7372 | ||||||||||||||
(State or Other Jurisdiction of Incorporation or Organization) | (Primary Standard Industrial Classification Number) | (IRS Employer Identification Number) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Large accelerated filer | o | Accelerated filer | o | |||||||||||
x | Smaller reporting company | |||||||||||||
Emerging growth company |
March 31, 2024 | December 31, 2023 | ||||||||||
(unaudited) | |||||||||||
ASSETS | |||||||||||
Current Assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Accounts receivable, net (includes unbilled receivables of $ | |||||||||||
Related party receivables | |||||||||||
Deferred financing cost | |||||||||||
Prepaid expenses and other current assets | |||||||||||
Total Current Assets | |||||||||||
Capitalized internal-use software, net | |||||||||||
Goodwill | |||||||||||
Intangible assets, net | |||||||||||
Property and equipment, net | |||||||||||
Operating lease right-of-use assets | |||||||||||
Other assets | |||||||||||
Total Assets | $ | $ | |||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
Current Liabilities: | |||||||||||
Accounts payable | $ | $ | |||||||||
Related party payables | |||||||||||
Accrued expenses | |||||||||||
Deferred revenue | |||||||||||
Income tax payable | |||||||||||
Short-term operating lease liabilities | |||||||||||
Short-term financial liabilities | |||||||||||
Total Current Liabilities | |||||||||||
Warrant liabilities | |||||||||||
Notes payable, including accrued interest of $ | |||||||||||
Long-term operating lease liabilities | |||||||||||
Total Liabilities | |||||||||||
Commitments, Note 10 | |||||||||||
Stockholders’ Equity: | |||||||||||
Common stock $ | |||||||||||
Treasury stock, at cost: | |||||||||||
Additional paid-in capital | |||||||||||
Accumulated other comprehensive income | |||||||||||
Accumulated deficit | ( | ( | |||||||||
Total T Stamp Inc. Stockholders’ Equity | |||||||||||
Non-controlling interest | |||||||||||
Total Stockholders’ Equity | |||||||||||
Total Liabilities and Stockholders’ Equity | $ | $ |
For the three months ended March 31, | ||||||||||||||
2024 | 2023 | |||||||||||||
Net revenue | $ | $ | ||||||||||||
Operating Expenses: | ||||||||||||||
Cost of services (exclusive of depreciation and amortization shown separately below) | ||||||||||||||
Research and development | ||||||||||||||
Selling, general, and administrative | ||||||||||||||
Depreciation and amortization | ||||||||||||||
Total Operating Expenses | ||||||||||||||
Operating Loss | ( | ( | ||||||||||||
Non-Operating Income (Expense): | ||||||||||||||
Interest expense, net | ( | ( | ||||||||||||
Change in fair value of warrant liability | ( | |||||||||||||
Other income | ||||||||||||||
Other expense | ( | ( | ||||||||||||
Total Other Income (Expense), Net | ||||||||||||||
Net Loss before Taxes | ( | ( | ||||||||||||
Income tax expense | ||||||||||||||
Net loss before non-controlling interest | ( | ( | ||||||||||||
Net loss attributable to non-controlling interest | ||||||||||||||
Net loss attributable to T Stamp Inc. | $ | ( | $ | ( | ||||||||||
Basic and diluted net loss per share attributable to T Stamp Inc. | $ | ( | $ | ( | ||||||||||
Weighted-average shares used to compute basic and diluted net loss per share |
For the three months ended March 31, | ||||||||||||||
2024 | 2023 | |||||||||||||
Net loss including non-controlling interest | $ | ( | $ | ( | ||||||||||
Other Comprehensive Income (Loss): | ||||||||||||||
Foreign currency translation adjustments | ( | |||||||||||||
Total Other Comprehensive Income (Loss) | ( | |||||||||||||
Comprehensive loss | ( | ( | ||||||||||||
Comprehensive loss attributable to non-controlling interest | ||||||||||||||
Comprehensive loss attributable to T Stamp Inc. | $ | ( | $ | ( |
Common Stock | Additional Paid-In Capital | Treasury Stock | Stockholders’ Notes Receivable | Accumulated Other Comprehensive Income | Accumulated Deficit | Non-controlling Interest | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, January 1, 2023 | $ | $ | $ | $ | ( | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||
Exercise of options to common stock | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock in relation to vested restricted stock units, to wholly owned subsidiary | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
Conversion of treasury stock in relation to vested restricted stock units | ( | ( | — | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||
Reverse stock split | ( | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Repayment of shareholders loan through in-kind services | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
Currency translation adjustment | — | — | — | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
Net loss attributable to T Stamp Inc. | — | — | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
Balance, March 31, 2023 | $ | $ | $ | $ | $ | $ | ( | $ | $ | ( |
Common Stock | Additional Paid-In Capital | Treasury Stock | Accumulated Other Comprehensive Income | Accumulated Deficit | Non-controlling Interest | Total | |||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, January 1, 2024 | $ | $ | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||
Exercise of warrants to common stock | ( | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock in relation to vested restricted stock units | ( | ( | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Currency translation adjustment | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Net loss attributable to T Stamp Inc. | — | — | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Balance, March 31, 2024 | $ | $ | $ | $ | $ | ( | $ | $ |
For the three months ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net loss attributable to T Stamp Inc. | $ | ( | $ | ( | |||||||
Net loss attributable to non-controlling interest | |||||||||||
Adjustments to reconcile net loss to cash flows used in operating activities: | |||||||||||
Depreciation and amortization | |||||||||||
Stock-based compensation | |||||||||||
Change in fair value of warrant liability | ( | ||||||||||
Repayment of shareholder loan through in-kind services | |||||||||||
Non-cash interest | |||||||||||
Non-cash lease expense | |||||||||||
Non-cash write off of mobile hardware | ( | ||||||||||
Loss on retirement of equipment | |||||||||||
Changes in assets and liabilities: | |||||||||||
Accounts receivable | |||||||||||
Related party receivables | |||||||||||
Prepaid expenses and other current assets | ( | ||||||||||
Deferred financing costs | ( | ||||||||||
Other assets | ( | ||||||||||
Accounts payable | ( | ||||||||||
Accrued expense | |||||||||||
Related party payables | |||||||||||
Deferred revenue | |||||||||||
Operating lease liabilities | ( | ( | |||||||||
Net cash flows from operating activities | ( | ( | |||||||||
Cash flows from investing activities: | |||||||||||
Capitalized internally developed software costs | ( | ( | |||||||||
Patent application costs | ( | ( | |||||||||
Purchases of property and equipment | ( | ||||||||||
Net cash flows from investing activities | ( | ( | |||||||||
Cash flows from financing activities: | |||||||||||
Proceeds from exercise of options to common stock | |||||||||||
Forfeited common stock shares to satisfy taxes | ( | ( | |||||||||
Principal payments on financial liabilities | ( | ||||||||||
Net cash flows from financing activities | $ | ( | $ | ( | |||||||
Effect of foreign currency translation on cash | ( | ||||||||||
Net change in cash and cash equivalents | ( | ( | |||||||||
Cash and cash equivalents, beginning of period | |||||||||||
Cash and cash equivalents, end of period | $ | $ | |||||||||
Supplemental disclosure of cash flow information: | |||||||||||
Cash paid during the period for interest | $ | $ | |||||||||
Supplemental disclosure of non-cash activities: | |||||||||||
Adjustment to operating lease right-of-use assets related to renewed leases | $ | $ | |||||||||
Adjustment to operating lease operating lease liabilities related to renewed leases | $ | $ | |||||||||
Adjustment to operating lease right-of-use assets related to terminated leases | $ | $ | |||||||||
Adjustment to operating lease liabilities related to terminated leases | $ | $ | |||||||||
Prepaid rent expense reclassified upon termination of leases | $ | $ |
For the three months ended March 31, | ||||||||||||||
2024 | 2023 | |||||||||||||
Professional services (over time) | $ | $ | ||||||||||||
License fees (over time) | ||||||||||||||
Total Revenue | $ | $ |
March 31, 2024 | December 31, 2023 | ||||||||||
Malta loan receipt 3 – June 3, 2022 | $ | $ | |||||||||
Malta loan receipt 2 – August 10, 2021 | |||||||||||
Malta loan receipt 1 – February 9, 2021 | |||||||||||
Interest added to principal | |||||||||||
Total principal outstanding | |||||||||||
Plus: accrued interest | |||||||||||
Total promissory notes payable | $ | $ |
Warrants ($) | |||||
Balance as of January 1, 2023 | $ | ||||
Additional warrants issued | |||||
Change in fair value | ( | ||||
Balance as of December 31, 2023 | $ | ||||
Additional warrants issued | |||||
Change in fair value | ( | ||||
Balance as of March 31, 2024 | $ |
Fair Value of Warrants | $ | ||||
Exercise price | $ | ||||
Risk free interest rate | |||||
Expected dividend yield | % | ||||
Expected volatility | |||||
Expected term |
Warrant Issuance Date | Strike Price | March 31, 2024 | December 31, 2023 | |||||||||||||||||
November 9, 2016 | $ | |||||||||||||||||||
January 23, 2020 | $ | |||||||||||||||||||
January 23, 2020 | $ | |||||||||||||||||||
April 18, 2023 | $ | |||||||||||||||||||
June 5, 2023 | $ | |||||||||||||||||||
December 21, 2023 | $ | |||||||||||||||||||
Total warrants outstanding |
March 31, 2024 | December 31, 2023 | ||||||||||
Prepaid operating expenses | $ | $ | |||||||||
Rent deposit | |||||||||||
Value added tax receivable | |||||||||||
Tax credit receivable (short-term) | |||||||||||
Miscellaneous receivable | |||||||||||
Prepaid expenses and other current assets | $ | $ |
Useful Lives | March 31, 2024 | December 31, 2023 | |||||||||||||||
Internally developed software | $ | $ | |||||||||||||||
Less: Accumulated depreciation | ( | ( | |||||||||||||||
Capitalized internal-use software, net | $ | $ |
Useful Lives | March 31, 2024 | December 31, 2023 | |||||||||||||||
Computer equipment | $ | $ | |||||||||||||||
Furniture and fixtures | |||||||||||||||||
Property and equipment, gross | |||||||||||||||||
Less: Accumulated depreciation | ( | ( | |||||||||||||||
Property and equipment, net | $ | $ |
March 31, 2024 | December 31, 2023 | ||||||||||
Compensation payable | $ | $ | |||||||||
Commission liability | |||||||||||
Accrued employee taxes | |||||||||||
Other accrued liabilities | |||||||||||
Accrued expenses | $ | $ |
Useful Lives | March 31, 2024 | December 31, 2023 | |||||||||||||||
Patent application costs | $ | $ | |||||||||||||||
Trade name and trademarks | |||||||||||||||||
Intangible assets, gross | |||||||||||||||||
Less: Accumulated amortization | ( | ( | |||||||||||||||
Intangible assets, net | $ | $ |
Years Ending December 31, | Amount | |||||||
2024 | ||||||||
2025 | ||||||||
2026 | ||||||||
2027 | ||||||||
Total future amortization | $ |
For the years ended March 31, | ||||||||||||||
2024 | 2023 | |||||||||||||
Numerator: | ||||||||||||||
Net loss attributable to common stockholders | $ | ( | $ | ( | ||||||||||
Denominator: | ||||||||||||||
Weighted average shares used in computing net loss per share attributable to common stockholders | ||||||||||||||
Net loss per share attributable to common stockholders | $ | ( | $ | ( |
As of March 31, | |||||||||||
2024 | 2023 | ||||||||||
Options, RSUs, and grants | |||||||||||
Warrants | |||||||||||
Total |
Options Outstanding | Weighted Average Exercise Price Per Share | Weighted Average Remaining Contractual Life (years) | Aggregate Intrinsic Value | ||||||||||||||||||||
Balance as of January 1, 2023 | $ | $ | |||||||||||||||||||||
Options granted | |||||||||||||||||||||||
Options exercised | ( | ||||||||||||||||||||||
Options canceled and forfeited | ( | ||||||||||||||||||||||
Balance as of December 31, 2023 | |||||||||||||||||||||||
Options granted | $ | ||||||||||||||||||||||
Options exercised | |||||||||||||||||||||||
Options canceled and forfeited | ( | ||||||||||||||||||||||
Balance as of March 31, 2024 | |||||||||||||||||||||||
Options vested and exercisable as of March 31, 2024 | $ |
Fair value of Class A Common Stock | $ | ||||
Exercise price | $ | ||||
Risk free interest rate | |||||
Expected dividend yield | % | ||||
Expected volatility | |||||
Expected term |
RSU Outstanding Number of Shares | |||||
Balance as of January 1, 2023 | |||||
Granted | |||||
Vested (issued) | ( | ||||
Forfeited | ( | ||||
Balance as of December 31, 2023 | |||||
Granted | |||||
Vested (issued) | ( | ||||
Forfeited | ( | ||||
Balance as of March 31, 2024 |
For the three months ended March 31, | ||||||||||||||
2024 | 2023 | |||||||||||||
Cost of services | $ | $ | ||||||||||||
Research and development | ||||||||||||||
Selling, general, and administrative | ||||||||||||||
Total stock-based compensation expense | $ | $ |
Lease term and discount rate | March 31, 2024 | |||||||
Weighted average remaining lease term | ||||||||
Weighted average discount rate | % |
March 31, 2024 | December 31, 2023 | ||||||||||
Operating lease right-of-use assets | |||||||||||
Operating lease right-of-use assets | $ | $ | |||||||||
Operating lease liabilities | |||||||||||
Short-term operating lease liabilities | $ | $ | |||||||||
Long-term operating lease liabilities | |||||||||||
Total operating lease liabilities | $ | $ |
Years Ending December 31, | Principal Payments | Imputed Interest Payments | Total Payments | |||||||||||||||||
2024 | $ | $ | $ | |||||||||||||||||
2025 | ||||||||||||||||||||
2026 | ||||||||||||||||||||
2027 | ||||||||||||||||||||
2028 | ||||||||||||||||||||
