Trust Stamp (Nasdaq: IDAI, Euronext Growth: AIID ID), a global
provider of AI-powered trust and identity services used globally
across multiple sectors, provides a business update and commentary
on reported financial results for the interim results for the six
months ended June 30, 2022 (“H1 2022”).
Gareth Genner, Chief Executive Officer,
comments: “We achieved a 182% year-over-year increase in revenue
and a 284% increase in gross profit during the first half of 2022,
reflecting the strength of our technology offerings and the
continued efficient execution of our business plan.”
“Our decision to invest in developing
cutting-edge, cost-effective, humane, and privacy-first
technologies for the Alternatives to Detention (“ATD”) and similar
programs has been validated by the House Appropriations
Subcommittee on Homeland Security recommending a substantial
increase (to $569.3m) in the funding allocated to the Alternatives
to Detention program for the 2023 fiscal year, with a goal of more
than doubling the current number of participants. Although our
initial pilot with Immigration and Customs Enforcement has
concluded, we are pursuing multiple opportunities in the ATD and
broader Criminal Justice Space, including a partnership to offer
additional value-added services that will further distinguish our
offerings, as well as increasing the revenue potential from each
engagement.”
“In parallel, we continue to advance our
long-term work with a premier S&P 500 bank, as well as our
collaboration with Fidelity Information Services, LLC (“FIS”) to
implement our proprietary tokenization in FIS’ new global identity
authentication system. Two pilots are scheduled with banks, and we
anticipate commencing pilots with additional banks later this year.
These pilots all utilize our next-generation identity package,
offering rapid deployment across devices and platforms with custom
workflows for a consistent user experience.”
“Overall, apart from government and banking
use-cases, our technology platform has broad applications with
significant market opportunities across multiple sectors, including
travel, healthcare, Metaverse and cryptographic key and account
credential safekeeping, and more. Building on our success, we
recently announced key partnerships with IdRamp, to leverage our
technologies for transformative biometric multi-factor
authentication applications, as well as letus (formerly RentMoola),
to deliver world-class security in the rental space.”
“We are also proud to continue working with
Mastercard International to leverage our patented IT2 tokenized
identity technology for Humanitarian & Development purposes as
a core element of its Community Pass and Inclusive Identity
offerings. This offering is designed to not only provide financial
inclusion services for individuals and businesses, but also broader
access to basic necessities, including food, water healthcare and
more. We are further encouraged by the recent announcement that a
Wellness Pass pilot program utilizing our technology is launching
in Ethiopia, a market with over one hundred and fifteen million
potential users. Moreover, there are nearly two billion people in
the world without the ability to assert an identity for digital
transactions and we believe this represents not only a tremendous
business opportunity but also an important contribution to global
societal
inclusion.”
“At the same time as developing our user base, we continue to
invest in research and development to further expand our portfolio
of transformative identity solutions, not only covering identity
tokenization but also presentation attack detection, metaverse
identity systems, NFTs, and trust scores. Towards this end, we
recently received a Notice of Allowance by the United States Patent
Office for our twelfth patent, and we have an additional twenty-one
patent applications pending. Trust Stamp’s technology uniquely
addresses the market need for an unparalleled level of identity
data protection at a fraction of the cost, while improving the
efficiency and expanding the utility of legacy identity
systems.”
“Our investments in scalable infrastructure
position us to achieve growth and deliver meaningful value for our
shareholders. We remain committed to our mission of delivering
equitable, privacy-preserving identity solutions that empower
access and protect data for individuals and organizations around
the world. We remain highly encouraged by the outlook for the
business and look forward to providing further updates in the weeks
and months ahead.”
Financial Performance Overview
Revenue
Net revenue increased by $2.28 million or 182.0%, to $3.53
million for H1 2022, compared to $1.25 million for H1 2021. This
increase was primarily due to revenue contracts executed by new and
existing customers, while net revenue was $0.71 million in Q2 2022
compared to $0.72 million in Q2 2021 reflecting the timing of
orders and the pause in performance (and hence billing) in respect
of a government.
