T Stamp Inc
For the period ended Dec 31, 2024. Filed Mar 31, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Mar 31, 2025
IDAI$2.26+3.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-04-01.
0001718939-24-000043
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-03-31.
0001718939-25-000080
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 118 previous paragraphs and 165 current paragraphs.
51 unchanged; 21 reworded; 92 added; 46 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 14 previous and 15 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (92)
Current report
Trust Stamp primarily develops proprietary artificial intelligence-powered solutions, researching and leveraging machine learning artificial intelligence, including computer vision, cryptography, and data mining, to process and protect data and deliver insightful outputs that identify and defend against fraud, protect sensitive user information, facilitate automated processes, 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 historically possible to deliver results at a disruptively low cost for usage across multiple industries.
Current report
Our team has substantial expertise in the creation and development of AI-enabled software products. We license our technology and expertise in numerous fields, with an increasing emphasis on addressing diverse markets through established partners who will integrate our technology into field-specific applications.
Current report
Over the last 12 months, while maintaining our strong emphasis on identity authentication for financial services, the Company has undertaken a multi-pronged process to position itself better to leverage the growing opportunities offered by the expanded capabilities, use, and acceptance of AI technologies. This process has included:
Current report
• Reducing the size of the non-production-focused executive and consulting teams to reduce overhead.
Current report
•Releasing sales staff that did not meet their targets.
Current report
•Negotiating a services contract to offset the cost of the technical team members while maintaining significant R&D and product development capabilities.
Current report
•Refocusing go-to-market strategies on joint ventures with proven industry partners with access to target markets
Current report
•Expanding our IP portfolio to strengthen our existing position related to presentation attack detection and tokenization and include implementations such as:
Current report
i. Embedded ownership verification for cryptographic assets, a technology that we believe to have significant potential with the expansion in the ownership of crypto-assets including potential deregulation (or loosening or clarification of regulation) in the United States together with the global growth of stable coins including Central Government Digital Currencies.
Current report
ii. A simple user interaction utility called “Shape Overlay” that augments biometric verification and combats deepfakes and injection attacks by having the user interact in real-time with their captured image.
Current report
iii. Stable Key (or “Stable IT 2”) which is an innovative technology that generates a “key” directly from the biometric of the user which key has a mathematical correlation to all of the user's passwords, PINS, and other “secrets” for every account and use case meaning that those secrets never need to be stored in their entirety.
Current report
iv. A patent for “Interoperable Biometric Representations” that potentially breaks vendor lock-in by allowing users of biometric technologies to compare like-modality templates from different sources.
Current report
•Strengthening our international 3rd party cybersecurity and data handling certifications by adding SOC2 certification to our NCSC Cyberessentials Plus certification and obtaining a renewed D-Seal certification (the world’s first certification that includes not just data security but also the ethical and responsible use of data).
Current report
•Opening an office in Tokyo (with funding from the City of Tokyo and the Japanese government) to pursue opportunities in the APAC region.
Current report
•Retaining an investment bank to explore strategic partnership and M&A opportunities across multiple sectors.
Current report
Equity Distribution Agreement with Maxim
Current report
On February 25, 2025, the Company entered into an Equity Distribution Agreement (the “Agreement”), with Maxim Group LLC (“Maxim”), pursuant to which the Company may offer and sell, from time to time, through Maxim, as sales agent or principal, shares of its common stock, $0.01 par value per share (the “Common Stock”).
Current report
Subject to the terms and conditions of the Agreement, Maxim will use commercially reasonable efforts consistent with its normal trading and sales practices, applicable state and federal law, rules and regulations and the rules of the Nasdaq Capital Market to sell shares of the Company’s Common Stock from time to time based upon the Company’s instructions, including any minimum price, time or size limits specified by the Company. Under the Agreement, Maxim may sell shares by any method deemed to be an “at the market” offering as defined in Rule 415 under the U.S. Securities Act of 1933, as amended (the “Securities Act”), or any other method permitted by law, including in privately negotiated transactions. Maxim’s obligations to sell shares under the Agreement are subject to satisfaction of certain conditions, including customary closing conditions for transactions of this nature. The Company will pay Maxim a commission of 3.0% of the aggregate gross proceeds from each sale of shares and has agreed to reimburse Maxim for certain specified expenses of up to $40,000, aggregate, in addition to up to $3,000 quarterly for the Maxim’s counsel’s fees and any incidental expenses to be reimbursed by us. We have agreed to provide indemnification and contribution to Maxim against certain civil liabilities, including liabilities under the Securities Act.
Current report
The Company is not obligated to make any sales of its Common Stock under the Agreement and no assurance can be given that the Company will sell any shares under the Agreement, or, if it does, as to the price or amount of shares that the Company will sell, or the dates on which any such sales will take place. The Agreement will terminate upon the earlier of (i) the sale of all shares having an aggregate offering price of $6,196,000 pursuant to the Agreement, (ii) twelve (12) months from the date of the Agreement, (iii) mutual termination by both Maxim and the Company upon the provision of fifteen (15) days written notice, and (iv) termination of the Agreement as otherwise permitted therein.
Current report
Sales of shares of Common Stock under the Agreement will be made pursuant to the Company’s effective registration statement on Form S-3 (Registration No. 333-271091) (the “Registration Statement”) which was declared effective April 12, 2023 and a related prospectus supplement which was filed with the U.S. Securities and Exchange Commission (the “SEC”) on February 25, 2025 (the “ATM Prospectus”). The ATM Prospectus relates to the offering of up to $6,196,000 worth of shares of the Company’s Common Stock from time to time. The issuance and sale, if any, of Common Stock under the Agreement is subject to the effectiveness of the Registration Statement and “baby shelf” limitations under General Instruction I.B.6. of Form S-3.
Current report
The foregoing summary of the Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Agreement, which was filed as Exhibit 1.1 to the Company's Current Report on Form 8-K filed with the SEC on February 26, 2025.