Total future maturities | $ | $ | $ |
For the three months ended March 31, | ||||||||||||||
2024 | 2023 | |||||||||||||
Operating lease expense – fixed payments | $ | $ | ||||||||||||
Short term lease expense | ||||||||||||||
Total lease expense | $ | $ |
For the three months ended March 31, | ||||||||||||||
2024 | 2023 | |||||||||||||
Cash paid for amounts included in the measurement of lease liabilities: | ||||||||||||||
Operating cash flows from operating leases | $ | ( | $ | ( |
For the three months ended March 31, | ||||||||||||||
2024 | 2023 | |||||||||||||
Net loss before taxes | $ | (2,678,569) | $ | (2,547,450) | ||||||||||
Add: Other expense | 6,336 | 743 | ||||||||||||
Less: Other income | (193,114) | (44,614) | ||||||||||||
Add: Interest expense, net | 18,549 | 10,231 | ||||||||||||
Add: Stock-based compensation | 297,886 | 59,574 | ||||||||||||
Add (Less): Change in fair value of warrant liability | (2,460) | 1,340 | ||||||||||||
Add: Non-cash expenses for in-kind services | — | 18,547 | ||||||||||||
Add: Depreciation and amortization | 184,801 | 219,181 | ||||||||||||
Adjusted EBITDA loss (non-GAAP) | $ | (2,366,571) | $ | (2,282,448) |
For the three months ended March 31, | ||||||||||||||
2024 | 2023 | |||||||||||||
Net revenue | $ | 573,676 | $ | 458,633 | ||||||||||
Operating Expenses: | ||||||||||||||
Cost of services (exclusive of depreciation and amortization shown separately below) | 294,598 | 216,958 | ||||||||||||
Research and development | 451,842 | 632,369 | ||||||||||||
Selling, general, and administrative | 2,491,693 | 1,969,875 | ||||||||||||
Depreciation and amortization | 184,801 | 219,181 | ||||||||||||
Total Operating Expenses | 3,422,934 | 3,038,383 | ||||||||||||
Operating Loss | (2,849,258) | (2,579,750) | ||||||||||||
Non-Operating Income (Expense): | ||||||||||||||
Interest expense, net | (18,549) | (10,231) | ||||||||||||
Change in fair value of warrant liability | 2,460 | (1,340) | ||||||||||||
Other income | 193,114 | 44,614 | ||||||||||||
Other expense | (6,336) | (743) | ||||||||||||
Total Other Income (Expense), Net | 170,689 | 32,300 | ||||||||||||
Net Loss before Taxes | (2,678,569) | (2,547,450) | ||||||||||||
Income tax expense | — | — | ||||||||||||
Net loss before non-controlling interest | (2,678,569) | (2,547,450) | ||||||||||||
Net loss attributable to non-controlling interest | — | — | ||||||||||||
Net loss attributable to T Stamp Inc. | $ | (2,678,569) | $ | (2,547,450) | ||||||||||
Basic and diluted net loss per share attributable to T Stamp Inc. | $ | (0.26) | $ | (0.50) | ||||||||||
Weighted-average shares used to compute basic and diluted net loss per share | 10,111,993 | 5,044,775 |
For the three months ended March 31, | |||||||||||||||||||||||
2024 | 2023 | $ Change | % Change | ||||||||||||||||||||
Net revenue | $ | 573,676 | $ | 458,633 | $ | 115,043 | 25.08 | % |
For the three months ended March 31, | |||||||||||||||||||||||
2024 | 2023 | $ Change | % Change | ||||||||||||||||||||
Cost of services | $ | 294,598 | $ | 216,958 | $ | 77,640 | 35.79 | % |
For the three months ended March 31, | |||||||||||||||||||||||
2024 | 2023 | $ Change | % Change | ||||||||||||||||||||
Research and development | $ | 451,842 | $ | 632,369 | $ | (180,527) | (28.55) | % |
For the three months ended March 31, | |||||||||||||||||||||||
2024 | 2023 | $ Change | % Change | ||||||||||||||||||||
Selling, general, and administrative | $ | 2,491,693 | $ | 1,969,875 | $ | 521,818 | 26.49 | % |
For the three months ended March 31, | |||||||||||||||||||||||
2024 | 2023 | $ Change | % Change | ||||||||||||||||||||
Depreciation and amortization | $ | 184,801 | $ | 219,181 | $ | (34,380) | (15.69) | % |
For the three months ended March 31, | |||||||||||||||||||||||
2024 | 2023 | $ Change | % Change | ||||||||||||||||||||
Operating loss | $ | (2,849,258) | $ | (2,579,750) | $ | (269,508) | 10.45 | % |
For the three months ended March 31, | |||||||||||||||||||||||
2024 | 2023 | $ Change | % Change | ||||||||||||||||||||
Interest expense, net | $ | (18,549) | $ | (10,231) | $ | (8,318) | 81.30 | % |
For the three months ended March 31, | |||||||||||||||||||||||
2024 | 2023 | $ Change | % Change | ||||||||||||||||||||
Change in fair value of warrant liability | $ | 2,460 | $ | (1,340) | $ | 3,800 | (283.58) | % |
For the three months ended March 31, | |||||||||||||||||||||||
2024 | 2023 | $ Change | % Change | ||||||||||||||||||||
Other income | $ | 193,114 | $ | 44,614 | $ | 148,500 | 332.86 | % |
For the three months ended March 31, | |||||||||||||||||||||||
2024 | 2023 | $ Change | % Change | ||||||||||||||||||||
Other expense | $ | (6,336) | $ | (743) | $ | (5,593) | 752.76 | % |
March 31, 2024 | March 31, 2024 (Pro Forma As Adjusted, Reflecting the Sale of 499,990 shares of Class A Common Stock, pre-funded warrants to purchase 1,500,010 shares of our Class A Common Stock, and warrants to purchase 3,600,000 shares of our Class A Common Stock) | ||||||||||||||||
Assets | |||||||||||||||||
Cash and cash equivalents | $ | 816,692 | $ | 2,532,172 | |||||||||||||
Total Current Liabilities | 2,783,926 | 2,783,926 | |||||||||||||||
Warrant liabilities | 254,076 | 254,076 | |||||||||||||||
Non-convertible notes payable, plus accrued interest | 946,395 | 946,395 | |||||||||||||||
Long-term operating lease liabilities | 84,288 | 84,288 | |||||||||||||||
Total Liabilities | 4,068,685 | 4,068,685 | |||||||||||||||
Stockholders’ Equity: | |||||||||||||||||
Common stock | 100,997 | 105,997 | |||||||||||||||
Additional paid-in capital | 54,641,448 | 56,351,928 | |||||||||||||||
Accumulated other comprehensive income | 171,361 | 171,361 | |||||||||||||||
Accumulated deficit | (53,531,854) | (53,531,854) | |||||||||||||||
Total T Stamp Inc. Stockholders’ Equity | 1,381,952 | 3,097,432 | |||||||||||||||
Non-controlling interest | 161,439 | 161,439 | |||||||||||||||
Total Stockholders’ Equity | 1,543,391 | 3,258,871 | |||||||||||||||
Total Liabilities and Stockholders’ Equity | $ | 5,612,076 | $ | 7,327,556 |
For the three months ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
Net cash flows from operating activities | $ | (2,157,635) | $ | (154,578) | |||||||
Net cash flows from investing activities | $ | (155,962) | $ | (191,231) | |||||||
Net cash flows from financing activities | $ | (22,497) | $ | (103,058) |
Exhibit No. | Exhibit Description | |||||||
3.1 | ||||||||
3.2 | ||||||||
4.1 | ||||||||
4.2 | ||||||||
4.3 | ||||||||
4.4 | ||||||||
4.5 | ||||||||
4.6 | ||||||||
4.7 | ||||||||
4.8 | ||||||||
4.9 | ||||||||
4.10 | ||||||||
4.11 | ||||||||
4.12 | ||||||||
4.13 | ||||||||
10.1 | ||||||||
10.2 | ||||||||
10.3 | ||||||||
10.4 | ||||||||
10.5 | ||||||||
10.6 | ||||||||
10.7 | ||||||||
10.8 | ||||||||
10.9 | ||||||||
10.10 | ||||||||
10.11 | ||||||||
10.12 | ||||||||
10.13 | ||||||||
10.14 | ||||||||
10.15 | ||||||||
10.16 | ||||||||
10.17 | ||||||||
10.18 | ||||||||
10.19 | ||||||||
10.20 | ||||||||
10.21 | ||||||||
10.22 | ||||||||
10.23 | ||||||||
10.24 | ||||||||
10.25 | ||||||||
31.1* | ||||||||
31.2* | ||||||||
32.1* | ||||||||
101.INS* | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |||||||
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T STAMP INC. | |||||
/s/ Gareth Genner | |||||
Gareth Genner, Chief Executive Officer | |||||
Trust Stamp |
/s/ Gareth Genner | |||||
Gareth Genner, Principal Executive Officer, Chief Executive Officer, Director | |||||
Date: May 15, 2024 | |||||
/s/ Alex Valdes | |||||
Alex Valdes, Principal Financial Officer, Principal Accounting Officer | |||||
Date: May 15, 2024 | |||||
/s/ Andrew Gowasack | |||||
Andrew Gowasack, President, Director | |||||
Date: May 15, 2024 | |||||
/s/ William McClintock | |||||
William McClintock, Director | |||||
Date: May 15, 2024 | |||||
/s/ Charles Potts | |||||
Charles Potts, Director | |||||
Date: May 15, 2024 | |||||
/s/ Joshua Allen | |||||
Joshua Allen, Director | |||||
Date: May 15, 2024 | |||||
/s/ Kristin Stafford | |||||
Kristin Stafford, Director | |||||
Date: May 15, 2024 | |||||
/s/ Berta Pappenheim | |||||
Berta Pappenheim, Director | |||||
Date: May 15, 2024 |
/s/ Gareth Genner | |||||
Gareth Genner | |||||
Chief Executive Officer (Principal Executive Officer) |
/s/ Alex Valdes | |||||
Alex Valdes | |||||
Chief Financial Officer | |||||
(Principal Financial Officer) |
/s/ Gareth Genner | |||||
Chief Executive Officer | |||||
(Principal Executive Officer) | |||||
/s/ Alex Valdes | |||||
Chief Financial Officer | |||||
(Principal Financial Officer) |
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) |
Mar. 31, 2024 |
Dec. 31, 2023 |
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Statement of Financial Position [Abstract] | ||
Unbilled receivables | $ 14,208 | $ 143,219 |
Non-convertible notes payable, current accrued interest | $ 14,511 | $ 40,317 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 50,000,000 | 50,000,000 |
Common stock, shares issued (in shares) | 10,099,672 | 9,198,089 |
Common stock, shares outstanding (in shares) | 10,099,672 | 9,143,355 |
Treasury stock, at cost, shares held (in shares) | 0 | 54,734 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) |
3 Months Ended | |
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Mar. 31, 2024 |
Mar. 31, 2023 |
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Statement of Comprehensive Income [Abstract] | ||
Net loss including non-controlling interest | $ (2,678,569) | $ (2,547,450) |
Other Comprehensive Income (Loss): | ||
Foreign currency translation adjustments | 31,691 | (41,442) |
Total Other Comprehensive Income (Loss) | 31,691 | (41,442) |
Comprehensive loss | (2,646,878) | (2,588,892) |
Comprehensive loss attributable to non-controlling interest | 0 | 0 |
Comprehensive loss attributable to T Stamp Inc. | $ (2,646,878) | $ (2,588,892) |
Description of Business, Summary of Significant Accounting Policies and Going Concern |
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Description of Business, Summary of Significant Accounting Policies and Going Concern | Description of Business, Summary of Significant Accounting Policies, and Going Concern Description of Business — T Stamp Inc. was incorporated on April 11, 2016 in the State of Delaware. T Stamp Inc. and its subsidiaries (“Trust Stamp”, “we”, “us”, “our” or the “Company”) develops and markets identity authentication software solutions for enterprise and government partners and peer-to-peer markets. Trust Stamp develops proprietary artificial intelligence-powered solutions, researching and leveraging machine learning, artificial intelligence, biometric science, cryptography, and data mining, to deliver insightful identity and trust predictions that identify and defend against fraudulent identity attacks, protect sensitive user information, and extend the reach of digital services through global accessibility. We utilize the power and agility of technologies such as GPU processing, edge-computing, neural networks, and large language models to process and protect data faster and more effectively than has ever previously been possible in order to deliver results at a disruptively low cost for usage across multiple industries, including: •Banking/FinTech •KYC/AML Compliance •Humanitarian and Development Services •Government and Law Enforcement, including Alternative to Detention programs •Cryptocurrency and Digital Assets •Biometrically Secured Email and Digital Communications •P2P Transactions, Social Media, and Sharing Economy •Real Estate, Travel, and Healthcare Reverse Split — On February 15, 2023 our Board of Directors approved and, as of February 20, 2023, the holders of a majority of our voting capital stock approved an amendment (the “Certificate of Amendment”) to the Company’s Amended and Restated Certificate of Incorporation and approved to effect a reverse split of our issued and outstanding shares of Class A Common Stock at a ratio of one share for every five shares currently held, rounded up to the nearest whole share – whereby every five (5) outstanding shares of Class A Common Stock was combined and became one (1) share of Class A Common Stock, rounding up to the nearest whole number of shares (the “Reverse Split”). All share and per share amounts have been updated to reflect the Reverse Split in these unaudited condensed consolidated financial statements. The Reverse Split was effective for trading on the market opening of Nasdaq on March 23, 2023. The Reverse Stock Split effective March 23, 2023, was ratified by the Company’s stockholders by written consent pursuant to a definitive proxy statement filed with the Securities and Exchange Commission on April 13, 2023. Written consent from the majority of stockholders was received as of May 13, 2023. Amended and Restated Certificate of Incorporation — On July 6, 2023, the Company received confirmation of the acceptance of its Third Amended and Restated Certificate of Incorporation (the "Third Restated Certificate") from the Secretary of State of Delaware. The Third Restated Certificate was approved by the Company’s stockholders by written consent pursuant to a definitive proxy statement filed with the Securities and Exchange Commission on April 13, 2023. Written consent from the majority of stockholders was received as of May 13, 2023. The Third Restated Certificate maintained the 50,000,000 authorized shares of Common Stock and eliminated the authorized Preferred Stock. The Third Restated Certificate also created a classified Board of Directors of the Company with three classes of directors who will stand for election in staggered years. Going Concern — The accompanying unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company is a business that has not yet generated profits, with a net loss in the three months ended March 31, 2024 of $2.68 million, negative net operating cash outflows of $2.16 million for the same period, working