T Stamp (US:IDAI)2024-04-01 12:23Liquidity and Cash Flow - Cash and cash equivalents increased to $3,140,747 in 2023 from $1,254,494 in 2022, reflecting a significant improvement in liquidity[257] - Cash and cash equivalents increased to $3.14 billion at the end of 2023 from $1.25 billion at the end of 2022, a 150.8% increase[269] - Net cash flows from financing activities increased to $10.21 billion in 2023 from $5.10 billion in 2022, a 100.2% increase[269] - Negative net operating cash outflows for the year ended December 31, 2023 was $7.85 million[278] - Cash paid during the period for interest was $580[271] Accounts Receivable and Payables - Accounts receivable decreased to $686,327 in 2023 from $1,008,375 in 2022, indicating a reduction in outstanding receivables[257] - Gross receivables as of December 31, 2023 were $694 thousand[299] - Accrued expenses as of December 31, 2023, totaled $1,143,890, compared to $1,099,824 in 2022, with significant increases in compensation payable ($377,403 vs. $171,851) and accrued employee taxes ($624,525 vs. $591,992)[384] Assets and Liabilities - Total current assets rose to $4,697,942 in 2023 from $2,874,401 in 2022, driven by higher cash and prepaid expenses[257] - Total liabilities decreased to $3,978,434 in 2023 from $5,786,774 in 2022, showing a reduction in financial obligations[257] - Property and equipment, net decreased to $56,436 in 2023 from $300,664 in 2022, reflecting asset disposals or write-offs[257] - Intangible assets, net, decreased to $223,690 in 2023 from $251,686 in 2022, with patent application costs increasing to $484,035 from $382,285[385] - The company added 4 patents and 1 trademark in 2023, increasing the total number of patents to 17, and recognized $160 thousand in intangible asset amortization expense, up from $107 thousand in 2022[386] - Estimated future amortization expense for intangible assets is $120,078 in 2024, $75,043 in 2025, and $28,569 in 2026[387] - The company has a financial liability of $162 thousand for an executed agreement with a telecommunications company, expected to be paid by December 31, 2024[430] Revenue and Expenses - Net revenue for 2023 decreased to $4.56 billion from $5.39 billion in 2022, a decline of 15.3%[260] - Total revenue for 2023 was $4.56 million, a decrease from $5.39 million in 2022[313] - Professional services revenue for 2023 was $4.26 million, slightly down from $4.42 million in 2022[313] - License fees revenue increased to $300 thousand in 2023 from $250 thousand in 2022[313] - Advertising and marketing expenses were $224 thousand in 2023, up from $217 thousand in 2022[319] - Research and development expenses decreased to $2.35 billion in 2023 from $2.47 billion in 2022, a 5% reduction[260] - Selling, general, and administrative expenses decreased to $8.40 billion in 2023 from $12.44 billion in 2022, a 32.5% reduction[260] - Depreciation and amortization expenses increased to $789.59 million in 2023 from $760.50 million in 2022, a 3.8% increase[260] - Capitalized internal-use software impairment of $19 thousand recognized in 2023, compared to no impairment in 2022[304] Losses and Deficit - Accumulated deficit widened to $50,853,285 in 2023 from $39,299,726 in 2022, reflecting continued operational losses[257] - The company has incurred significant losses and needs to raise additional funds to meet its obligations, raising substantial doubt about its ability to continue as a going concern[250] - Net loss for the year ended December 31, 2023 was $7.64 million[278] - Accumulated deficit as of December 31, 2023 was $50.85 million[278] - Net loss attributable to T Stamp Inc. decreased to $7.64 billion in 2023 from $12.09 billion in 2022, a 36.8% improvement[260] - Comprehensive loss attributable to T Stamp Inc. decreased to $7.74 billion in 2023 from $12.04 billion in 2022, a 35.7% improvement[263] - Net loss before taxes improved to $7,651,127 in 2023 from $12,070,464 in 2022, with U.S. losses decreasing to $4,433,956 from $7,911,970[388] - Net loss per share attributable to common stockholders improved to $1.07 in 2023 from $2.55 in 2022, with weighted average shares increasing to 7,127,560 from 4,732,774[396] Stockholders' Equity and Capital - Total stockholders' equity increased to $3,914,880 in 2023 from $625,144 in 2022, primarily due to additional paid-in capital[257] - The company's total promissory notes payable increased from $886,465 in 2022 to $953,877 in 2023, with accrued interest rising from $16,775 to $40,317[342] - Malta loan interest rate increased from 2.5% in 2022 to 4.5% in 2023[344] - Liability classified warrants decreased in fair value from $261,569 in 2022 to $256,536 in 2023[345] - The company issued a warrant to purchase up to $1.00 million of capital stock at a 20% discount, with a fair value of $250 thousand as of December 31, 2023[345] - Equity classified warrants outstanding increased significantly from 1,465,083 in 2022 to 6,446,199 in 2023[349] - The company received $884 thousand from the Maltese government as of December 31, 2023, covering 75% of payroll costs for the first 24 months[342] - The company's potential common shares outstanding were not included in diluted net loss per share calculations as the effect would be anti-dilutive[338] - The company issued 271,593 warrants from August 2021 to December 2021 and 15,421 warrants from January 2022 to February 2022, which became exercisable on January 26, 2022[354] - Investors exercised 2,850 warrants at $20.00 per share, generating $57 thousand in cash proceeds during the quarter ended December 31, 2022[355] - The company sold 195,000 shares of Class A Common Stock and issued 390,000 warrants at $8.85 per share, totaling $1,511,250 in proceeds on