Current report
Appointment of New Chief Financial Officer
Current report
On January 17, 2025, the Board of Directors of the Company appointed Lance Wilson as the Company’s new Chief Financial Officer ("CFO"), to fill the vacancy in the position left after Alex Valdes’s resignation as Chief Financial Officer effective January 2, 2025.
Current report
Lance Wilson, a licensed Certified Public Accountant in Georgia, first joined the Company in 2021, serving in various financial capacities, most recently as the Senior Vice President of Accounting & Finance at Trust Stamp from July 2024 until being appointed to his role as CFO. Lance leads all external financial reporting, including SEC filings and technical accounting research and implementation. Lance has played a key role in multiple initiatives, including a successful public fundraising campaign that resulted in Trust Stamp’s NASDAQ listing in January 2022.
Current report
Prior to joining Trust Stamp, Lance served as the Financial Reporting Manager at Cousins Properties (NYSE: CUZ) from July 2020 to July 2021, where he managed all SEC filings, technical accounting projects, and audit engagements. Prior to that, he served in various accounting roles at The North Highland Company, Change Healthcare (formerly McKesson Technology Solutions), and BDO-USA, LLC. Lance holds a Master of Accountancy degree and a Bachelor of Science in Commerce and Business Administration from The University of Alabama.
Current report
Lance Wilson has no family relationships with any other director, executive officer, or person nominated or chosen by the Company to become a director or executive officer.
Current report
Lance Wilson and the Company entered into an Executive Employment Agreement (the “Agreement”), with an effective date of January 1, 2025, for his role as Chief Financial Officer (CFO) of the Company. The Agreement outlines Mr. Wilson’s ongoing responsibilities, including oversight of the Company’s financial integrity, regulatory compliance, and multicurrency financial reporting. It also details his leadership in investor relations and compliance with applicable SEC, Nasdaq, and Sarbanes-Oxley requirements.
Current report
Under the Agreement, Mr. Wilson will receive an annual base salary of $182,250, subject to periodic review, and will be eligible for an annual equity bonus of at least 10% of his base salary in the form of restricted stock units. The Agreement also includes provisions for reimbursement of business expenses, participation in Company benefit plans, and relocation assistance if applicable.
Current report
The Agreement has an open-ended term, continuing until either party provides 120 days’ written notice of termination. It also specifies termination provisions, including compensation and benefits in the event of termination by the Company without cause or by Mr. Wilson for good reason, such as severance equal to up to 36 months of base salary and accelerated vesting of equity awards in certain circumstances, including a change in control. Termination for cause or voluntary resignation without good reason would result in payment of only accrued compensation and benefits through the termination date.
Current report
The Agreement contains customary confidentiality and non-disclosure provisions related to the Company’s trade secrets and other sensitive information.
Current report
The foregoing description of the Agreement is intended to be a summary, and is qualified in its entirety by reference to the Agreement itself, a copy of which was filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the SEC on January 21, 2025.
Current report
Securities Purchase Agreement dated January 6, 2025
Current report
On January 6, 2025, the Company entered into a securities purchase agreement (the “January 2025 SPA”) with an institutional investor (the “Selling Stockholder”), pursuant to which the Company agreed to issue and sell to the Selling Stockholder (i) in a registered direct offering, (a) 175,000 shares of Class A Common Stock (the “January 2025 Shares”); and (b) Pre-Funded Warrants (the "January 2025 Pre-Funded Warrants") to purchase 239,202 shares of the Company’s Class A Common Stock at an exercise price of $0.001 per share and (ii) in a concurrent private placement, common stock purchase warrants consisting of Series A common warrants exercisable for up to 414,202 shares of Class A Common Stock at an exercise price of $8.45 per share of Class A Common Stock (the “January 2025 Series A Warrants”), and Series B common warrants exercisable for up to 207,101 shares of Class A Common Stock at an exercise price of $8.45 per share (the “January 2025 Series B Warrants”, and collectively with the January 2025 Series A Warrants, the “January 2025 Private Placement Warrants”). The offering price per January 2025 Share and respective January 2025 Private Placement Warrants was $8.45, and the offering price per Pre-Funded Warrant was $8.449.
Current report
The securities to be issued in the registered direct offering were offered pursuant to the Company’s shelf registration statement on Form S-3 (File 333-271091) (the “Shelf Registration Statement”), initially filed by the Company with the SEC under the Securities Act on April 3, 2023 and declared effective on April 12, 2023. The January 2025 Pre-Funded Warrants are immediately exercisable upon issuance and will remain exercisable until all of the January 2025 Pre-Funded Warrants are exercised in full.
Current report
The January 2025 Private Placement Warrants (and the shares of Class A Common Stock issuable upon the exercise of the January 2025 Private Placement Warrants) were not registered under the Securities Act, and were offered pursuant to an exemption from the registration requirements of the Securities Act provided under Section 4(a)(2) of the Securities Act and/or Rule 506 of Regulation D promulgated under the Securities Act.
Current report
The terms of the Series A and January 2025 Series B Warrants that comprise the January 2025 Private Placement Warrants are identical, except that the January 2025 Series A Warrants provide for additional protections for the Selling Stockholder in the event of a “Fundamental Transaction” while the January 2025 Series A Warrants are outstanding (which includes, but is not limited to, merger transactions or a sale of substantially all of the Company’s assets). In such an event, then if holders of the Company’s Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Selling Stockholder will be given the same choice as to the consideration it receives upon any exercise of either the Series A or January 2025 Series B Warrants following such Fundamental Transaction. Notwithstanding anything to the contrary, for the January 2025 Series A Warrants, in the event of a Fundamental Transaction, the Selling Stockholder may require the Company or its successor to repurchase the January 2025 Series A Warrants for its Black-Scholes Value (as defined in the Series A Warrant) in cash. This right can be exercised concurrently with, or within 30 days following, the consummation or public announcement of the transaction. If the Fundamental Transaction occurs outside the Company’s control, such as in a hostile takeover or an unapproved transaction, the holder is entitled to receive consideration equivalent in type and proportion to that offered to common stockholders, also calculated based on the Black-Scholes model. Additionally, if no consideration is offered to the Company’s stockholders in the transaction, the holder is deemed to receive common stock of the successor entity, preserving the January 2025 Series A Warrants’ value.