capital of $(0.36) million and an accumulated deficit of $53.53 million as of March 31, 2024. The Company’s ability to continue as a going concern in the next twelve months following the date the unaudited condensed consolidated financial statements were available to be issued is dependent upon its ability to produce revenues and/or obtain financing sufficient to meet current and future obligations and deploy such to produce profitable operating results. Management has evaluated these conditions and plans to generate revenue and raise capital as needed to satisfy the Company’s capital needs. While the negotiation of significant additional revenue is well advanced, it has not reached a stage that allows it to be factored into a going concern evaluation. In addition, although the Company has previously been successful in raising capital as needed and has already made plans to do so as well as restructuring expenses to meet the Company’s cash needs, no assurance can be given that the Company will be successful in its capital raising efforts. These factors, among others, raise substantial doubt about the ability of the Company to continue as a going concern for a reasonable period. On April 1, 2024, the Company entered into a Securities Purchase Agreement (the “SPA”) with the Selling Stockholder. On April 3, 2024 the transaction contemplated by the SPA occurred pursuant to the terms of the SPA, the Selling Stockholder agreed, at the closing of the SPA and upon the terms and subject to the conditions set forth in the SPA, to purchase from the Company 499,990 shares of Class A Common Stock, par value $0.01 of the Company, and pre-funded warrants to purchase 1,500,010 shares of Class A Common Stock of the Company at a purchase price of $0.968 per share (“Warrant A”) for a total purchase price of $1,936,000. The Company paid offering costs of $220,520 resulting in net proceeds of $1,715,480. Additionally, pursuant to the SPA, as additional consideration for the share and Warrant A purchase described above, the Company agreed to issue to the Selling Stockholder a stock purchase warrant for the purchase of 2,000,000 shares of the Company’s Class A Common Stock at an exercise price of $0.968 per share (“Warrant B”), and a stock purchase warrant for the purchase of 1,600,000 shares of the Company’s Class A Common Stock at an exercise price of $1.060 per share (“Warrant C”). Basis of Presentation — The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with US Generally Accepted Accounting Principles (“US GAAP”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”). The accompanying unaudited condensed consolidated financial statements have been prepared on a basis which assumes that the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. Basis of Consolidation — The accompanying unaudited condensed consolidated financial statements reflect the activity of the Company and its subsidiaries, Trusted Mail Inc. (“Trusted Mail”), Finnovation LLC (“Finnovation”), Trust Stamp Malta Limited (“Trust Stamp Malta”), AIID Payments Limited, Biometric Innovations Limited (“Biometrics”), Trust Stamp Rwanda Limited, Metapresence Limited, Trust Stamp Denmark ApS, Quantum Foundation, and Trust Stamp Nigeria Limited. All significant intercompany transactions and accounts have been eliminated. Further, we continue to consolidate Tstamp Incentive Holdings (“TSIH”) which we consider to be a variable interest entity. In the opinion of management, these financial statements reflect all adjustments necessary (which adjustments are of a normal and recurring nature) for the fair presentation of the Company's financial position as of March 31, 2024 and December 31, 2023, and the results of operations for the three months ended March 31, 2024 and 2023. The results of operations for the three months ended March 31, 2024 are not necessarily indicative of results expected for the full year. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been omitted pursuant to the rules and regulations of the SEC. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes to consolidated financial statements in the Company's Annual Report on Form 10-K for the year ended December 31, 2023. The accounting policies employed are substantially the same as those shown in note 1 of the notes to consolidated financial statements included therein. Variable Interest Entity — On April 9, 2019, management created a new entity, TSIH. Furthermore, on April 25, 2019, the Company issued 320,513 shares of Class A Common Stock to TSIH, for the purpose of providing a pool of shares of Class A Common Stock of the Company that the Company’s Board of Directors (the “Board”) could use for employee stock awards and were recorded initially as Treasury stock. Since establishing TSIH, 264,000 shares were transferred to various employees as a stock award that were earned and outstanding. On February 15, 2023, Trust Stamp issued 206,033 shares of Class A Common Stock to TSIH to be used to satisfy vested employee stock awards. As of March 31, 2024, no shares of Class A Common Stock are held by TSIH as all shares have been issued pursuant to employee Restricted Stock Units. The Company does not own any of the shares of Class A Common Stock of the Company held by TSIH. The Company considers this entity to be a variable interest entity (“VIE”) because it is thinly capitalized and holds no cash. Because the Company does not own shares in TSIH, management believes that this gives the Company a variable interest. Further, management of the Company also acts as management of TSIH and is the decision-maker as management grants shares held by TSIH to employees of the Company. As this VIE owns only shares in the Company and no other liabilities or assets, the Company is the primary beneficiary of TSIH and will consolidate the VIE. Major Customers and Concentration of Risks — Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of Cash and cash equivalents, and Accounts receivable. We maintain our Cash and cash equivalents with high-quality financial institutions, mainly in the United States; the composition of which are regularly monitored by us. The Federal Deposit Insurance Corporation covers $250,000 for substantially all depository accounts. The Company from time to time may have amounts on deposit in excess of the insured limits. As of March 31, 2024 and December 31, 2023, the Company had $318,923 and $2,620,765 in U.S. bank accounts, respectively, which exceeded these insured amounts. Management believes minimal credit risk exists with respect to these financial institutions and the Company has not experienced any losses on such amounts. For Accounts receivable, we are exposed to credit risk in the event of nonpayment by customers to the extent the amounts are recorded in the consolidated balance sheets. We extend different levels of credit and maintain reserves for potential credit losses based upon the expected collectability of Accounts receivable. We manage credit risk related to our customers by performing periodic evaluations of credit worthiness and applying other credit risk monitoring procedures. Three customers represented 91.01% or 40.51%, 37.58%, and 12.92% of the balance of total Accounts receivable as of March 31, 2024 and three customers represented 91.11% or 53.55%, 30.43%, and 7.13% of the balance of total Accounts receivable as of December 31, 2023. The Company seeks to mitigate its credit risk with respect to Accounts receivable by contracting with large commercial customers and government agencies, and regularly monitoring the aging of Accounts receivable balances. As of March 31, 2024 and December 31, 2023, the Company had not experienced any significant losses on its Accounts receivable. During the three months ended March 31, 2024, the Company sold to primarily three customers which made up approximately 94.63% of total Net revenue, and consisted of 58.08%, 27.38%, and 9.17% from an S&P 500 Bank, Mastercard and Triton, respectively. Additionally, during the three months ended March 31, 2023, the Company sold to primarily three customers which made up approximately 78.77% of total Net revenue, and consisted of 40.14%, 25.08%, and 13.55% from an S&P 500 Bank, Mastercard, and FIS, respectively. Property and Equipment, Net — Property and equipment, net is stated at cost less accumulated depreciation. Depreciation is recognized using the straight-line method over the estimated useful lives of the respective assets. Maintenance and repairs that do not improve or extend the useful lives of the assets are expensed when incurred, whereas additions and major improvements are capitalized. Upon sale or retirement of assets, the cost and related accumulated depreciation are derecognized from the consolidated balance sheet and any resulting gain or loss is recorded in the consolidated statements of operations in the period realized. Accounting for Impairment of Long-Lived Assets — Long-lived assets with finite lives include Property and equipment, net, Capitalized internal-use software, Operating lease right-of-use assets, and Intangible assets, net subject to amortization. The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. Recoverability of assets held and used is measured by comparison of the carrying amount of an asset or an asset group to estimated undiscounted future net cash flows expected to be generated by the asset or asset group. If the carrying amount of an asset exceeds these estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the assets exceeds the fair value of the asset or asset group. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. As of March 31, 2024, the Company determined that no long-lived assets with finite lives were impaired. As of December 31, 2023, the Company determined that $19 thousand of Capitalized internal-use software and $12 thousand of Intangible assets was impaired. The impaired Capitalized internal-use software was expensed to during the year ended December 31, 2023. Goodwill — Goodwill is accounted for in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 350, Intangibles—Goodwill and Other. The Company allocates the cost of an acquired business to the assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition. The excess of the purchase consideration transferred over the fair value of the net assets acquired, including other Intangible assets, net, is recorded as Goodwill. Goodwill is tested for impairment at the reporting unit level at least quarterly or more frequently when events or circumstances occur that indicate that it is more likely than not that an impairment has occurred. In assessing Goodwill for impairment, the Company first assesses qualitative factors to determine whether it is necessary to perform the quantitative goodwill impairment test. In the qualitative assessment, the Company considers factors including economic conditions, industry and market conditions and developments, overall financial performance and other relevant entity-specific events in determining whether it is more likely than not that the fair value of the reporting unit is less than the carrying amount. Should the Company conclude that it is more likely than not that the recorded Goodwill amounts have been impaired, the Company would perform the impairment test. Goodwill impairment exists when a reporting unit’s carrying value exceeds its fair value. Significant judgment is applied when Goodwill is assessed for impairment. There were no impairment charges to Goodwill as of March 31, 2024 and December 31, 2023. Remaining Performance Obligations — The Company’s arrangements with its customers often have terms that span over multiple years. However, the Company generally allows its customers to terminate contracts for convenience prior to the end of the stated term with less than twelve months’ notice. Revenue allocated to remaining performance obligations represents non-cancelable contracted revenue that has not yet been recognized, which includes deferred revenue and, in certain instances, amounts that will be invoiced. The Company has elected the practical expedient allowing the Company to not disclose remaining performance obligations for contracts with original terms of twelve months or less. Cancellable contracted revenue, which includes customer deposit liabilities, is not considered a remaining performance obligation. As of March 31, 2024 and December 31, 2023, the Company did not have any related performance obligations for contracts with terms exceeding twelve months. Disaggregation of Revenue
Recent Accounting Pronouncements Not Yet Adopted — In December 2023, the FASB issued ASU 2023-09, Income Taxes – Improvements to Income Tax Disclosures. ASU 2023-09 requires enhancements and further transparency to certain income tax disclosures, most notably the tax rate reconciliation and income taxes paid. This ASU is effective for fiscal years beginning after December 15, 2024 on a prospective basis and retrospective application is permitted. The Company is currently evaluating the impacts of the new standard but does not expect a material impact to its unaudited condensed consolidated financial statements or related disclosures. In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. The amendments in this ASU clarify that an entity should measure the fair value of an equity security subject to contractual sale restriction the same way it measures an identical equity security that is not subject to such a restriction. The FASB said the contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, should not affect its fair value. The ASU is effective for public entities for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. Early adoption is permitted. The Company does not expect this guidance to have a material impact to its unaudited condensed consolidated financial statements or related disclosures.