September 14, 2022[357] - On June 5, 2023, the company reduced the exercise price of 390,000 warrants to $2.30, resulting in a total purchase price of $897,000[359] - The company issued 270,000 shares of Class A Common Stock for $621,000 on August 18, 2023, after exercising 270,000 warrants at $2.30 per share[360] - On December 21, 2023, the company reduced the exercise price of 120,000 warrants to $1.34, resulting in $160,800 in proceeds[361] - The company issued 1,573,330 shares of Class A Common Stock for net proceeds of $4,778,550 on April 18, 2023, after deducting placement fees and legal expenses[365] - On December 21, 2023, the company reduced the exercise price of 1,573,330 warrants to $1.34, resulting in $2,108,262 in proceeds[366] - The company issued 736,400 shares of Class A Common Stock for net proceeds of $2,686,773 on June 5, 2023, after deducting placement fees and legal expenses[369] - The company issued 322,300 and 221,000 shares of Class A Common Stock for $322 and $221, respectively, on June 12 and June 23, 2023, after exercising pre-funded warrants[370] - The company sold mobile hardware for a gross sales price of $180 thousand and a gain of $108 thousand on April 26, 2023, and another portion for $197 thousand with a gain of $108 thousand on May 26, 2023[383] Stock-Based Compensation - Stock-based compensation decreased to $763.29 million in 2023 from $2.40 billion in 2022, a 68.2% reduction[269] - The company granted stock-based awards to employees totaling $627 thousand in RSUs in 2023, down from $1.80 million in 2022[400] - The company had 393,583 stock options outstanding as of December 31, 2023, with a weighted average exercise price of $6.27 per share and a weighted average remaining contractual life of 1.95 years[401] - The weighted average grant-date fair value of options granted in 2023 was $1.08 per share, compared to $7.65 per share in 2022[402] - As of December 31, 2023, the company had 446,102 RSUs outstanding, with 47,813 vested but not issued and 398,289 not yet vested[405] - Total stock-based compensation expense for 2023 was $763,288, a significant decrease from $2,399,063 in 2022[407] - The company had 71,407 common stock grants outstanding as of December 31, 2023, with 60,168 vested but not issued and 11,239 not yet vested[404] - The company had unrecognized stock-based compensation related to RSUs of $25,000 as of December 31, 2023[405] Leases and Operating Expenses - Deferred revenue dropped significantly to $10,800 in 2023 from $1,811,680 in 2022, indicating a decline in advance payments[257] - The company elected not to separate lease components from non-lease components and accounts for leases as a single lease component[334] - The company's operating lease right-of-use assets equal the carrying amount of related operating lease liabilities, adjusted for lease payments and incentives[332] - Operating lease liabilities are recognized at the present value of lease payments, using an estimated incremental borrowing rate for discounting[332] - The company's operating leases have a weighted average remaining lease term of 2.41 years and a weighted average discount rate of 5.0% as of December 31, 2023[425] - The company terminated four leases in 2023, incurring $10,932 in lease termination fees and recognizing a loss of $669[426] - The company extended its Malta office lease agreement in April 2023, increasing the operating lease right-of-use asset by $82,000 and the operating lease liability by $83,000[426] - The company entered into a new 60-month motor vehicle lease in Malta in November 2023, increasing the operating lease right-of-use asset by $47,000 and the operating lease liability by $41,000[427] - Operating lease right-of-use assets decreased from $315,765 in 2022 to $164,740 in 2023, a reduction of 47.8%[428] - Total operating lease liabilities decreased from $280,202 in 2022 to $135,007 in 2023, a reduction of 51.8%[428] - Total lease expense decreased from $366,721 in 2022 to $269,208 in 2023, a reduction of 26.6%[429] - Cash paid for operating cash flows from operating leases decreased from $258,892 in 2022 to $179,621 in 2023, a reduction of 30.6%[429] - Future maturities of ASC 842 lease liabilities for 2024 total $85,135, including $81,236 in principal payments and $3,899 in interest payments[428] - Short-term operating lease liabilities decreased from $177,795 in 2022 to $81,236 in 2023, a reduction of 54.3%[428] - Long-term operating lease liabilities decreased from $102,407 in 2022 to $53,771 in 2023, a reduction of 47.5%[428] - The company did not incur variable lease expense during the year ended December 31, 2023[429] Taxes and Legal Matters - The company's effective tax rate was 0% for both 2023 and 2022[325] - No unrecognized tax benefits as of December 31, 2023 and 2022[327] - The company had no accrued penalties related to uncertain tax positions as of December 31, 2023 and 2022[328] - The company is subject to potential tax examination in the U.S. for tax years 2020 through 2022[329] - Federal net operating loss carryforwards totaled $19,127,170 as of December 31, 2023, with $18,553,119 having an indefinite life[392] - The company is not involved in any pending or threatening litigation as of December 31, 2023[431] Intellectual Property - The company received multiple patents in 2023, including "Systems and Processes for Lossy Biometric Representation" and "Ownership Validation for Cryptographic Asset Contracts Using Irreversibly Transformed Identity Tokens," expanding its intellectual property portfolio[388] Audits and Financial Statements - The company's financial statements were audited by Marcum LLP, which expressed an unqualified opinion on the financial statements[249]