Current report
The January 2025 Private Placement Warrants are immediately exercisable upon issuance, and will expire five years thereafter, and in certain circumstances may be exercised on a cashless basis. If we fail for any reason to deliver shares of Class A Common Stock upon the valid exercise of the January 2025 Private Placement Warrants, subject to our receipt of a valid exercise notice and the aggregate exercise price, by the time period set forth in the January 2025 Private Placement Warrants, we are required to pay the applicable holder, in cash, as liquidated damages as set forth in the January 2025 Private Placement Warrants. The January 2025 Pre-Funded Warrants and January 2025 Private Placement Warrants also include customary buy-in rights in the event we fail to deliver shares of common stock upon exercise thereof within the time periods set forth in the January 2025 Pre-Funded Warrants and January 2025 Private Placement Warrants.
Current report
On January 8, 2025, the Company closed the registered direct offering and the private placement offering (collectively, the “January 2025 Offering”), raising gross proceeds of approximately $3.50 million before deducting placement agent fees and other offering expenses payable by the Company. In the event that all January 2025 Private Placement Warrants are exercised for cash, the Company will receive additional gross proceeds of approximately $5,250,250. The Company’s primary use of the net proceeds will be for working capital, capital expenditures and other general corporate purposes.
Current report
Pursuant to the terms of the January 2025 SPA, the Company is required within 30 days of January 6, 2025 to file a registration statement on Form S-1 or other appropriate form if the Company is not then S-1 eligible registering the resale of the shares of Class A Common Stock issued and issuable upon the exercise of the January 2025 Private Placement Warrants. The Company is required to use commercially reasonable efforts to cause such registration to become effective within 91 days of the closing of the January 2025 Offering, and to keep the registration statement effective at all times until no investor owns any January 2025 Private Placement Warrants or shares issuable upon exercise thereof.
Current report
Pursuant to the terms of the January 2025 SPA, from January 6, 2025 until 30 days after closing, subject to certain exceptions, we may not issue, enter into any agreement to issue or announce the issuance or proposed issuance of any shares of common stock or common stock equivalents, or file any registration statement or any amendment or supplement thereto, other than a prospectus supplement for the Shelf Registration Statement. In addition, from January 6, 2025 until 45 days after closing, we are prohibited from effecting or entering into an agreement to effect any issuance of common stock or common stock equivalents involving a variable rate transaction (as defined in the January 2025 SPA).
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Removed paragraphs (46)
Previous report
Trust Stamp develops proprietary artificial intelligence-powered identity and trust solutions at the intersection of biometrics, privacy, and cybersecurity, that enable organizations to protect themselves and their users while empowering individuals to retain ownership of their identity data and prevent fraudulent activity using their identity.
Previous report
Trust Stamp tackles industry challenges including data protection, regulatory compliance, and financial accessibility, with cutting-edge technology including biometric science, cryptography, and machine learning. Our core technology irreversibly transforms identity information to create tokenized identifiers that enable accurate authentication without the need to store or share sensitive data. By retaining the usefulness of biometric-derived data while minimizing the risk, we allow businesses to adopt biometrics and other anti-fraud initiatives while protecting personal information from hacks and leaks.
Previous report
Trust Stamp’s key sub-markets are identity authentication for the purpose of account opening, access, and fraud detection, the creation of tokenized digital identities to facilitate financial and societal inclusion, and in-community case management software for alternatives to detention and other governmental uses.
Previous report
As biometric solutions proliferate, so does the need to protect biometric data. Stored biometric images and templates represent a growing and unquantified financial, security, and PR liability and are the subject of governmental, media, and public scrutiny since biometric data cannot be “changed” once they are hacked, as they are directly linked to the user’s physical features and/or behaviors. Privacy concerns around biometric technology have led to close attention from regulators, with multiple jurisdictions placing biometrics in a special or sensitive category of personal data and demanding much stronger safeguards around collection and safekeeping.
Previous report
To address this unprecedented danger and increased cross-industry need to establish trust quickly and securely in virtual environments, Trust Stamp has developed its Irreversibly Transformed Identity Token, or IT 2TM, solutions, which replace biometric templates with a cryptographic hash that can never be rebuilt into the original data and cannot be used to identify the subject outside the environment for which it is designed.
Previous report
Trust Stamp’s data transformation and comparison technology is vendor and modality-agnostic, allowing organizations including other biometric services providers to benefit from the increased protection, efficiency, and utility of our proprietary tokenization process. With online and offline functionality, Trust Stamp technology is effective in even the most remote locations in the world.
Previous report
Trust Stamp also offers end-to-end solutions for multi-factor biometric authentication for account access and recovery, KYC/AML compliance, customer onboarding, and more, which allow organizations to approve more genuine users, keep bad actors from accessing systems and services and retain existing users with a superior user experience.
Previous report
Private Placement, Entry Into Warrant Exchange Agreement, and Issuance of the Warrants
Previous report
On December 21, 2023, the Company entered into a warrant exercise agreement (the “WEA”) with a certain institutional investor, pursuant to which the investor agreed to exercise (the “Exercise”) (i) a portion (106,670) of the warrants issued to the 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 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 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.
Previous report
As of December 31, 2023, the institutional investor 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. In addition, in consideration for such Exercise, the investor 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”). The New Warrants have substantially the same terms as the June 2023 Warrants. As of the date of this report, the institutional investor had submitted an Exercise Notice for the remaining 882,000 Existing Warrants that were held in abeyance and the shares of Class A Common Stock were issued to the warrant holders.
Previous report
The Company agreed to file a resale registration statement on Form S-3 with respect to the New Warrants and the shares of Class A Common Stock issuable upon exercise of the New Warrants, which the Company filed on February 16, 2024. The registration statement has not yet been declared effective by the SEC.
Previous report
The gross proceeds to the Company from the Exercise were $2.41 million, prior to deducting warrant inducement agent fees and estimated offering expenses. The Company intends to use the remainder of the net proceeds for business growth, working capital, and general corporate purposes.