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Borrowings |
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Borrowings | Borrowings Promissory Notes Payable
In May 2020, the Company formed a subsidiary in the Republic of Malta, Trust Stamp Malta Limited, with the intent to establish a research and development center with the assistance of potential grants and loans from the Maltese government. As part of the creation of this entity, we entered into an agreement with the government of Malta for a potentially repayable advance of up to €800 thousand or $858 thousand to assist in covering the costs of 75% of the first 24 months of payroll costs for any employee who begins 36 months from the execution of the agreement on July 8, 2020. On February 9, 2021, the Company began receiving funds and as of March 31, 2024, the balance received was $864 thousand which includes changes in foreign currency rates. The Company will pay an annual interest rate of 2% over the European Central Banks (ECB) base rate as set on the beginning of the year in review. If the ECB rate is below negative 1%, the interest rate shall be fixed at 1%. The Company will repay a minimum of 10% of Trust Stamp Malta Limited’s pre-tax profits per annum capped at 15% of the amount due to the Corporation until the disbursed funds are repaid. At this time, Trust Stamp Malta Limited does not have any revenue-generating contracts and therefore, we do not believe any amounts shall be classified as current. The Malta loan interest rate increased from 4.5% for the three months ended March 31, 2023 to 6.5% for the three months ended March 31, 2024.
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Warrants |
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Warrants and Rights Note Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Warrants | Warrants Liability Classified Warrants The following table presents the change in the liability balance associated with the liability classified warrants, which are classified in Level 3 of the fair value hierarchy from January 1, 2023 to March 31, 2024:
As of March 31, 2024, the Company has issued a customer a warrant to purchase up to $1.00 million of capital stock in a future round of financing at a 20% discount of the lowest price paid by another investor. The warrant was issued on November 9, 2016. There is no vesting period, and the warrant expires on November 30, 2026. The Company evaluated the provisions of ASC 480, Distinguishing Liabilities from Equity, noting the warrant should be classified as a liability due to its settlement being for a variable number of shares and potentially for a class of shares not yet authorized. The warrant was determined to have a fair value of $250 thousand which was recorded as a Deferred contract acquisition asset and to a Warrant liability during the year ended December 31, 2016 and was amortized as a revenue discount prior to the current periods presented. The fair value of the warrant was estimated on the date of grant by estimating the warrant’s intrinsic value on issuance using the estimated fair value of the Company as a whole and has a balance of $250 thousand as of March 31, 2024. On December 16, 2016, the Company issued an investor warrant to purchase $50 thousand worth of shares of our Class A Common Stock. The warrants have no vesting period and expires on December 16, 2026. The warrant agreement states that the investor is entitled to the “number of shares of Common Stock with a Fair Market Value as of the Determination Date of $50,000”. The determination date is defined as the “date that is the earlier of (A) the conversion of the investor’s Note into the equity interests of the Company or (B) the maturity date of the Note.” The investor converted the referenced Note on June 30, 2020, therefore, defining the determination date. The number of shares to be purchased is settled as 6,418 shares as of June 30, 2020. The exercise price of the warrants is variable until the exercise date. The Company used a Black-Scholes-Merton pricing model to determine the fair value of the warrants and uses this model to assess the fair value of the warrant liability. As of March 31, 2024, the warrant liability is recorded at $4 thousand which is a $3 thousand decrease, recorded to Change in fair value of warrant liability, from the balance of $7 thousand as of December 31, 2023. The following assumptions were used to calculate the fair value of the warrant liability during the three months ended March 31, 2024:
Equity Classified Warrants
November 9, 2016 The Company has issued a customer a warrant to purchase 80,128 shares of Class A Common Stock with an exercise price of $3.12 per share. The warrant was issued on November 9, 2016. There is no vesting period, and the warrant expires on November 30, 2026. January 23, 2020 In January 2020, the Company issued REach®, a related party, a warrant to purchase 186,442 shares of the Company’s Class A Common Stock at an exercise of $8.00 per share in exchange for the cancellation of a $100 thousand SAFE issued on August 18, 2017 by the Company’s affiliate Trusted Mail Inc. with a value of $125 thousand. The warrants were issued on January 23, 2020. There is no vesting period, and the warrants expire on December 20, 2024. January 23, 2020 In January 2020, the Company issued SCV, a related party, a warrant to purchase 932,111 shares of the Company’s Class A Common Stock at a strike price of $8.00 per share in exchange for $300 thousand in cash and “Premium” sponsorship status with a credited value of $100 thousand per year for 3 years totaling $300 thousand. This “premium” sponsorship status provides the Company with certain benefits in marketing and networking, such as the Company being listed on the investor’s website, as well as providing the Company certain other promotional opportunities organized by the investor. The warrants were issued on January 23, 2020. There is no vesting period, and the warrants expire on December 20, 2024. On December 21, 2021, SCV executed a Notice of Exercise for certain of its warrants to purchase 407,512 shares of Class A Common Stock at an exercise price of $8.00 per share for a total purchase price of $3.26 million. The closing occurred on January 10, 2022 and resulted in total cash proceeds of $3.26 million to the Company for the warrant exercise. The warrants to purchase the remaining 524,599 shares of the Company’s Class A Common Stock remain outstanding as of March 31, 2024. April 18, 2023 On April 14, 2023, the Company entered into a securities purchase agreement (“SPA”) with Armistice Capital Master Fund Ltd. Pursuant to which the Company agreed to issue and sell to the investor (i) in a registered direct offering, 563,380 shares of Class A Common Stock, par value $0.01 per share of the Company at a price of $3.30 per share, and pre-funded warrants to purchase up to 1,009,950 shares of Class A Common Stock, at a price of $3.299 per prefunded warrant, at an exercise price of $0.001 per share of Class A Common Stock, and (ii) in a concurrent private placement, common stock purchase warrants, exercisable for an aggregate of up to 1,573,330 shares of Class A Common Stock, at an exercise price of $3.30 per share. On April 18, 2023, the Company sold 563,380 shares of Class A Common Stock to the institutional investor at a price of $3.30 per share for total proceeds $1,859,154. Additionally, on same date, the institutional investor purchased and exercised the 1,009,950 pre-funded warrants, for total proceeds to the Company of $3,332,835, resulting in an aggregate issuance by the Company of 1,573,330 shares of Class A Common Stock for net proceeds of $4,778,550 from the registered direct offering after deducting placement fee and legal expense of $363,439 and $50,000, respectively. On December 21, 2023, the Company entered into an Inducement Agreement with Armistice Capital Master Fund Ltd. Pursuant to the terms of the Inducement Agreement, the exercise price for the warrants to purchase the remaining 1,573,330 shares of Class A Common Stock of the Company was reduced to $1.34 for a total purchase price of $2,108,262. On December 21, 2023, the remaining 1,573,330 common stock purchase warrants to purchase shares of Class A Common Stock of the Company at a price of $1.34 per warrant were exercised for total proceeds of $2,108,262. As of December 31, 2023, the Company had received Notice to Exercise for 798,000 common stock purchase warrants resulting in an issuance by the Company of 798,000 shares of Class A Common Stock. Due to the beneficial ownership limitation provisions in the Inducement Agreement, as of December 31, 2023 the remaining 775,330 common stock purchase warrants exercised on December 21, 2023 were unissued and held in abeyance for benefit of the institutional investor until notice from the institutional investor that the shares may be issued in compliance with the beneficial ownership limitation. On February 7, 2023 and February 27, 2023, the Company issued 320,000 and 455,330 shares, respectively. All warrants related to this investment have been exercised and are no longer outstanding as of March 31, 2024. June 5, 2023 On June 1, 2023, the Company entered into a securities purchase agreement (“SPA”) with an Armistice Capital Master Fund Ltd. Pursuant to which the Company agreed to issue and sell to the investor (i) in a registered direct offering, 736,400 shares of Class A Common Stock, par value $0.01 per share of the Company at a price of $2.30 per share, and pre-funded warrants to purchase up to 543,300 shares of Class A Common Stock, at a price of $2.299 per prefunded warrant, at an exercise price of $0.001 per share of Class A Common Stock, and (ii) in a concurrent private placement, common stock purchase warrants, exercisable for an aggregate of up to 1,279,700 shares of Class A Common Stock, at an exercise price of $2.30 per share. On June 5, 2023, the Company sold 736,400 shares of Class A Common Stock to the institutional investor at a price of $2.30 per share for total proceeds of $1,693,720. Additionally, on same date, the institutional investor purchased the 543,300 pre-funded warrants at a price of $2.299 per prefunded warrant, for total proceeds to the Company of $1,249,047, resulting in an issuance by the Company of 736,400 shares of Class A Common Stock for net proceeds of $2,686,773 from the registered direct offering after deducting placement fee and legal expense of $205,994 and $50,000, respectively. On June 12, 2023, the institutional investor exercised 322,300 pre-funded warrants at a price of $0.001 per prefunded warrant, resulting in an issuance by the Company of 322,300 shares of Class A Common Stock for total proceeds of $322. Additionally, on June 23, 2023, the institutional investor exercised 221,000 pre-funded warrants at a price of $0.001 per prefunded warrant, resulting in an issuance by the Company of 221,000 shares of Class A Common Stock for total proceeds of $221. On December 21, 2023, the Company entered into an Inducement Agreement with Armistice Capital Master Fund Ltd. Pursuant to the terms of the Inducement Agreement, the exercise price for the common stock purchase warrants to purchase the remaining 1,279,700 shares of Class A Common Stock of the Company was reduced to $1.34 for a total purchase price of $1,714,798. On December 21, 2023, the institutional investor exercised 106,670 warrants to purchase shares of Class A Common Stock of the Company at a price of $1.34 per warrant for total proceeds of $142,938. As of December 31, 2023, due to the beneficial ownership limitation provisions in the Inducement Agreement, the 106,670 warrants were unissued and held in abeyance for benefit of the institutional investor until notice from the institutional investor that the shares may be issued in compliance with the beneficial ownership limitation. These shares were subsequently issued on February 27, 2023. The common