T Stamp (US:IDAI)2023-08-14 20:12Revenue and Market Growth - Trust Stamp's primary products, utilizing the Irreversibly Transformed Identity Token, accounted for the majority of its revenues during the six months ended June 30, 2023[173]. - The global biometric system market is valued at $41.1 billion in 2023, with a forecast compound growth of 20.4% from 2023 to 2030, reaching an estimated $150.6 billion by 2030[171]. - The company anticipates user-based revenue starting in 2024, with growth expected year-on-year thereafter[177]. - Trust Stamp's strategic pivot towards a modular SaaS model is expected to negatively impact revenue in 2023 but increase potential revenue in 2024 and beyond[174]. Financial Performance - Net revenue for the three months ended June 30, 2023, decreased by 34.94% to $460,804 from $708,288 in the same period of 2022, primarily due to the termination of the ICE Contract[190]. - Net revenue for the six months ended June 30, 2023, decreased to $919 thousand, a decline of 73.95% from $3.53 million in the same period in 2022, largely due to the termination of the ICE contract which previously generated $2.44 million[213]. - Adjusted EBITDA loss for the three months ended June 30, 2023, decreased by 6.73% to $2.07 million from $2.22 million in the same period of 2022[187]. - Adjusted EBITDA loss for the six months ended June 30, 2023, increased by 29.91% to $4.36 million from $3.35 million in the same period of 2022, driven by a reduction in stock-based compensation[188]. - The Company's operating loss decreased by $556 thousand or 18.91% for the three months ended June 30, 2023, compared to the same period in 2022, primarily due to a reduction in operating expenses by $803 thousand or 22.02%[205]. Expenses and Cost Management - Cost of services decreased by 41.43% to $203,928 for the three months ended June 30, 2023, compared to $348,166 in the same period of 2022, mainly due to the termination of the ICE Contract[194]. - Selling, general, and administrative expenses decreased by 25.87% to $1,877,616 for the three months ended June 30, 2023, from $2,532,849 in the same period of 2022, largely due to headcount reductions[200]. - Research and development expenses remained relatively stable, decreasing by only 0.02% to $574,397 for the three months ended June 30, 2023, compared to $574,490 in the same period of 2022[196]. - Selling, general, and administrative expenses decreased by $1.85 million, or 32.49%, for the six months ended June 30, 2023, primarily due to a 23.08% reduction in global headcount[222]. Customer and Product Development - Trust Stamp's Orchestration Layer is designed to facilitate no-code and low-code implementations, making adoption faster and cost-effective for a broader range of potential customers[178]. - The Orchestration Layer generated $110,000 in total revenue from customers during the three months ended June 30, 2023, with 31 enterprise customers onboarded since its launch[191]. - The flagship enterprise customer on the Orchestration Layer platform experienced a revenue growth of 430.99% between the comparative periods, achieving gross margins exceeding 82%[192]. - The Company generated $207 thousand in total revenue from the Orchestration Layer, with 22 enterprise customers onboarded through FIS on the SaaS platform, and revenue from the flagship customer grew by 396.97%[214]. Assets and Liabilities - Total current assets increased by 110.74% or $3.18 million from $2.87 million as of December 31, 2022, to $6.06 million as of June 30, 2023, driven by a cash increase of $3.78 million[236]. - Total current liabilities increased by 3.21% or $143 thousand from $4.45 million as of December 31, 2022, to $4.59 million as of June 30, 2023, primarily due to an $887 thousand increase in deferred revenue[237]. - The Company's current ratio improved from 0.65 as of December 31, 2022, to 1.32 as of June 30, 2023, indicating enhanced ability to meet near-term liabilities[238]. Impairments and Other Income - The Company recognized an impairment on digital assets of $24 thousand during the three months ended June 30, 2022, which was not present in the same period in 2023, resulting in a 100% decrease in impairment[209]. - Other income increased by $212 thousand for the three months ended June 30, 2023, primarily due to a $213 thousand gain on the sale of mobile hardware assets[210]. - Other income increased significantly by $249 thousand, or 1,973.47%, to $261,547 for the six months ended June 30, 2023, primarily due to a $213 thousand gain from the sale of mobile hardware assets[231]. Financing and Cash Flow - Net cash from financing activities was $7.42 million for the six months ended June 30, 2023, compared to $3.69 million in the same period of 2022, reflecting increased capital raising efforts[246]. - Cash used in investing activities decreased significantly to $17 thousand in the six months ended June 30, 2023, from $524 thousand in the same period of 2022, primarily due to reduced property and equipment expenditures[245]. Company Classification and Reporting - The Company is classified as an "emerging growth company" and may take advantage of certain reporting exemptions until it no longer qualifies[259]. - The Company may remain an "emerging growth company" for up to five years, starting January 26, 2022, unless the market value of its Common Stock held by non-affiliates exceeds $700 million[260]. - Ongoing public reporting requirements are less rigorous for the Company compared to non-emerging growth companies, potentially resulting in less information for shareholders[261]. - The Company is classified as a smaller reporting company and is not required to provide certain market risk disclosures[262].