Previous report
As of the date of this report, the investor has not exercised the New Warrants. All 3,600,000 of the New Warrants remain outstanding as of the date of this report.
Previous report
Reverse Spit
Previous report
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 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.
Previous report
Statement of Operations Improvement
Previous report
Trust Stamp experienced significant improvements, reflecting its commitment to enhancing operational efficiency and driving sustainable growth, in its Basic and diluted net loss per share attributable to T Stamp Inc. with the result of $1.07 for year ended December 31, 2023 compared to $2.55 for year ended December 31, 2022. Despite investing in our sales force, one key driver in the operating loss improvements were reductions in Selling, general, and administrative expenses by $4.05 million, or 32.53%, for the year ended December 31, 2023, when compared to the year ended December 31, 2022. Selling, general and administrative expenses decreased due to cost savings in certain areas within the Company such as reductions in salaries, bonus and stock-based compensation, payroll costs, and sales commissions totaling $2.14 million for the year ended December 31, 2023, compared to the year ended December 31, 2022. Other notable reductions in Selling, general and administrative expenses for the year ended December 31, 2023 included a $2.20 million net reduction between corporate travel, management consulting and training, office rent, and costs related to carrying mobile hardware assets as direct result of the Company's recent non-personnel cost cutting initiative. In addition, the Company also saw improvements from an $871 thousand or 48.79% reduction in our Cost of sales when comparing the year ended December 31, 2023 and the year ended December 31, 2022. The result of these reductions were a decrease in Operating Loss to $7.89 million from $12.08 million for year ended December 31, 2022 and Net loss attributable to T Stamp Inc. also decreased by $4.45 million or 36.83% when comparing the year ended December 31, 2023 and the year ended December 31, 2022.
Previous report
Further, several projects that were originally in the research and development stage became feasible projects, shifting the allocation of cost from research and development, into cost of services provided in the current year as client specific products were implemented using the technologies. This increase of expense allocation is a result of our prior decision to invest more money in research and development in prior periods and our goal of accelerating our product roadmap coming to fruition.
Previous report
Interest income (expense)
Previous report
Cost of services (“COS”) decreased by $871 thousand or 48.79% for the year ended December 31, 2023, compared to the year ended December 31, 2022. The decrease during this period was primarily driven by the costs related to servicing requirements from the ICE Contract. ICE Contract-related COS for the year ended December 31, 2022, were $802 thousand, including vendor and other miscellaneous costs as well as direct labor costs, versus no ICE Contract-related COS during the year ended December 31, 2023 (as a result of the ICE Contract being terminated in 2022).
Previous report
After adjusting the comparative periods’ COS for ICE Contract related costs, COS reduced by $69 thousand despite onboarding 34 new enterprise customers during the year ended December 31, 2023, and is a result of the the low marginal costs that are inherent in SaaS platforms such as the Orchestration Layer.
Previous report
Selling, general, and administrative expense (“SG&A”) decreased by $4.05 million, or 32.53%, for the year ended December 31, 2023, compared to the year ended December 31, 2022. The decrease in SG&A expense was driven mostly by the reductions in personnel overhead related expense due to the 2022 cost cutting initiatives executed by the Company. While personnel overhead decreased during the year ended December 31, 2023, the headcount increased due to reinvestment of cost cutting savings into bolstering our sales resources and bringing in-house technical positions that were previously outsourced. Headcount increased by 3.53%, from 85 FTE for the year ended December 31, 2022, compared to 88 FTE for the year ended December 31, 2023. In effect, salaries, bonus and stock-based compensation, payroll costs, and sales commissions reduced by $2.14 million for the year ended December 31, 2023, compared to the year ended December 31, 2022.
Previous report
Depreciation and amortization (“D&A”) increased by $29 thousand, or 3.82% for the year ended December 31, 2023, compared to the year ended December 31, 2022. The primary increase in D&A expense related to the $48 thousand increase in amortization of patents between the comparative periods. This increase is the result of new pending patent applications and issued patents with the United States Patent and Trademark Office. During the year ended December 31, 2023, the Company added 4 issued patents, 5 new patent applications, 1 trademark registration, and 2 new trademark applications including the patent application for Tap-In Band TM. The Tap-In Band™ is a wrist-worn, tamper resistant, hypoallergenic near-field communication band that facilitates discrete check-in by, and communication with, participants in community based supervision programs. This technology and associated biometric processes utilize Trust Stamp’s patented IT 2 identity tokenization processes that allow users to biometrically authenticate without the need to store biometric images or templates.
Previous report
Additionally, Capitalized internal-use software amortization increased by $40 thousand between the comparative periods. While the amounts of Capitalized internal-use software vary from period to period, we continue to see a trend of increasing software amortization which is driven by the growth in software capitalization over the prior periods. Overall, this is a further result of newly issued patents continuing to produce new internal-use software, or microservices, that have reached technical feasibility at which point the Company begins to capitalize the related costs.
Previous report
These increases were partially offset by a $60 thousand decrease in D&A expense related to the depreciation of mobile hardware assets that were sold during the year ended December 31, 2023.
Previous report
Interest expense, net increased by $64 thousand, or 724.22% for the year ended December 31, 2023, compared to the year ended December 31, 2022. Interest earned decreased by $7 thousand to $623 for the year ended December 31, 2023 from $8 thousand for the year ended December 31, 2022. Interest expense increased by $57 thousand to $74 thousand for the year ended December 31, 2023 from $17 thousand for the year ended December 31, 2022. The increase in interest expense is primarily due to an increase of $39 thousand in the Malta loan interest rate from 2.5% for the year ended December 31, 2022 to 4.5% for the year ended December 31, 2023. Additionally, the Company recorded $34 thousand in interest expense during the year ended December 31, 2023 for interest accrued on Malta's tax obligations.
Previous report
Impairment of digital assets
Previous report
The Company recognized an impairment on digital assets during the year ended December 31, 2022, of $28 thousand. Digital assets are considered indefinite-lived Intangible assets, net under applicable accounting rules. Accordingly, any decrease in their fair values below our carrying values for such assets at any time subsequent to their acquisition requires recognition of impairment.