stock purchase warrants to purchase 1,173,030 shares of the Company’s Class A Common Stock remain outstanding as of March 31, 2024. December 21, 2023 On December 21, 2023, the Company entered into a warrant exercise agreement (the “WEA”) with a certain existing institutional investor, pursuant to which the institutional investor agreed to exercise (the “Exercise”) (i) a portion (106,670) of the warrants issued to the institutional investor on June 5, 2023, which are exercisable for 1,279,700 shares of the Company’s Class A Common Stock, par value $0.01 per share (“Class A Common Stock”) with a current exercise price of $2.30 per share (the “June 2023 Warrants”), (ii) all of the warrants issued to the institutional investor on September 14, 2022, as amended on June 5, 2023, which are exercisable for 120,000 shares of Class A Common Stock, with a current exercise price of $2.30 per share (the “September 2022 Warrants”), and (iii) all of the warrants issued to the institutional investor on April 18, 2023, which are exercisable for 1,573,330 shares of Class A Common Stock, with a current exercise price of $3.30 per share (the “April 2023 Warrants” and collectively with all of the June 2023 Warrants and the September 2022 Warrants, the “Existing Warrants”). In consideration for the immediate exercise of 1,800,000 of the Existing Warrants for cash, the Company agreed to reduce the exercise price of all of the Existing Warrants, including any unexercised portion thereof, to $1.34 per share, which is equal to the most recent closing price of the Company’s Class A Common Stock on The Nasdaq Stock Market prior to the execution of the WEA. As of March 31, 2024, Armistice had submitted an Exercise Notice for 918,000 Existing Warrants and the shares of Class A Common Stock were issued to the warrant holders. The remaining 882,000 Existing Warrants from this exercise are held in abeyance until the Company receives notice from the holders that the remaining shares may be issued in compliance with the beneficial ownership limitation. As of March 31, 2024, the remaining 882,000 Existing Warrants have been issued. In addition, in consideration for such Exercise, the Selling Stockholder received new unregistered warrants to purchase up to an aggregate of 3,600,000 shares of Class A Common Stock, equal to 200% of the shares of Class A Common Stock issued in connection with the Exercise, with an exercise price of $1.34 per share (the “New Warrants”) in a private placement pursuant to Section 4(a)(2) of the Securities Act of 1933 (the “Securities Act”). All 3,600,000 of the New Warrants remain outstanding as of March 31, 2024.
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Balance Sheet Components |
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Balance Sheet Components | Balance Sheet Components Prepaid expenses and other current assets Prepaid expenses and other current assets as of March 31, 2024 and December 31, 2023 consisted of the following:
Capitalized internal-use software, net Capitalized internal-use software, net as of as of March 31, 2024 and December 31, 2023 consisted of the following:
Amortization expense is recognized on a straight-line basis and for the three months ended March 31, 2024 and 2023 totaled $138 thousand and $141 thousand, respectively. Property and equipment, net Property and equipment, net as of as of March 31, 2024 and December 31, 2023 consisted of the following:
Depreciation expense is recognized on a straight-line basis and for the three months ended March 31, 2024 and 2023 totaled $10 thousand and $42 thousand, respectively. Accrued expenses Accrued expenses as of March 31, 2024 and December 31, 2023 consisted of the following:
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Goodwill and Intangible Assets, Net |
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Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets, Net | Goodwill and Intangible Assets, Net There were no changes in the carrying amount of Goodwill for the three months ended March 31, 2024 and 2023. Intangible assets, net as of March 31, 2024 and December 31, 2023 consisted of the following:
The Company added 3 new patents during the three months ended March 31, 2024. The patents issued during the three months ended March 31, 2024 increased our total number of patents to 20 and include: •On January 2, 2024, the Company received Notice of Issuance for a patent that is a continuation of “Systems and Processes for Lossy Biometric Representation.” This patent is a continuation addresses a long-felt but unresolved need for a system or process that can transform size-variant, personally-identifying biometric templates into fixed-size, privacy-secured representations, while maintaining sufficiently accurate biometric matching capabilities. •On January 30, 2024, the Company received Notice of Issuance for a patent that is a continuation of “Systems and Processes for Lossy Biometric Representation.” This technology provides a system or process that can transform size-variant, personally-identifying biometric templates into fixed-size, privacy-secured representations, while maintaining sufficiently accurate biometric matching capabilities. •On March 19, 2024, the Company received Notice of Issuance for a patent entitled “Systems and Methods for Enhanced Hash Transforms.” Conventional cryptographic hashing techniques generally include functions that generate unique signatures given a piece of data, accepting binary strings of characters as an input, and producing a string (e.g., a digital signature) as an output. Our new patent addresses the need for improved techniques for securely handling sensitive data. Intangible asset amortization expense is recognized on a straight-line basis and for the three months ended March 31, 2024 and 2023 totaled $37 thousand. Estimated future amortization expense of Intangible assets, net is as follows:
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Net Loss per Share Attributable to Common Stockholders |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Loss per Share Attributable to Common Stockholders | Net Loss per Share Attributable to Common Stockholders The following table presents the calculation of basic and diluted net loss per share:
The following potentially dilutive securities were excluded from the computation of diluted net loss per share calculations for the periods presented because the impact of including them would have been anti-dilutive:
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Stock Awards and Stock-Based Compensation |
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Share-Based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Awards and Stock-Based Compensation | Stock Awards and Stock-Based Compensation From time to time, the Company may issue stock awards in the form of Class A Common Stock grants, Restricted Stock Units (RSUs), or Class A Common Stock options with vesting/service terms. Stock awards are valued on the grant date using the Company’s common stock share price quoted on an active market. Stock options are valued using the Black-Scholes-Merton pricing model to determine the fair value of the options. We generally issue our awards in terms of a fixed monthly value, resulting in a variable number of shares being issued, or in terms of a fixed monthly share number. During the three months ended March 31, 2024 and 2023, the Company entered into agreements with advisory board members and other external advisors to issue cash payments and stock awards in exchange for services rendered to the Company monthly. The total granted stock-based awards to advisory board members and other external advisors during the three months ended March 31, 2024 and 2023 included grants totaling, $9 thousand and $0, respectively, options totaling $0, and RSUs totaling $1 thousand and $3 thousand, respectively. In addition to issuing stock awards to advisory board members and other external advisors, during the three months ended March 31, 2024 and 2023, the Company granted stock-based awards to multiple employees. The total granted stock-based awards to employees during the three months ended March 31, 2024 and 2023 included grants totaling, $12 thousand and $26 thousand, respectively, options totaling $2 thousand and $4 thousand, respectively, and RSUs totaling $274 thousand and $29 thousand, respectively. The following table summarizes stock option activity for the three months ended March 31, 2024 and 2023:
The aggregate intrinsic value of options outstanding, exercisable, and vested is calculated as the difference between the exercise price of the underlying options and the fair value of the Company’s common stock. The aggregate intrinsic value of options exercised during the three months ended March 31, 2024 and 2023 was $0. The weighted average grant-date fair value of options granted during the three months ended March 31, 2024 and 2023 was $0.61 and $2.00 per share, respectively. The total grant-date fair value of options that vested during the three months ended March 31, 2024 and 2023 was $2 thousand and $4 thousand, respectively. The following assumptions were used to calculate the fair value of options granted during the three months ended March 31, 2024:
As of March 31, 2024, the Company had 395,983 stock options outstanding of which all are fully vested options. As of March 31, 2024, the Company has 87,533 common stock grants outstanding of which 74,465 were vested but not issued and 13,068 were not yet vested. All granted and outstanding common stock grants will fully vest by March 31, 2025. The Company had unrecognized stock-based compensation related to common stock grants of $9 thousand as of March 31, 2024. As of March 31, 2024, the Company had 1,098,996 RSUs outstanding of which 281,866 were vested but not issued and 817,130 were not yet vested. All granted and outstanding RSUs will fully vest by January 2, 2025. The Company had unrecognized stock-based compensation related to RSUs of $866 thousand as of March 31, 2024. During the three months ended March 31, 2024 the Company issued 54,734 of Class A Common Stock to employees that were designated for employee stock awards and were previously recorded as treasury stock. A summary of outstanding RSU activity as of March 31, 2024 is as follows:
Stock-based compensation expense Our consolidated statements of operations include stock-based compensation expense as follows:
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Related Party Transactions |
3 Months Ended |
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Mar. 31, 2024 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Related party payables of $96 thousand and $82 thousand as of March 31, 2024 and December 31, 2023, respectively, primarily relate to amounts owed to 10Clouds, the Company’s contractor for software development and investor in the Company, and smaller amounts payable to members of management as expense reimbursements. Total costs incurred in relation to 10Clouds for the three months ended March 31, 2024 and 2023, totaled approximately $104 thousand and $294 thousand, respectively. Mutual Channel Agreement On November 15, 2020, the Company entered into a Mutual Channel Agreement with Vital4Data, Inc., a company at which one of our Directors serves as Chief Executive Officer. Pursuant to the agreement, the Company engaged Vita4Data, Inc. as a non-exclusive sales representative for the Company’s products and services. Vital4Data, Inc. is entitled to compensation in the form of commissions, receiving a 20% of commission-eligible on net revenue from sales generated by Vital4Data, Inc. in the first year of the contract term, which is reduced to 10% in the second year, and 5% in the third year. The Company has not earned or expensed any commissions pursuant to the Vital4Data, Inc. agreement to date. As of March 31, 2024 and December 31, 2023, the Vital4Data, Inc. commission due was $0.
