T Stamp Inc. (IDAI) - 10-Q Summary for Period Ended June 30, 2025
Business Context and Reporting Period
T Stamp Inc. (d/b/a Trust Stamp) is a smaller reporting company and emerging growth company incorporated in Delaware. The company develops AI-powered identity authentication and fraud prevention software for enterprise, government, and peer-to-peer markets. This report covers the quarterly period ended June 30, 2025. The company operates in a single reportable segment focused on artificial intelligence-powered solutions.
Key Financial Metrics
| Metric | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 |
|---|---|---|
| Net Revenue | $812,667 | $1,358,138 |
| Net Loss | $(1,711,958) | $(3,869,345) |
| Operating Loss | $(1,682,605) | $(3,845,591) |
| Adjusted EBITDA (Non-GAAP) | $(1,229,962) | $(3,066,582) |
| Cash and Cash Equivalents | $292,054 (as of June 30, 2025) | N/A |
| Net Cash Used in Operating Activities | N/A | $(2,096,553) |
| Total Debt (Notes Payable) | $1,105,811 | N/A |
| Working Capital | $(208,423) | N/A |
Note: Working Capital calculated as Total Current Assets ($1,458,163) minus Total Current Liabilities ($1,666,586).
Material Changes vs. Prior Period
- Revenue Growth: Net revenue increased 62.4% quarter-over-quarter (QoQ) and 26.5% year-over-year (YoY) for the six-month period. Growth was primarily driven by a new Master Technology Services Agreement with QID Technologies LLC, contributing $251,000 in the quarter and $339,000 in the six months.
- Expense Reduction: Selling, General, and Administrative (SG&A) expenses decreased significantly by 32.9% QoQ and 30.4% YoY (six months). This was driven by the elimination of the sales team (reduced from 9 to 0 members), the departure of the EVP of M&A, and internal filling of the CFO role without replacement of the vacated position.
- Cost of Services: Increased 46.6% QoQ due to higher web service costs and internal developer allocations for the QID agreement.
- Debt Repayment: The company fully repaid a $3.0 million secured promissory note to SentiLink Corporation in January 2025. However, a new $2.21 million secured promissory note was issued in July 2025 (subsequent event).
- Stock Split: A 1-for-15 reverse stock split became effective on January 6, 2025. All share and per-share data in the filing have been adjusted retroactively.
Guidance, Outlook, Risks, and Unusual Items
- Going Concern Warning: The filing explicitly states that substantial doubt exists regarding the company's ability to continue as a going concern for the next twelve months. The company has an accumulated deficit of $65.3 million and negative working capital. Continued operations depend on raising additional capital and generating revenue.
- Capital Raising: The company entered into a $2.21 million Secured Promissory Note with Streeterville Capital LLC on July 1, 2025, carrying a 9% interest rate and mandatory prepayment clauses. Additionally, an Equity Distribution Agreement with Maxim Group allows for the sale of up to $6.2 million of common stock; $154,000 in net proceeds were generated from this facility subsequent to the period end.
- Customer Concentration: Revenue is highly concentrated. Two customers accounted for approximately 83.8% of revenue in the quarter ended June 30, 2025 (an S&P 500 Bank and QID Technologies).
- Internal Controls: Management concluded that disclosure controls and procedures were not effective as of June 30, 2025, due to a material weakness in internal control over financial reporting related to complex equity transactions. Remediation is in progress.
- Unusual Items: The company recognized a $35,000 loss from an equity method investment in QID Technologies. Other income decreased significantly YoY due to the absence of a one-time gain from a mobile hardware settlement in the prior year.
Investor Verification Checklist
- Cash Runway: Verify the sufficiency of the $292,000 cash balance against the $2.1 million operating cash burn rate for the six-month period.
- Debt Covenants: Review the terms of the new $2.21 million Streeterville Capital note, specifically the mandatory prepayment triggers (50% of future fundraising) and the 7% exit fee.
- Revenue Sustainability: Assess the stability of the QID Technologies contract, which drives a significant portion of recent revenue growth, and the ramp-up timeline for the Orchestration Layer with financial institutions.
- Internal Control Remediation: Monitor the timeline and effectiveness of the remediation plan for the material weakness in internal controls over financial reporting.
- Dilution Risk: Evaluate the impact of outstanding warrants (2.84 million shares) and the potential dilution from the Equity Distribution Agreement and future financing needs.