Previous report
Other income increased by $260 thousand for the year ended December 31, 2023, compared to the year ended December 31, 2022. The increase was primarily due to a $213 thousand gain on the sale of the mobile hardware assets. Additionally, during the year ended December 31, 2023 there was an increase of $25 thousand related to services received from participants in a startup accelerator program conducted by the Company in Malta with the objective of strengthening the innovation platform and startup ecosystem in Malta.
Previous report
Other expense decreased by $115 thousand for the year ended December 31, 2023, compared to the year ended December 31, 2022. The Company incurred $95 thousand in unrealized loss on foreign currency translation expense for the year ended December 31, 2022, for intercompany transactions between the parent company, T Stamp Inc., and its subsidiaries, Trust Stamp Malta Limited, Biometric Innovations Limited, and Trust Stamp Rwanda Limited with currencies denominated in United States Dollars, European Union Euros, British Pound Sterling, and Rwandan Franc, respectively. After management concluded there is no intention to settle intercompany accounts in the foreseeable future, beginning in June 30, 2022, future fluctuations in foreign currencies between the Company and its subsidiaries are recorded to Accumulated other comprehensive income on the balance sheet instead of Other expense.
Previous report
The increase of $1.89 million in Cash and cash equivalents from December 31, 2022 to December 31, 2023 was a result of the net cash inflow which consisted of $7.85 million net operating cash outflows, $402 thousand net investing cash outflows, and $10.21 million net financing cash inflows. Additionally, there was an $73 thousand cash outflow for a foreign currency transaction adjustment. See the “Cash Flows” subsection below for more details on cash activities during the year ended December 31, 2023.
Previous report
Total Current Assets for the comparative periods increased by 63.44% or $1.82 million from $2.87 million as of December 31, 2022, to $4.70 million as of December 31, 2023. The increase in current assets was primarily driven by the increase in Cash and cash equivalents of $1.89 million (discussed above). Prepaid expenses and other current assets increased by $247 thousand predominantly due to the timing of invoice billing to participants of the startup accelerator program conducted by the Company in the Republic of Malta. Additionally, there was a $322 thousand decrease in Accounts receivable that offset the increase, mostly due to decreased billing and a slight delay in the collection of invoice receipts by several enterprise customers billed as of December 31, 2022.
Previous report
Total Current Liabilities decreased by 38.97% or $1.73 million from $4.45 million as of December 31, 2022 compared to $2.71 million as of December 31, 2023. This decrease is primarily attributed to the $1.80 million decrease in Deferred revenue. Deferred revenue decreased primarily due to the recognition of $2.51 million in non-refundable revenue advances for software provisioned by the Company for IGS of which $1.76 million was in Deferred revenue as of December 31, 2022. Upon termination of the MSA, IGS waived their option to make additional payments in exchange for future maintenance and upgrades. As a result of the termination, Trust Stamp has no further performance obligations or contingencies related to the MSA. Additionally, there were decreases in Other current liabilities, including $191 thousand Related party payables due to the timing of payables and $97 thousand in Short-term operating lease liabilities due to the termination of two Malta office leases in 2023. The decreases in Total Current Liabilities were offset by the increases of $287 thousand in Accounts payable and $44 thousand in Accrued expenses due to timing of payables as well as $43 thousand in Short-term financial liabilities due to the sale of mobile hardware assets which triggered the total financial liability balance becoming current.
Previous report
In effect, the Company’s current ratio (i.e., the ratio of the Company’s Total Current Assets as a multiple of Total Current Liabilities or the Company’s ability to service its near-term liabilities with its near-to-cash assets) increased from 0.65 as of December 31, 2022 to 1.73 representing a 166.15% increase during the year ended December 31, 2023. This is, in part, a result of the net cash inflow from financing activities, offset by the cash outflows from investing, and operating activities, discussed in further detail below.
Previous report
Effective September 3, 2019, the Company entered into a software license agreement with a customer pursuant to which the Company received total fees of $150 thousand in 2020, $200 thousand in 2021, and $250 thousand in 2022. On December 31, 2022, the software license agreement was amended. The Company received fees of $300 thousand in 2023 which will continue to rise by 15% in each subsequent year after 2023 with the annual minimum fee capped at $1.00 million. The cap in the annual minimum fee does not restrict the Company from earning additional fees for transactions that exceed the annual minimum transaction volume.
Previous report
On September 15, 2022, the Company entered into a Master Services Agreement (“the MSA”) with Innovative Government Solutions (“IGS”) under which the Company and IGS agreed to jointly offer services and IGS was granted a 12-year (renewable) license (“the license”) to resell the Company’s technology subject to payment by IGS of agreed revenue advances and end user license fees. On execution of the MSA, IGS agreed to pay $1.50 million to the Company as a non-refundable revenue advance, an additional $1.50 million non-refundable revenue advance on the first anniversary of the MSA, and $1.00 million on each of the next two anniversaries of the MSA as additional non-refundable revenue advances. IGS had the right to terminate the MSA for convenience before the additional non-refundable revenue advances become due in which case the unpaid additional non-refundable revenue advances will not be payable and the license will terminate. On September 14, 2023, Trust Stamp received notification from IGS that it was terminating the MSA effective September 15, 2023. IGS paid Trust Stamp a total of $2.51 million in non-refundable revenue advances for software provisioned prior to the termination. Upon terminating the MSA, IGS waived their option to make additional payments in exchange for future maintenance and upgrades. Trust Stamp has no remaining performance obligations or contingencies related to the MSA. During the year ended December 31, 2023, Trust Stamp recognized the $2.51 million in IGS non-refundable revenue advances that were previously recorded to Deferred revenue.