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Malta Grant |
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Mar. 31, 2024 | |
Malta Grant | |
Malta Grant | Malta Grant During July 2020 the Company entered into an agreement with the Republic of Malta that would provide for a grant of up to €200 thousand or $251 thousand as reimbursement for operating expenses over the first twelve months following Trust Stamp Malta’s incorporation in the Republic of Malta. The Company must provide an initial capital amount of €50 thousand or $62 thousand, which is matched with a €50 thousand or $62 thousand grant. The remaining €150 thousand or $190 thousand are provided as reimbursement of operating expenses twelve months following incorporation. U.S. GAAP does not provide authoritative guidance regarding the receipt of economic benefits from government entities in return for compliance with certain conditions. Therefore, based on ASC 105-10-05-2, non-authoritative accounting guidance from other sources was considered by analogy in determining the appropriate accounting treatment, the Company elected to apply International Accounting Standards 20 – Accounting for Government Grants and Disclosure of Government Assistance and recognizes the expected reimbursements from the Republic of Malta as deferred income. As reimbursable operating expenses are incurred, a receivable is recognized (reflected within “Prepaid expenses and other current assets” in the consolidated balance sheets) and income is recognized in a similar systematic basis over the same periods in the consolidated statements of operations. During the three months ended March 31, 2024 and 2023, the Company incurred $0 in expenses that are reimbursable under the grant. As of March 31, 2024, all amounts provided for under this grant were received. On January 25, 2022, the Company entered into an additional agreement with the government of Malta for a grant of up to €100 thousand or $107 thousand, in terms of the ‘Investment Aid to produce the COVID-19 Relevant Product’ program, to support the proposed investment. The estimated value of the grant is €137 thousand or $146 thousand, at an aid intensity of 75% to cover eligible wage costs incurred after February 1, 2022 in relation to new employees engaged specifically for the implementation of the project. On September 22, 2022, the Company entered into an amendment agreement that enables the Company to submit eligible employee expenses for reimbursement by October 31, 2022. The grant was approved in January 2022, however, the request for payment was not approved and management abandoned the agreement. Hence, during the three months ended March 31, 2024 and 2023, the Company incurred $0, respectively, in expenses that are reimbursable under the grant. As of March 31, 2024, no amounts provided under this grant were received.
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Leases and Commitments |
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Leases and Commitments | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases and Commitments | Leases and Commitments Operating Leases — The Company leases office space in Atlanta, Georgia, which serves as its corporate headquarters, office space in Malta, which serves as its research and development facility, and vehicles in Malta that are considered operating lease arrangements under ASC 842 guidance. In addition. the Company contracts for month-to-month coworking arrangements in other office spaces in North Carolina, Denmark, Poland, and Rwanda to support its dispersed workforce. As of March 31, 2024, there were no minimum lease commitments related to month-to-month lease arrangements. Initial lease terms are determined at commencement date, the date the Company takes possession of the property, and the commencement date is used to calculate straight-line expense for operating leases. Certain leases contain renewal options for varying periods, which are at the Company’s sole discretion. For leases where the Company is reasonably certain to exercise a renewal option, such option periods have been included in the determination of the Company’s Operating lease right-of-use assets and Operating lease liabilities. The Company’s leases have remaining terms of 1 to 5 years. As the Company’s leases do not provide an implicit rate, the present value of future lease payments is determined using the Company’s incremental borrowing rate based on information available at the commencement date.
During the three months ended March 31, 2024, the Company did not terminate any operating leases. Balance sheet information related to leases as of as of March 31, 2024 and December 31, 2023 was as follows:
Future maturities of ASC 842 lease liabilities as of March 31, 2024 are as follows:
Total lease expense, under ASC 842, was included in Selling, general, and administrative expenses in our consolidated statement of operations for the three months ended March 31, 2024 and 2023 as follows:
Supplemental cash flows information related to leases was as follow:
During the three months ended March 31, 2024, the Company did not incur variable lease expense. Financial Liability Obligation — The Company’s financial liability totaled $0 and $162 thousand as of March 31, 2024 and December 31, 2023, respectively, for an executed agreement with a telecommunications company for acquiring mobile hardware. On March 3, 2023, the Company provided a 30-day termination notice to the telecommunications company which terminates the mobile hardware data service. Under the contract terms with the telecommunications company, upon termination of the data service the Company must pay the remaining financial liability during the final data service billing period. The remaining financial liability was resolved with a settlement and no further payment is due as of March 31, 2024. Litigation — The Company is not currently involved with and does not know of any pending or threatening litigation against the Company or any of its officers or directors in connection with its business.
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Subsequent Events |
3 Months Ended |
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Mar. 31, 2024 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Securities and Purchase Agreement — On April 1, 2024, the Company entered into a Securities Purchase Agreement (the “SPA”) with the Selling Stockholder. On April 3, 2024 the transaction contemplated by the SPA occurred pursuant to the terms of the SPA, the Selling Stockholder agreed, at the closing of the SPA and upon the terms and subject to the conditions set forth in the SPA, to purchase from the Company 499,990 shares of Class A Common Stock, par value $0.01 of the Company, and pre-funded warrants to purchase 1,500,010 shares of Class A Common Stock of the Company at a purchase price of $0.968 per share (“Warrant A”) for a total purchase price of $1,936,000. The Company paid offering costs of $220,520 resulting in net proceeds of $1,715,480. Additionally, pursuant to the SPA, as additional consideration for the share and Warrant A purchase described above, the Company agreed to issue to the Selling Stockholder a stock purchase warrant for the purchase of 2,000,000 shares of the Company’s Class A Common Stock at an exercise price of $0.968 per share (“Warrant B”), and a stock purchase warrant for the purchase of 1,600,000 shares of the Company’s Class A Common Stock at an exercise price of $1.06 per share (“Warrant C”).
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Description of Business, Summary of Significant Accounting Policies and Going Concern (Policies) |
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Description of Business | Description of Business — T Stamp Inc. was incorporated on April 11, 2016 in the State of Delaware. T Stamp Inc. and its subsidiaries (“Trust Stamp”, “we”, “us”, “our” or the “Company”) develops and markets identity authentication software solutions for enterprise and government partners and peer-to-peer markets. Trust Stamp develops proprietary artificial intelligence-powered solutions, researching and leveraging machine learning, artificial intelligence, biometric science, cryptography, and data mining, to deliver insightful identity and trust predictions that identify and defend against fraudulent identity attacks, protect sensitive user information, and extend the reach of digital services through global accessibility. We utilize the power and agility of technologies such as GPU processing, edge-computing, neural networks, and large language models to process and protect data faster and more effectively than has ever previously been possible in order to deliver results at a disruptively low cost for usage across multiple industries, including: •Banking/FinTech •KYC/AML Compliance •Humanitarian and Development Services •Government and Law Enforcement, including Alternative to Detention programs •Cryptocurrency and Digital Assets •Biometrically Secured Email and Digital Communications •P2P Transactions, Social Media, and Sharing Economy •Real Estate, Travel, and Healthcare
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Reverse Split | Reverse Split — On February 15, 2023 our Board of Directors approved and, as of February 20, 2023, the holders of a majority of our voting capital stock approved an amendment (the “Certificate of Amendment”) to the Company’s Amended and Restated Certificate of Incorporation and approved to effect a reverse split of our issued and outstanding shares of Class A Common Stock at a ratio of one share for every five shares currently held, rounded up to the nearest whole share – whereby every five (5) outstanding shares of Class A Common Stock was combined and became one (1) share of Class A Common Stock, rounding up to the nearest whole number of shares (the “Reverse Split”). All share and per share amounts have been updated to reflect the Reverse Split in these unaudited condensed consolidated financial statements. The Reverse Split was effective for trading on the market opening of Nasdaq on March 23, 2023. The Reverse Stock Split effective March 23, 2023, was ratified by the Company’s stockholders by written consent pursuant to a definitive proxy statement filed with the Securities and Exchange Commission on April 13, 2023. Written consent from the majority of stockholders was received as of May 13, 2023.
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Going Concern | Going Concern — The accompanying unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company is a business that has not yet generated profits, with a net loss in the three months ended March 31, 2024 of $2.68 million, negative net operating cash outflows of $2.16 million for the same period, working capital of $(0.36) million and an accumulated deficit of $53.53 million as of March 31, 2024. The Company’s ability to continue as a going concern in the next twelve months following the date the unaudited condensed consolidated financial statements were available to be issued is dependent upon its ability to produce revenues and/or obtain financing sufficient to meet current and future obligations and deploy such to produce profitable operating results. Management has evaluated these conditions and plans to generate revenue and raise capital as needed to satisfy the Company’s capital needs. While the negotiation of significant additional revenue is well advanced, it has not reached a stage that allows it to be factored into a going concern evaluation. In addition, although the Company has previously been successful in raising capital as needed and has already made plans to do so as well as restructuring expenses to meet the Company’s cash needs, no assurance can be given that the Company will be successful in its capital raising efforts. These factors, among others, raise substantial doubt about the ability of the Company to continue as a going concern for a reasonable period. On April 1, 2024, the Company entered into a Securities Purchase Agreement (the “SPA”) with the Selling Stockholder. On April 3, 2024 the transaction contemplated by the SPA occurred pursuant to the terms of the SPA, the Selling Stockholder agreed, at the closing of the SPA and upon the terms and subject to the conditions set forth in the SPA, to purchase from the Company 499,990 shares of Class A Common Stock, par value $0.01 of the Company, and pre-funded warrants to purchase 1,500,010 shares of Class A Common Stock of the Company at a purchase price of $0.968 per share (“Warrant A”) for a total purchase price of $1,936,000. The Company paid offering costs of $220,520 resulting in net proceeds of $1,715,480. Additionally, pursuant to the SPA, as additional consideration for the share and Warrant A purchase described above, the Company agreed to issue to the Selling Stockholder a stock purchase warrant for the purchase of 2,000,000 shares of the Company’s Class A Common Stock at an exercise price of $0.968 per share (“Warrant B”), and a stock purchase warrant for the purchase of 1,600,000 shares of the Company’s Class A Common Stock at an exercise price of $1.060 per share (“Warrant C”).
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Basis of Presentation | Basis of Presentation — The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with US Generally Accepted Accounting Principles (“US GAAP”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”). The accompanying unaudited condensed consolidated financial statements have been prepared on a basis which assumes that the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business.
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Basis of Consolidation | Basis of Consolidation — The accompanying unaudited condensed consolidated financial statements reflect the activity of the Company and its subsidiaries, Trusted Mail Inc. (“Trusted Mail”), Finnovation LLC (“Finnovation”), Trust Stamp Malta Limited (“Trust Stamp Malta”), AIID Payments Limited, Biometric Innovations Limited (“Biometrics”), Trust Stamp Rwanda Limited, Metapresence Limited, Trust Stamp Denmark ApS, Quantum Foundation, and Trust Stamp Nigeria Limited. All significant intercompany transactions and accounts have been eliminated. Further, we continue to consolidate Tstamp Incentive Holdings (“TSIH”) which we consider to be a variable interest entity. In the opinion of management, these financial statements reflect all adjustments necessary (which adjustments are of a normal and recurring nature) for the fair presentation of the Company's financial position as of March 31, 2024 and December 31, 2023, and the results of operations for the three months ended March 31, 2024 and 2023. The results of operations for the three months ended March 31, 2024 are not necessarily indicative of results expected for the full year. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been omitted pursuant to the rules and regulations of the SEC. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes to consolidated financial statements in the Company's Annual Report on Form 10-K for the year ended December 31, 2023. The accounting policies employed are substantially the same as those shown in note 1 of the notes to consolidated financial statements included therein.
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Variable Interest Entity | Variable Interest Entity — On April 9, 2019, management created a new entity, TSIH. Furthermore, on April 25, 2019, the Company issued 320,513 shares of Class A Common Stock to TSIH, for the purpose of providing a pool of shares of Class A Common Stock of the Company that the Company’s Board of Directors (the “Board”) could use for employee stock awards and were recorded initially as Treasury stock. Since establishing TSIH, 264,000 shares were transferred to various employees as a stock award that were earned and outstanding. On February 15, 2023, Trust Stamp issued 206,033 shares of Class A Common Stock to TSIH to be used to satisfy vested employee stock awards. As of March 31, 2024, no shares of Class A Common Stock are held by TSIH as all shares have been issued pursuant to employee Restricted Stock Units. The Company does not own any of the shares of Class A Common Stock of the Company held by TSIH. The Company considers this entity to be a variable interest entity (“VIE”) because it is thinly capitalized and holds no cash. Because the Company does not own shares in TSIH, management believes that this gives the Company a variable interest. Further, management of the Company also acts as management of TSIH and is the decision-maker as management grants shares held by TSIH to employees of the Company. As this VIE owns only shares in the Company and no other liabilities or assets, the Company is the primary beneficiary of TSIH and will consolidate the VIE.
