establishments,
so they receive the appropriate level of service. The reality is that it should
be unprecedented as a smart card. We're not aware of any of its caliber and
certainly no commercialized cards to date that have the multi-functionality. We
have started to deliver these cards to WorldVentures and to build out
additional inventory before they go live with their public launch. Currently,
they are doing extensive beta testing with hundreds of users in which we're
gathering feedback every day and making small tweaks to the card.
VIDEO: NXTD (Nasdaq:NXTD) and WorldVentures Demo
flye Smart Card
EQ: At the 2017 Consumer Electronics Show, NXT-ID
debuted a new module for Internet of Things devices, a product culminating from
a cooperative effort with Nordic Semiconductor. You say that this is the first
time Bluetooth Low Energy and Near-Field Communications have been integrated on
the same chip. What's the importance of this and what are some possible
applications that could generate demand for the NXTD/Nordic chip?
Pereira: First of all, the application – the whole
system-on-chip concept – is designed for wearables and IoT devices where real
estate is at a premium most of the time. What we've developed allows you to do
something on one chip that normally may take three chips. So, with that
manufacturers certainly save in costs. They also save in overall complexity,
most definitely in manufacturing complexity. Moreover, there are savings in the
number of potential areas where there could be manufacturing or use problems.
Ultimately, the new technology presents the opportunity to achieve a great deal
on a very low power device. This means you don't have to charge it as
frequently and it will be available for a vast range of IoT devices. It's
something that we envision white labelling for a number of companies.
EQ: Last summer, NXT-ID moved into the personal
emergency response systems (PERS) business with the acquisition of LogicMark.
IndustryARC forecasts that market to grow to an $8.4 billion market by 2020.
What attracted you to the PERS market? How do you intend to capture market
share from the bigger players here?
Pereira: The reason why we invested in a PERS
company is because it fits within our security technology portfolio. In this
case, it's personal security as opposed to digital or identity security. We
intend to apply our technology to next-generation devices to make them smaller,
slimmer, more appealing and much more in the context of what is available today
as wearables. That's our technological contribution to that area.
Having said that, we're dealing with existing
products. We are currently the only contract supplier to the VA Hospital with
this product, which represents the majority of the LogicMark business today.
Our intention is to take these product lines and roll them out into extended
retail distribution. We have a distribution model that I feel is potentially a
game changer in the space. Understand that in the PERS business, there are
monitored and non-monitored PERS. LogicMark is a leader in the non-monitored
space. Most larger companies, I think the vast majority of the industry, are in
the monitored space where they charge an initial fee with a monthly payment
after that. In this monitored model, the customer tends to have the device and
services on average for about three years. So, it's fairly expensive to have
one of these devices over a period of time.
VIDEO: LogicMark Non-Monitored medical alert
system video
EQ:
How will your model be different from most other competitors?
Pereira:
Our model is to sell the products outright where calls are automatically routed
to 911 if someone needs assistance. This way, there is no need for us to have a
call center, which removes the need for monthly fees. We think that there is a
certain niche out there for those individuals that are hesitant to sign up for
monthly payment deals and would readily respond to the ability to purchase the
device one time only. A lot of the buyers for these products are actually the
children of people that may need this type of device.
Children
feel a lot better if their parents have this type of protection and it's a much
simpler act to just go and purchase a product outright and give it to the
parent as opposed to signing up on a contract and making monthly payments.
Obviously, there is a huge difference in the overall costs during a three-year
period. So, we think we have something that will certainly appeal to a
significant segment of this market.
Also,
we're selling the units through contracts with the VA Hospitals, and we're
looking towards big box stores and other forms of retail distribution. The
acquisition cost is something that can really be optimized to specific
campaigns with specific purposes. So, I think there is a lower acquisition cost
per customer for the non-monitored model, and once our customers have the
product then they will have it for a while.
EQ:
We've discussed how NXT-ID's technology can be applied in the finance, travel
and health markets now. You also have products like 3D-ID, FaceMatch,
VoiceMatch and BioCloud. How does the portfolio all fit together?
Pereira:
We are definitely in expansion mode. We are actively looking to increase our
resources to allow us to fully exploit all our opportunities. That's something
that can take quite a bit of time, but we are looking to do that. I feel confident
that we will be starting to exploit these new opportunities in the coming year.
Certainly, the payment space is something that we are heavily concentrated on
as well as the PERS space.
3D-ID
is kind of the third leg of our business. A lot of the technology here was
developed to support high-level security applications for end-users like the
Department of Defense and law enforcement agencies. Currently, we are a
subcontractor to a major defense contractor on a large contract. That will be
the next growth component as part of our initiatives to build out that division
more fully in order to take advantage of opportunities there.
EQ:
For investors and readers interested in following NXT-ID's growth, what are
some key metrics that you think are very significant to track to gauge your
growth?
Pereira:
I laid out a plan at the end of last year of where we would like to take the
business. We have started to do that. We have executed on our first B2B
contract, which is significant for propelling us forward. We expect to do more
in the payment space. We also have said that we want to be a factor in the IoT
space. So, my suggestion is, as with most companies, to follow the company and
see if the management team delivers on what it says it's going deliver on.
We
expect to expand our payment applications. We expect to have meaningful
relationships in the IoT space that results in revenue for the company. We
expect to grow our PERS business and we will begin to develop the DOD
enforcement business as resources allow throughout the course of the year.
We're trying to do it on an accelerated basis, but we certainly have to
concentrate on what we have in front of us right now. So, it's really a matter
of following our results of delivering on what we say we're going to do and
judging our performance on those metrics.
EQ:
Wonderful. Do you have any closing thoughts you'd like to leave for our
readers?
Pereira:
We have a number of technologies that are potentially extremely valuable
commercially, and we're moving forward on that. If you track our financial
results over the course of 2016—we issued some pro forma results for 2016, and
the actual 10-K filing will be available at the end of March—readers can see a
progression to profitability. We expect to continue that pattern on a much more
accelerated basis throughout the course of 2017.
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Forward-Looking Statements for NXT-ID:
This press release contains
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements reflect management's
current expectations, as of the date of this press release, and involve certain
risks and uncertainties. Forward-looking statements include statements herein
with respect to the successful execution of the Company's business strategy.
The Company's actual results could differ materially from those anticipated in
these forward-looking statements as a result of various factors. Such risks and
uncertainties include, among other things, our ability to establish and
maintain the proprietary nature of our technology through the patent process,
as well as our ability to possibly license from others patents and patent
applications necessary to develop products; the availability of financing; the
Company's ability to implement its long range business plan for various
applications of its technology; the Company's ability to enter into agreements
with any necessary marketing and/or distribution partners; the impact of
competition, the obtaining and maintenance of any necessary regulatory
clearances applicable to applications of the Company's technology; and
management of growth and other risks and uncertainties that may be detailed
from time to time in the Company's reports filed with the Securities and
Exchange Commission.
NXT- ID Inc Contact:
Media:
D.
Van Zant
+1-800-665-0411
press@nxt-id.com
+1-800-665-0411
press@nxt-id.com
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