Previous report
During the year ended December 31, 2023, the Company received a provisional patent for the Tap-In Band™ patent application, which is a wrist-worn, tamper resistant, hypoallergenic near-field communication band that facilitates discrete check-in by, and communication with, participants in community based supervision programs. This technology and associated biometric processes utilize Trust Stamp’s patented IT 2 identity tokenization processes that allow users to biometrically authenticate without the need to store biometric images or templates. The Company is optimistic about the tremendous market opportunity for the Tap-In Band TMtechnology, specifically in the government sector.
Previous report
Those adjustments included the $1.80 million reduction in Deferred revenue mainly due to the recognition of $2.51 million in non-refundable revenue advances for software provisioned by the Company for IGS, this was partially offset by cash received and recorded to Deferred revenue from various customers. Cash and noncash reductions also included $216 thousand for the Gain on the sale of property and equipment resulting from the sale of mobile hardware assets, $244 thousand increase in Prepaid expenses and other current assets mainly due to the invoice billing to participants of the startup accelerator program conducted by the Company in the Republic of Malta, and $191 thousand for the decrease in Related party payables as a result of the reduction in reliance on outsourced software development.
Previous report
The reductions were offset by adding back certain cash and noncash adjustments including $790 thousand for non-cash Depreciation and amortization, $763 thousand related to stock-based compensation, $281 thousand from the timing of accruals, and $322 thousand for cash received on Accounts receivable.
Previous report
During the year ended December 31, 2023, Net cash flows from financing activities was $10.21 million, compared to Net cash flows from financing activities of $5.10 million for the year ended December 31, 2022. The Company raised $4.78 million and $2.69 million in net proceeds, during the year ended December 31, 2023, from two separate securities purchase agreements ("SPA") with an institutional investor for the issuance of Class A Common Stock, pre-funded warrants, and common stock warrants. The same institutional investor exercised 270,000 warrants to purchase shares of Class A Common Stock of the Company for total proceeds of $621,000. Additionally, the institutional investor exercised 1,800,000 common stock warrants from previous raises for the price of $1.34 per warrant resulting in $2.23 million in net proceeds from the exercise. See Note 3 to the financial statements provided under Item 1 of this report for more details. In addition, during the year ended December 31, 2023, there was a $79 thousand tax withholding adjustment for net issuances on employee equity compensation and $30 thousand for payments on financial liabilities.
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Reworded paragraphs (21)
Previous wording
Adjusted EBITDA loss (non-GAAP) for the year ended December 31, 2023, decreased by 26.17%, to $6.50 million from $8.81 million for the year ended December 31, 2022. The overall decrease in Adjusted EBITDA loss (non-GAAP) was driven primarily by reductions in Selling, general, and administrative expenses (as a result of various operating cost reductions initiated in 2022) including the $1.64 million reduction of stock-based compensation for the year ended December 31, 2023 when compared to the year ended December 31, 2022. In addition, the IGS Contract resulted in $2.51 million in Net revenue for the provision of software during the year ended December 31, 2023, and the release from future contractual obligations for maintenance and upgrades as a result of the termination of the IGS Contract discussed in Liquidity and Capital Resources subsection below. See “Results of Operations” below for further discussion on the drivers behind the decrease in stock-based compensation during the year ended December 31, 2023.
Current wording
GAAP) for the year ended December 31, 2024. See “Results of Operations” below for further discussion on the drivers behind the decrease in stock-based compensation during the year ended December 31, 2024.
Previous wording
In addition to revenue from Mastercard and our S&P 500 bank customer, $2.51 million was derived from a contract with IGS during the year ended December 31, 2023. The Company also continued to expand the Orchestration Layer platform, which is being utilized by several customers including FIS’ new global identity authentication system, which is a SaaS platform that includes the Company’s proprietary tokenization technology, and facilitates no-code and low-code implementations, making adoption faster and even more cost-effective for a broader range of potential customers. The Company expects this platform to accelerate its evolution, from being exclusively a custom solutions provider, to also offering a modular and highly scalable SaaS model with low-code implementation.
Current wording
In addition to revenue from Mastercard and our S&P 500 bank customer, the Company also continued to expand the Orchestration Layer platform, which is being utilized by several customers including FIS’ new global identity authentication system. The Orchestration Layer platform is a SaaS platform that includes the Company’s proprietary tokenization technology, and facilitates no-code, and low-code implementations, making adoption faster and even more cost-effective for a broader range of potential customers. The Company expects this platform to accelerate its evolution, from being exclusively a custom solutions provider, to also offering a modular and highly scalable SaaS model with low-code implementation.
Previous wording
We expect that cost of services provided will continue to decrease in absolute dollars until the transition to primarily SaaS revenue is complete. After the transition is complete, we expect cost of services to increase in absolute dollars as the volume of usage revenue increases, but the margin will continue to improve until they stabilize over time.
Current wording
During the year ended December 31, 2023, we expected that cost of services provided will continue to decrease in absolute dollars until the transition to primarily SaaS revenue is complete. After the transition is complete, we expect cost of services to increase in absolute dollars as the volume of usage revenue increases, but the margin will continue to improve until they stabilize over time. This was evident during the year ended December 31, 2024.
Previous wording
We plan to continue to invest in personnel to support our research and development efforts. As a result, we expect that research and development expenses will increase in absolute dollars for the foreseeable future as we continue to invest to support these activities.
Current wording
During the year ended December 31, 2023 we planned to continue to invest in personnel to support our research and development efforts. As a result, research and development expenses increased in absolute dollars. During the year ended
Previous wording
Interest income (expense) consists primarily of interest expense accrued on a promissory note payable. Additionally, the Company earned interest income in the form of interest on employee stock loans.
Current wording
Interest expense, net consists primarily of interest expense accrued on a promissory note payable. The Company earned interest income in the form of interest on employee stock loans.
Previous wording
Other expense is mainly driven by miscellaneous expenses unrelated to the main focus of the Company’s business. Prior to 2023, Other expense was mainly driven by certain exchange rate gains and losses associated with converting the foreign currency activity to the Company’s reporting currency, United States dollars ("USD"). After management concluded there is no intention to settle intercompany accounts in the foreseeable future, beginning June 30, 2022, future fluctuations in foreign currencies between the Company and its subsidiaries are recorded to Accumulated other comprehensive income on the balance sheet instead of Other expense.