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Major Customers and Concentration of Risks | Major Customers and Concentration of Risks — Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of Cash and cash equivalents, and Accounts receivable. We maintain our Cash and cash equivalents with high-quality financial institutions, mainly in the United States; the composition of which are regularly monitored by us. The Federal Deposit Insurance Corporation covers $250,000 for substantially all depository accounts. The Company from time to time may have amounts on deposit in excess of the insured limits. As of March 31, 2024 and December 31, 2023, the Company had $318,923 and $2,620,765 in U.S. bank accounts, respectively, which exceeded these insured amounts. Management believes minimal credit risk exists with respect to these financial institutions and the Company has not experienced any losses on such amounts. For Accounts receivable, we are exposed to credit risk in the event of nonpayment by customers to the extent the amounts are recorded in the consolidated balance sheets. We extend different levels of credit and maintain reserves for potential credit losses based upon the expected collectability of Accounts receivable. We manage credit risk related to our customers by performing periodic evaluations of credit worthiness and applying other credit risk monitoring procedures. Three customers represented 91.01% or 40.51%, 37.58%, and 12.92% of the balance of total Accounts receivable as of March 31, 2024 and three customers represented 91.11% or 53.55%, 30.43%, and 7.13% of the balance of total Accounts receivable as of December 31, 2023. The Company seeks to mitigate its credit risk with respect to Accounts receivable by contracting with large commercial customers and government agencies, and regularly monitoring the aging of Accounts receivable balances. As of March 31, 2024 and December 31, 2023, the Company had not experienced any significant losses on its Accounts receivable. During the three months ended March 31, 2024, the Company sold to primarily three customers which made up approximately 94.63% of total Net revenue, and consisted of 58.08%, 27.38%, and 9.17% from an S&P 500 Bank, Mastercard and Triton, respectively. Additionally, during the three months ended March 31, 2023, the Company sold to primarily three customers which made up approximately 78.77% of total Net revenue, and consisted of 40.14%, 25.08%, and 13.55% from an S&P 500 Bank, Mastercard, and FIS, respectively.
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Property and Equipment, Net | Property and Equipment, Net — Property and equipment, net is stated at cost less accumulated depreciation. Depreciation is recognized using the straight-line method over the estimated useful lives of the respective assets. Maintenance and repairs that do not improve or extend the useful lives of the assets are expensed when incurred, whereas additions and major improvements are capitalized. Upon sale or retirement of assets, the cost and related accumulated depreciation are derecognized from the consolidated balance sheet and any resulting gain or loss is recorded in the consolidated statements of operations in the period realized.
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Accounting for Impairment of Long-Lived Assets | Accounting for Impairment of Long-Lived Assets — Long-lived assets with finite lives include Property and equipment, net, Capitalized internal-use software, Operating lease right-of-use assets, and Intangible assets, net subject to amortization. The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. Recoverability of assets held and used is measured by comparison of the carrying amount of an asset or an asset group to estimated undiscounted future net cash flows expected to be generated by the asset or asset group. If the carrying amount of an asset exceeds these estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the assets exceeds the fair value of the asset or asset group. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. As of March 31, 2024, the Company determined that no long-lived assets with finite lives were impaired. As of December 31, 2023, the Company determined that $19 thousand of Capitalized internal-use software and $12 thousand of Intangible assets was impaired. The impaired Capitalized internal-use software was expensed to during the year ended December 31, 2023.
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Goodwill | Goodwill — Goodwill is accounted for in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 350, Intangibles—Goodwill and Other. The Company allocates the cost of an acquired business to the assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition. The excess of the purchase consideration transferred over the fair value of the net assets acquired, including other Intangible assets, net, is recorded as Goodwill. Goodwill is tested for impairment at the reporting unit level at least quarterly or more frequently when events or circumstances occur that indicate that it is more likely than not that an impairment has occurred. In assessing Goodwill for impairment, the Company first assesses qualitative factors to determine whether it is necessary to perform the quantitative goodwill impairment test. In the qualitative assessment, the Company considers factors including economic conditions, industry and market conditions and developments, overall financial performance and other relevant entity-specific events in determining whether it is more likely than not that the fair value of the reporting unit is less than the carrying amount. Should the Company conclude that it is more likely than not that the recorded Goodwill amounts have been impaired, the Company would perform the impairment test. Goodwill impairment exists when a reporting unit’s carrying value exceeds its fair value. Significant judgment is applied when Goodwill is assessed for impairment. There were no impairment charges to Goodwill as of March 31, 2024 and December 31, 2023.
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Remaining Performance Obligations | Remaining Performance Obligations — The Company’s arrangements with its customers often have terms that span over multiple years. However, the Company generally allows its customers to terminate contracts for convenience prior to the end of the stated term with less than twelve months’ notice. Revenue allocated to remaining performance obligations represents non-cancelable contracted revenue that has not yet been recognized, which includes deferred revenue and, in certain instances, amounts that will be invoiced. The Company has elected the practical expedient allowing the Company to not disclose remaining performance obligations for contracts with original terms of twelve months or less. Cancellable contracted revenue, which includes customer deposit liabilities, is not considered a remaining performance obligation. As of March 31, 2024 and December 31, 2023, the Company did not have any related performance obligations for contracts with terms exceeding twelve months. Disaggregation of Revenue
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Recent Accounting Pronouncements Not Yet Adopted | Recent Accounting Pronouncements Not Yet Adopted — In December 2023, the FASB issued ASU 2023-09, Income Taxes – Improvements to Income Tax Disclosures. ASU 2023-09 requires enhancements and further transparency to certain income tax disclosures, most notably the tax rate reconciliation and income taxes paid. This ASU is effective for fiscal years beginning after December 15, 2024 on a prospective basis and retrospective application is permitted. The Company is currently evaluating the impacts of the new standard but does not expect a material impact to its unaudited condensed consolidated financial statements or related disclosures. In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. The amendments in this ASU clarify that an entity should measure the fair value of an equity security subject to contractual sale restriction the same way it measures an identical equity security that is not subject to such a restriction. The FASB said the contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, should not affect its fair value. The ASU is effective for public entities for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. Early adoption is permitted. The Company does not expect this guidance to have a material impact to its unaudited condensed consolidated financial statements or related disclosures.
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Description of Business, Summary of Significant Accounting Policies and Going Concern (Tables) |
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Disaggregation of Revenue | Disaggregation of Revenue
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Borrowings (Tables) |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Non-Convertible Promissory Notes Payable |
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Warrants (Tables) |
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Warrants and Rights Note Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Changes in Warrant Liability | The following table presents the change in the liability balance associated with the liability classified warrants, which are classified in Level 3 of the fair value hierarchy from January 1, 2023 to March 31, 2024:
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Schedule of Fair Value of Warrants Liabilities | The following assumptions were used to calculate the fair value of the warrant liability during the three months ended March 31, 2024:
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Schedule of Warrant Issuance Date |
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Balance Sheet Components (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance Sheet Components | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets as of March 31, 2024 and December 31, 2023 consisted of the following:
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Schedule of Capitalized Internal-Use Software, Net | Capitalized internal-use software, net as of as of March 31, 2024 and December 31, 2023 consisted of the following:
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Schedule of Property and Equipment, Net | Property and equipment, net as of as of March 31, 2024 and December 31, 2023 consisted of the following:
|
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Schedule of Accrued Expenses | Accrued expenses as of March 31, 2024 and December 31, 2023 consisted of the following:
|
Goodwill and Intangible Assets, Net (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Intangible Assets, Net | Intangible assets, net as of March 31, 2024 and December 31, 2023 consisted of the following:
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Schedule of Estimated Future Amortization Expense of Intangible Assets, Net | Estimated future amortization expense of Intangible assets, net is as follows:
|
Net Loss per Share Attributable to Common Stockholders (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Basic and Diluted Loss Per Share Attributable to Common Stockholders | The following table presents the calculation of basic and diluted net loss per share:
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Schedule of Anti-Dilutive Securities Excluded From Computation of Diluted Net Loss Per Share | The following potentially dilutive securities were excluded from the computation of diluted net loss per share calculations for the periods presented because the impact of including them would have been anti-dilutive:
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Stock Awards and Stock-Based Compensation (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Stock Options Activity | The following table summarizes stock option activity for the three months ended March 31, 2024 and 2023:
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Schedule of Stock Options Valuation Assumptions | The following assumptions were used to calculate the fair value of options granted during the three months ended March 31, 2024:
|
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Schedule of Outstanding RSU Activity | A summary of outstanding RSU activity as of March 31, 2024 is as follows:
|
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Schedule of Stock-Based Compensation Expense | Our consolidated statements of operations include stock-based compensation expense as follows:
|
Leases and Commitments (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases and Commitments | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Lease Term and Discount Rate |
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Summary of Balance Sheet Information Related to Leases | Balance sheet information related to leases as of as of March 31, 2024 and December 31, 2023 was as follows:
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Summary of Future Maturities of ASC 842 Lease Liabilities | Future maturities of ASC 842 lease liabilities as of March 31, 2024 are as follows:
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Summary of Total Lease Expense, Under ASC 842, was Included in Selling, General, and Administrative Expenses in Consolidated Statement of Operations | Total lease expense, under ASC 842, was included in Selling, general, and administrative expenses in our consolidated statement of operations for the three months ended March 31, 2024 and 2023 as follows:
