T Stamp (US:IDAI)2025-03-31 21:26Financial Performance - For the fiscal year ended December 31, 2024, the company incurred a net loss of $12.54 million, compared to a net loss of $7.64 million for the fiscal year ended December 31, 2023, indicating a 64.5% increase in losses year-over-year[95]. - The company's accumulated deficit reached $61.46 million as of December 31, 2024, reflecting ongoing financial challenges[96]. - Adjusted EBITDA loss for the year ended December 31, 2024, increased by 12.17% to $7.29 million from $6.50 million in 2023[212]. - The Company recognized a net loss before taxes of $10,597,348 for the year ended December 31, 2024, compared to a loss of $7,651,127 in 2023[212]. - The company has not yet generated profits and anticipates that operating expenses will increase in the near future[96]. Business Development and Expansion - Trust Stamp opened an office in Tokyo to pursue opportunities in the APAC region, funded by the City of Tokyo and the Japanese government[19]. - The company has established Trust Stamp Nigeria Limited on January 31, 2024, to explore business opportunities in Nigeria[89]. - Trust Stamp Malta Limited operates an R&D campus in Malta, supported by a repayable advance of up to €800,000 to cover 75% of payroll costs for new employees[81]. - The company has established a regional R&D center in Rwanda and is in discussions with two African countries for national-level digital identity programs[29]. - The Company plans to focus on joint ventures with industry partners to enhance market access and reduce overhead costs[168]. Technology and Innovation - The company has expanded its IP portfolio with technologies such as embedded ownership verification for crypto-assets and a biometric verification utility called "Shape Overlay"[19]. - Trust Stamp's technology is designed to enhance KYC/AML compliance and reduce synthetic identity fraud, improving user experience[33]. - The Company has developed several innovative technologies, including "Shape Overlay" for biometric verification and "Stable Key" for secure password management[168]. - Trust Stamp has multiple pending patents related to biometric systems, including a patent for "Systems and Processes for Lossy Biometric Representations" filed on March 23, 2022, which is currently issued with a maintenance fee due by February 28, 2027[71]. - The company has a total of 15 patents related to biometric technology, with various statuses including issued and pending[74]. Customer and Revenue Generation - The Company has onboarded over 60 financial institutions with a total of $348 billion in assets as of December 31, 2024, with 79 customers either fully implemented or currently implementing the Orchestration Layer[51]. - The first non-FIS client onboarded to the Orchestration Layer has generated $426,000 in revenue to date, including $193,000 during the year ended December 31, 2024[51]. - The Company generated revenue through a Master Software Agreement with an S&P 500 bank and a ten-year technology services agreement with Mastercard, both of which are expected to drive future revenue growth[47]. - The Company currently relies on three customers for substantially all of its revenues, which poses a risk if any of these customers are lost[117]. Regulatory and Compliance Issues - The Company is currently compliant with licensing requirements in Atlanta and Rwanda but anticipates potential future regulations related to biometric data[52]. - The company is subject to significant governmental regulations regarding data privacy and biometric data handling, including HIPAA, GDPR, and CCPA[53][61][63]. - The company faces risks related to foreign currency fluctuations, as the majority of its revenue is US Dollar denominated while a significant percentage of expenses are incurred in other currencies[99]. - The company is subject to substantial governmental regulation regarding data privacy and may incur significant costs to comply with these regulations[101]. Operational Challenges - The company continues to face risks associated with being an early-stage company, including the potential for ongoing operating losses and challenges in achieving profitability[92][94]. - The company faces challenges in managing indirect sales channels, which may require more management attention and could limit revenue growth[119]. - The company may encounter significant delays and unexpected expenses related to product development and market acceptance, impacting its growth potential[106]. - The company identified material weaknesses in internal controls over financial reporting as of December 31, 2024, impacting its ability to accurately account for complex equity transactions[132]. Capital and Financing - The company expects to raise additional capital through equity and/or debt offerings to support working capital requirements and operating losses[99]. - The Company raised approximately $3.50 million from the January 2025 Offering, with potential additional proceeds of approximately $5,250,250 if all Private Placement Warrants are exercised[188]. - An Equity Distribution Agreement with Maxim Group allows the Company to sell up to $6,196,000 worth of Common Stock over a 12-month period[169]. - The Company must obtain shareholder approval for an increase in authorized shares within 60 days following the closing of the December 2024 SPA[193]. Management and Governance - Lance Wilson appointed as Chief Financial Officer effective January 1, 2025, with an annual base salary of $182,250 and eligibility for a minimum 10% equity bonus[180]. - The Board reserves the right to grant long-term stock-based compensation to align executive performance with long-term business strategies[157]. - The Board of Directors has the discretion to grant incentive bonuses linked to the Company's performance and individual executive performance[156]. Cybersecurity and Risk Management - The Company did not experience any material cybersecurity breaches during the year ended December 31, 2024[141]. - The Company has strengthened its cybersecurity certifications by adding SOC2 certification and renewing D-Seal certification[175].