Current wording
Other expense is mainly driven by miscellaneous expenses unrelated to the main focus of the Company’s business.
Previous wording
During the year ended December 31, 2023, Net revenue decreased to $4.56 million, or 15.32% from Net revenue of $5.39 million for the year ended December 31, 2022. During the year ended December 31, 2023, the $4.56 million in Net revenue consisted of $2.51 million from IGS, $810 thousand from a S&P 500 bank, $772 thousand from Mastercard, and various other customers for the remaining $468 thousand. The majority of the decrease in the comparative periods relates to the September 23, 2021 U.S. Immigration and Customs Enforcement contract (“ICE Contract”) which produced $3.29 million in Net revenue during the year ended December 31, 2022 and was subsequently terminated during fiscal year 2022.
Current wording
During the year ended December 31, 2024, Net revenue decreased to $3.08 million from Net revenue of $4.56 million for the year ended December 31, 2023, with $1,497,195 coming in the fourth quarter of 2024. During the year ended December 31, 2024, the $3.08 million in Net revenue consisted of $1.35 million from an S&P bank, $1.00 million license fee from QID under the license and assignment agreement between the Company and QID, $424 thousand from Mastercard, $193 thousand from Triton, $89 thousand from FIS and various other customers for the remaining $22 thousand.
Previous wording
The Orchestration Layer is designed to be a one-stop-shop for Trust Stamp services and provides for easy integration to our products; chargeable on a per-use basis and is accelerating the Company’s evolution from being exclusively a custom solutions provider to also offering a modular and highly scalable SaaS model with low-code implementation.
Current wording
During the year ended December 31, 2024, the Company generated $1.25 million total revenue from customers using the Orchestration Layer compared to $310 thousand during the year ended December 31, 2023. The Orchestration Layer is designed to be a one-stop-shop for Trust Stamp services and provides for easy integration to our products; chargeable on a per-use basis and is accelerating the Company’s evolution from being exclusively a custom solutions provider to also offering a modular and highly scalable SaaS model with low-code implementation.
Previous wording
During the year ended December 31, 2023, the Company generated $310 thousand total revenue from customers using the Orchestration Layer including implementing the Orchestration Layer platform for 34 new enterprise customers through FIS on the Software-as-a-Service (SaaS) platform. In comparison, during the year ended December 31, 2022, the Company generated $104 thousand total revenue from Orchestration Layer customers. Since its launch in the third quarter of 2022, there have been 43 enterprise customers on the Orchestration Layer platform, including 40 financial institutions, as of December 31, 2023. Additionally, revenue from the Orchestration Layer's flagship enterprise customer grew 197% between the comparative periods as a result of transitioning and launching the customer on the Orchestration Layer platform. Orchestration Layer's flagship enterprise customer is already in full production and generating monthly recurring revenue with gross margins in excess of 83.12%. Finally, the Company's S&P 500 bank customer began its transition to an augmented version of the SaaS platform during the year ended December 31, 2023.
Current wording
Since its launch in the third quarter of 2022, there have been 79 enterprise customers on the Orchestration Layer platform, including 66 financial institutions, as of December 31, 2024. Additionally, revenue from the Orchestration Layer's flagship enterprise customer grew 176% between the comparative periods as a result of transitioning and launching the customer on the Orchestration Layer platform. Orchestration Layer's flagship enterprise customer is already in full production and generating monthly recurring revenue with gross margins in excess of 80.54%. Finally, the Company's S&P 500 bank customer began its transition to an augmented version of the SaaS platform during the year ended December 31, 2024.
Previous wording
Research and development (“R&D”) expenses decreased by $124 thousand, or 5.00% for the year ended December 31, 2023, compared to the year ended December 31, 2022. The decrease in R&D expense during the year ended December 31, 2023 was primarily driven by a decrease in outsourced software development during theyear ended December 31, 2023 as the Company continued to transition this work internally. Other cost savings during theyear ended December 31, 2023 were also realized due to the termination of employees hired for the ICE contract, closure of the United Kingdom office, as well as, a decrease in stock-based compensation expense.
Current wording
Research and development (“R&D”) expenses decreased by $211 thousand, or 8.97% for the year ended December 31, 2024, compared to the year ended December 31, 2023. The decrease in R&D expense during the year ended December 31, 2024 was primarily driven by a decrease in outsourced software development during the year ended December 31, 2024 as the Company continued to transition this work internally, as well as, a decrease in salaries related to R&D from the Malta office, together resulting in a decrease of $140 thousand collectively. Comparatively, outsourced software development costs decreased by 86% when comparing the year ended December 31, 2024 to the year ended December 31, 2023. In both periods, R&D expenses mainly were related to R&D payroll and other R&D compensation expenses.
Previous wording
Additionally, the Company recognized an impairment loss on Capitalized internal-use software of $19 thousand during theyear ended December 31, 2023 that offset the increase in R&D. There was no impairment loss on Capitalized internal-use software for theyear ended December 31, 2022. Capitalized internal-use software are considered long-lived assets under applicable accounting guidance. 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.
Current wording
Additionally, the Company recognized an impairment loss on Capitalized internal-use software of $25 thousand during theyear ended December 31, 2024. There was $19 thousand impairment loss on Capitalized internal-use software for theyear ended December 31, 2023. Capitalized internal-use software are considered long-lived assets under applicable accounting guidance. 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.
Previous wording
Other notable reductions in SG&A for the year ended December 31, 2023 included a $2.20 million net reduction between corporate travel, management consulting and training, office rent, and costs related to carrying mobile hardware assets as direct result of the Company's recent non-personnel cost cutting initiative.
Current wording
The increases in SG&A were substantially offset by notable reductions for the year ended December 31, 2024 including a total reduction of $1.10 million in professional fees, management consulting, training, and office and IT services as a direct result of the Company's recent non-personnel cost cutting initiative.