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Summary of Supplemental Cash Flows Information Related to Leases | Supplemental cash flows information related to leases was as follow:
|
Description of Business, Summary of Significant Accounting Policies and Going Concern - Schedule of Disaggregation of Revenue (Details) - USD ($) |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Disaggregation of Revenue | ||
Total Revenue | $ 573,676 | $ 458,633 |
Professional services (over time) | ||
Disaggregation of Revenue | ||
Total Revenue | 487,426 | 383,633 |
License fees (over time) | ||
Disaggregation of Revenue | ||
Total Revenue | $ 86,250 | $ 75,000 |
Borrowings - Summary of Non-Convertible Promissory Notes Payable (Details) - Non-Convertible Promissory Notes Payable - USD ($) |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Borrowings | ||
Total principal outstanding | $ 931,884 | $ 913,560 |
Interest added to principal | 67,907 | 29,191 |
Plus: accrued interest | 14,511 | 40,317 |
Total promissory notes payable | 946,395 | 953,877 |
Malta loan receipt 3 | ||
Borrowings | ||
Total principal outstanding | 495,344 | 507,035 |
Malta loan receipt 2 | ||
Borrowings | ||
Total principal outstanding | 305,844 | 313,063 |
Malta loan receipt 1 | ||
Borrowings | ||
Total principal outstanding | $ 62,789 | $ 64,271 |
Warrants - Schedule of Changes in Warrant Liability (Details) - USD ($) |
3 Months Ended | 12 Months Ended |
---|---|---|
Mar. 31, 2024 |
Dec. 31, 2023 |
|
Change In Financial Instruments [Roll Forward] | ||
Balance, beginning of period | $ 256,536 | |
Balance, end of period | 254,076 | $ 256,536 |
Fair Value, Inputs, Level 3 | ||
Change In Financial Instruments [Roll Forward] | ||
Balance, beginning of period | 256,536 | 261,569 |
Additional warrants issued | 0 | 0 |
Change in fair value | (2,460) | (5,033) |
Balance, end of period | $ 254,076 | $ 256,536 |
Warrants - Schedule of Fair Value of Warrants Liabilities (Details) |
Mar. 31, 2024
$ / shares
yr
|
---|---|
Fair Value of Warrants | |
Warrants | |
Warrants measurement input | 0.64 |
Exercise price | |
Warrants | |
Warrants measurement input | 0.49 |
Risk free interest rate | |
Warrants | |
Warrants measurement input | 0.0438 |
Expected dividend yield | |
Warrants | |
Warrants measurement input | 0 |
Expected volatility | |
Warrants | |
Warrants measurement input | 0.7959 |
Expected term | |
Warrants | |
Warrants measurement input | yr | 3 |
Balance Sheet Components - Schedule of Prepaid Expenses and Other Current Assets (Details) - USD ($) |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Balance Sheet Components | ||
Prepaid operating expenses | $ 300,002 | $ 216,875 |
Rent deposit | 27,803 | 28,400 |
Value added tax receivable | 130,090 | 116,095 |
Tax credit receivable (short-term) | 66,135 | 102,151 |
Miscellaneous receivable | 371,996 | 363,260 |
Prepaid expenses and other current assets | $ 896,026 | $ 826,781 |
Balance Sheet Components - Schedule of Capitalized Internal-Use Software, Net (Details) - USD ($) |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Dec. 31, 2023 |
|
Balance Sheet Components | ||
Useful Lives | 5 years | |
Internally developed software | $ 4,043,786 | $ 3,901,801 |
Less: Accumulated depreciation | (2,567,593) | (2,429,427) |
Capitalized internal-use software, net | $ 1,476,193 | $ 1,472,374 |
Balance Sheet Components - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Balance Sheet Components | ||
Amortization of capitalized Internal-use Software | $ 138 | $ 141 |
Depreciation | $ 10 | $ 42 |
Balance Sheet Components - Schedule of Property and Equipment, Net (Details) - USD ($) |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Property and Equipment, Net | ||
Property and equipment, gross | $ 178,091 | $ 180,066 |
Less: Accumulated depreciation | (130,397) | (123,630) |
Property and equipment, net | 47,694 | 56,436 |
Computer equipment | ||
Property and Equipment, Net | ||
Property and equipment, gross | $ 150,686 | 152,014 |
Computer equipment | Minimum | ||
Property and Equipment, Net | ||
Useful Lives | 3 years | |
Computer equipment | Maximum | ||
Property and Equipment, Net | ||
Useful Lives | 4 years | |
Furniture and fixtures | ||
Property and Equipment, Net | ||
Useful Lives | 10 years | |
Property and equipment, gross | $ 27,405 | $ 28,052 |
Balance Sheet Components - Schedule of Accrued Expenses (Details) - USD ($) |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Balance Sheet Components | ||
Compensation payable | $ 447,306 | $ 377,403 |
Commission liability | 32,948 | 26,863 |
Accrued employee taxes | 769,653 | 624,525 |
Other accrued liabilities | 34,671 | 115,099 |
Accrued expenses | $ 1,284,578 | $ 1,143,890 |
Goodwill and Intangible Assets, Net - Schedule of Intangible Assets, Net (Details) - USD ($) |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Intangible assets | ||
Intangible assets, gross | $ 562,124 | $ 554,481 |
Less: Accumulated amortization | (366,080) | (330,791) |
Intangible assets, net | $ 196,044 | 223,690 |
Patent application costs | ||
Intangible assets | ||
Useful Lives | 3 years | |
Intangible assets, gross | $ 493,303 | 484,035 |
Trade name and trademarks | ||
Intangible assets | ||
Useful Lives | 3 years | |
Intangible assets, gross | $ 68,821 | $ 70,446 |
Goodwill and Intangible Assets, Net - Narrative (Details) $ in Thousands |
3 Months Ended | |||
---|---|---|---|---|
Mar. 19, 2024
trademark
|
Jan. 30, 2024
trademark
|
Jan. 02, 2024
trademark
|
Mar. 31, 2024
USD ($)
patent
|
|
Intangible assets | ||||
Number of intangible assets added | patent | 20 | |||
Amortization expense | $ | $ 37 | |||
Patent application costs | ||||
Intangible assets | ||||
Number of intangible assets added | 1 | 1 | 1 | 3 |
Goodwill and Intangible Assets, Net - Schedule of Estimated Future Amortization Expense of Intangible Assets, Net (Details) - USD ($) |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Estimated future amortization expense of intangible assets | ||
2024 | $ 86,105 | |
2025 | 78,133 | |
2026 | 31,659 | |
2027 | 147 | |
Total | $ 196,044 | $ 223,690 |
Net Loss per Share Attributable to Common Stockholders - Schedule of Basic and Diluted Loss Per Share Attributable to Common Stockholders (Details) - USD ($) |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Numerator: | ||
Net loss attributable to common stockholders | $ (2,678,569) | $ (2,547,450) |
Denominator: | ||
Weighted average shares used in computing net loss per share attributable to common stockholders, basic (in shares) | 10,111,993 | 5,044,775 |
Weighted average shares used in computing net loss per share attributable to common stockholders, diluted (in shares) | 10,111,993 | 5,044,775 |
Net loss per share attributable to common stockholders, basic (in dollars per share) | $ (0.26) | $ (0.50) |
Net loss per share attributable to common stockholders, diluted (in dollars per share) | $ (0.26) | $ (0.50) |
Net Loss per Share Attributable to Common Stockholders - Schedule of Dilutive Securities Excluded From Computation of Diluted Net Loss Per Share (Details) - USD ($) |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Net Loss per Share Attributable to Common Stockholders | ||
Total | $ 8,505,943 | $ 2,408,969 |
Options, RSUs, and grants | ||
Net Loss per Share Attributable to Common Stockholders | ||
Total | 1,582,512 | 735,001 |
Warrants | ||
Net Loss per Share Attributable to Common Stockholders | ||
Total | $ 6,923,431 | $ 1,673,968 |
Stock Awards and Stock-Based Compensation - Schedule of Stock Options Valuation Assumptions (Details) - Share-Based Payment Arrangement, Option |
3 Months Ended |
---|---|
Mar. 31, 2024
$ / shares
| |
Stock Awards and Stock-Based Compensation | |
Expected dividend yield | 0.00% |
Expected term | 3 years |
Minimum | |
Stock Awards and Stock-Based Compensation | |
Fair value of Class A Shares of Common Stock (in dollars per share) | $ 0.45 |
Exercise Price (in dollars per share) | $ 1.49 |
Risk free interest rate | 4.11% |
Expected volatility | 77.54% |
Maximum | |
Stock Awards and Stock-Based Compensation | |
Fair value of Class A Shares of Common Stock (in dollars per share) | $ 0.72 |
Exercise Price (in dollars per share) | $ 1.64 |
Risk free interest rate | 4.38% |
Expected volatility | 79.59% |
Stock Awards and Stock-Based Compensation - Schedule of Outstanding RSU Activity (Details) - Restricted Stock Units (RSUs) - shares |
3 Months Ended | 12 Months Ended |
---|---|---|
Mar. 31, 2024 |
Dec. 31, 2023 |
|
RSU Outstanding Number of Shares | ||
Balance at the beginning (in shares) | 446,102 | 292,564 |
Granted (in shares) | 802,893 | 410,516 |
Vested (issued) (in shares) | (122,604) | (159,776) |
Forfeited (in shares) | (27,395) | (97,202) |
Balance at the end (in shares) | 1,098,996 | 446,102 |
Stock Awards and Stock-Based Compensation - Schedule of Stock-Based Compensation Expense (Details) - USD ($) |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Stock Awards and Stock-Based Compensation | ||
Total stock-based compensation expense | $ 297,886 | $ 59,574 |
Cost of services | ||
Stock Awards and Stock-Based Compensation | ||
Total stock-based compensation expense | 262 | 494 |
Research and development | ||
Stock Awards and Stock-Based Compensation | ||
Total stock-based compensation expense | 8,116 | 18,855 |
Selling, general, and administrative | ||
Stock Awards and Stock-Based Compensation | ||
Total stock-based compensation expense | $ 289,508 | $ 40,225 |
Related Party Transactions (Details) - USD ($) |
3 Months Ended | |||
---|---|---|---|---|
Nov. 15, 2020 |
Mar. 31, 2024 |
Mar. 31, 2023 |
Dec. 31, 2023 |
|
Related Party Transactions | ||||
Related party receivables | $ 16,083 | $ 44,087 | ||
Related Party | ||||
Related Party Transactions | ||||
Related party receivables | 96,000 | 82,000 | ||
Related party cost | 104,000 | $ 294,000 | ||
Percentage of commission received, first year | 20.00% | |||
Percentage of commission received, second year | 10.00% | |||
Percentage of commission received, third year | 5.00% | |||
Payment of commission | $ 0 | $ 0 |
Malta Grant (Details) - Malta Grant Agreement € in Thousands |
3 Months Ended | |||||
---|---|---|---|---|---|---|
Jan. 25, 2022
EUR (€)
|
Mar. 31, 2024
USD ($)
|
Mar. 31, 2023
USD ($)
|
Jan. 25, 2022
USD ($)
|
Jul. 31, 2020
EUR (€)
|
Jul. 31, 2020
USD ($)
|
|
Malta Grant | ||||||
Maximum amount grant | € 100 | $ 107,000 | € 200 | $ 251,000 | ||
Requirement of initial capital amount | 50 | 62,000 | ||||
Reimbursement of grant for initial capital amount | 50 | 62,000 | ||||
Remaining reimbursement amount of grant for operating expenses incurred up to 12 Months from incorporation | € 150 | $ 190,000 | ||||
Expenses incurred for grant | $ 0 | $ 0 | ||||
Estimated amount of grant | € 137 | $ 146,000 | ||||
Percentage of aid intensity to cover eligible wage cost | 75.00% | |||||
Amounts received from grants | $ 0 |
Leases and Commitments - Narrative (Details) |
3 Months Ended | ||
---|---|---|---|
Mar. 03, 2023 |
Mar. 31, 2024
USD ($)
lease
|
Dec. 31, 2023
USD ($)
|
|
Leases and Commitments | |||
Minimum lease commitments related to month-to-month lease arrangements | $ 0 | ||
Number of leases terminated | lease | 0 | ||
Termination notice term | 30 days | ||
Short-term financial liabilities | $ 0 | $ 162,130 | |
Minimum | |||
Leases and Commitments | |||
Remaining lease term | 1 year | ||
Maximum | |||
Leases and Commitments | |||
Remaining lease term | 5 years |
Leases and Commitments - Summary of Lease Term and Discount Rate (Details) |
Mar. 31, 2024 |
---|---|
Leases and Commitments | |
Weighted average remaining lease term | 2 years 6 months 29 days |
Weighted average discount rate | 5.00% |
Leases and Commitments - Summary of Balance Sheet Information Related to Leases (Details) - USD ($) |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Balance sheet information related to leases | ||
Operating lease right-of-use assets | $ 184,642 | $ 164,740 |
Operating lease liabilities | ||
Short-term operating lease liabilities | 69,727 | 81,236 |
Long-term operating lease liabilities | 84,288 | 53,771 |
Total operating lease liabilities | $ 154,015 | $ 135,007 |
Leases and Commitments - Summary of Future Maturities of ASC 842 Lease Liabilities (Details) - USD ($) |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Principal Payments | ||
2024 | $ 57,391 | |
2025 | 57,386 | |
2026 | 22,455 | |
2027 | 8,556 | |
2028 | 8,227 | |
Total operating lease liabilities | 154,015 | $ 135,007 |
Imputed Interest Payments | ||
2024 | 4,444 | |
2025 | 3,170 | |
2026 | 1,137 | |
2027 | 607 | |
2028 | 172 | |
Total future maturities | 9,530 | |
Total Payments | ||
2024 | 61,835 | |
2025 | 60,556 | |
2026 | 23,592 | |
2027 | 9,163 | |
2028 | 8,399 | |
Total future maturities | $ 163,545 |
Leases and Commitments - Summary of Total Lease Expense, Under ASC 842, was Included in Selling, General, and Administrative Expenses in Consolidated Statement of Operations (Details) - USD ($) |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Total lease expense | ||
Operating lease expense – fixed payments | $ 39,877 | $ 83,034 |
Short term lease expense | 11,936 | 21,935 |
Total lease expense | 51,813 | 104,969 |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows from operating leases | $ (41,741) | $ (66,546) |
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