Previous wording
The Company’s Operating loss decreased by $4.19 million or 34.68% for the year ended December 31, 2023, compared to the year ended December 31, 2022. The decrease in Operating loss was mostly related to the decrease of $5.01 million or 28.71% reduction in operating expenses as a result of various cost cutting measures initiated in fiscal years 2022 and 2023 that outpaced the reduction in Net revenue, thereby producing desirable margin growth and greater company efficiency.
Current wording
The Company’s Operating loss increased by $1.48 million or 18.73% for the year ended December 31, 2024, compared to the year ended December 31, 2023. The increase in Operating loss was mostly related to the termination of the September
Previous wording
The decrease from the ICE contract termination is offset by the increase in the Net revenue from the IGS Contract which resulted in $2.51 million in Net revenue for the provision of software during the year ended December 31, 2023, and the release from future contractual obligations for maintenance and upgrades as a result of the termination of the IGS Contract discussed in Liquidity and Capital Resources subsection below. Despite this termination, the Company is optimistic about future opportunities in the government sector, has entered into a teaming agreement to provide future services, and retains the capability to provide future services for maintenance, upgrades, and deployments of the product for additional fees.
Current wording
15, 2022 Master Services Agreement with IGS ("IGS Contract") which resulted in $2.51 million decrease in Net revenue when comparing the year ended December 31, 2024 with the year ended December 31, 2023 and the release from future contractual obligations for maintenance and upgrades as a result of the termination of the IGS Contract.
Previous wording
The Company recognized a gain in Change in fair value of warrant liability during the year ended December 31, 2023 of $5 thousand compared to a gain of $113 thousand during the year ended December 31, 2022. This change is based on the fair value assessment and adjustment for one warrant liability as described in Note 3 to the financial statements provided under Item 1 of this report.
Current wording
The Company recognized a gain in Change in fair value of warrant liability during the year ended December 31, 2024 of $1 thousand compared to a gain of $5 thousand during the year ended December 31, 2023. This change is based on the fair value assessment and adjustment for one warrant liability as described in Note 3 to the consolidated financial statements provided under Item 1 of this report.
Previous wording
As of December 31, 2023, the Company had approximately $3.14 million cash in its banking accounts.
Current wording
As of December 31, 2024, the Company had approximately $2.78 million cash in its banking accounts. The Company is generating revenues, but has not yet generated profits, with a net loss for the year ended December 31, 2024 of $10.61 million, Net operating cash outflows of $8.92 million for the same period, and an accumulated deficit of $61.46 million as of December 31, 2024. During the year ended December 31, 2024, the Company entered into a number of financing arrangements with institutional investors pursuant to which it raised capital from the (registered and unregistered) sale of its Class A Common Stock, as well as warrants convertible into shares of its Class A Common Stock, to help support its operations.
Previous wording
The accompanying 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 year ended December 31, 2023 of $7.64 million, Net operating cash outflows of $7.85 million for the same period, and an Accumulated deficit of $50.85 million as of December 31, 2023.
Current wording
The accompanying 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 year ended December 31, 2024 of $12.54 million, Net operating cash outflows of $8.92 million for the same period, and an Accumulated deficit of $61.46 million as of December 31, 2024.
Previous wording
The Company’s ability to continue as a going concern in the next twelve months, following the date the 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 its 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.
Current wording
The Company’s ability to continue as a going concern in the next twelve months, following the date the 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 its 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 12 months since issuance date.
Previous wording
Net cash flows from operating activities increased by 23.91% from $6.34 million during the year ended December 31, 2022, compared to $7.85 million during the year ended December 31, 2023. Of the $7.64 million net loss for the year ended December 31, 2023, there were various cash and non-cash adjustments that were added back to the Net loss to arrive at $7.85 million cash used for operating activities for the year ended December 31, 2023.
Current wording
Net cash flows used in operating activities increased by 13.59% from $7.85 million during the year ended December 31, 2023, compared to $8.92 million during the year ended December 31, 2024. Of the $10.61 million net loss for the year ended December 31, 2024, there were various cash and non-cash adjustments that were added back or deducted to the Net loss to arrive at $8.92 million cash used for operating activities for the year ended December 31, 2024.
Previous wording
Net cash used in investing activities during the year ended December 31, 2023 was $402 thousand, compared to net cash of $998 thousand used in the year ended December 31, 2022. Cash used in investing activities during the year ended December 31, 2023 related primarily to new and continued investments in technologies that we intend to capitalize and monetize over time. In addition, the Company continued to prioritize intellectual property, which produced five (5) new pending patent applications and four (4) issued patents with the United States Patent and Trademark Office during the year ended December 31, 2023. The cash used during the year ended December 31, 2023 was offset by the $377 thousand decrease in Property and equipment, net related to the sale of the mobile hardware assets.
Current wording
Net cash used in investing activities during the year ended December 31, 2024 was $907 thousand, compared to net cash of $402 thousand used in the year ended December 31, 2023. Cash used in investing activities during the year ended December 31, 2024 related primarily to new and continued investments in technologies that we intend to capitalize and monetize over time totaling $792 thousand for capitalized software, patents, and trademarks. The Company continued to prioritize intellectual property, which produced eight (8) new pending patent applications and six (6) issued patents with the United States Patent and Trademark Office during the year ended December 31, 2024.
Previous wording
Our consolidated financial statements are prepared in accordance with GAAP. The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses, as well as related disclosures. We evaluate our estimates and assumptions on an ongoing basis. Our estimates are based on historical experience and various other assumptions that we believe to be reasonable under the circumstances. Our actual results could differ from these estimates. The critical accounting estimates, assumptions, and judgments that we believe have the most significant impact on our consolidated financial statements are described below.
Current wording
Our consolidated financial statements are prepared in accordance with GAAP. The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses, as well as related disclosures. Our significant accounting policies are disclosed in Note 1 to our consolidated financial statements in this Annual Report on Form 10-K. Management believes that there are no critical accounting estimates in these financial statements.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
December 31, 2024 research and development expenses decreased, primarily driven by a decrease in outsourced software development during the year ended December 31, 2024 as the Company continued to transition this work internally.