Gross Profit
Gross profit increased by $1.84 million or
284.0% for the first half of 2022 compared to the same period last
year, and gross profit margin improved to 70.5% for the half-year
2022, compared to 51.7% for H1 2021. The improvement was due in
part to the Company’s prior investment in research and development,
which enabled the utilization of existing technologies with
relatively nominal implementation costs for new deployments. Gross
profit was $360 thousand, or 50.8% of revenue in Q2 2022, compared
to $373 thousand, or 51.8% of revenue for Q2 2022. It is
important to note that the cost of goods sold in Q2 included labor
costs related to retaining the staff needed to service the
government contract without receiving offsetting revenue.
Research and Development
Research and development (R&D) costs for Q2
2022 were $574 thousand for Q2 2022, compared to $317 thousand for
Q2 2021. R&D costs were $1.0 million for H1 2022, compared to
$484 thousand for H1 2021 reflecting the increase in R&D
personnel to support an accelerated product roadmap. R&D
costs are not expected to continue growing at their prior pace and
the Company anticipates reporting lowered expenditure on R&D by
Q4 of 2022 as a result of increased operational efficiencies.
Selling, General, and Administrative Expenses
Selling, general, and administrative (SG&A)
expense was $2.53 million for Q2 2022, compared to $1.95 million
for Q2 2021. SG&A expense was $5.70 million for H1 2022,
compared to $3.87 million for H1 2021. The increase in SG&A
expense during the three and six months ended June 30, 2022, was
primarily driven by investment in personnel to support growth
initiatives. SG&A for the H1 2022 also included legal and
professional services fees, as well as other one-off fees and costs
related to the listing of the Company’s common stock on the Nasdaq
Capital Market in the first quarter of 2022. The company
anticipates reporting reduced SG&A costs in Q4 as a result of
increased operational efficiencies.
Operating Loss
Operating loss was $2.94 million for Q2 2022,
compared to $2.05 million for H1 2021. Operating loss was $4.58
million for H1 2022, compared to $3.98 million for H1 2021. The
primary reason for the increase in operating loss was an increase
in SG&A (including carrying the labor costs required to support
the government contract while performance was paused), and the
increase in R&D expenses.
Net Loss
Net loss was $2.92 million or $0.13 per basic and diluted share
for Q2 2022, compared to $1.97 or $0.10 per basic and diluted share
for Q2 2021. Net loss was $4.61 million or $0.20 per basic and
diluted share for H1 2022, compared to $4.00 million or $0.22 per
basic and diluted share for H1 2021.
Liquidity and Capital Resources
As of June 30, 2022, and December 31, 2021, the
Company had approximately $2.83 million and $3.48 million of cash,
respectively. Total working capital as of June 30, 2022, was $2.94
million, compared to $3.36 million as of December 31, 2021. As of
June 30, 2022, and December 31, 2021, the Company had no long-term
debt. Total stockholders’ equity was $4.95 million as of June 30,
2022, compared to $5.03 million as of December 31, 2021.
A copy of the Company’s quarterly report on Form
10-Q for the second quarter ended June 30, 2022 has been
filed with the Securities and Exchange Commission and posted on the
Company’s website at
https://investors.truststamp.ai/sec-filings/.
About Trust Stamp
Trust Stamp, is a global provider of AI-powered
identity services for use in multiple sectors including banking and
finance, regulatory compliance, government, real estate,
communications, and humanitarian services. Its technology empowers
organizations with advanced biometric identity solutions that
reduce fraud, protect personal data privacy, increase operational
efficiency, and reach a broader base of users worldwide through its
unique data transformation and comparison capabilities.
Located in nine countries across North America,
Europe, Asia, and Africa, Trust Stamp trades on the Nasdaq Capital
Market (Nasdaq: IDAI) and Euronext Growth in Dublin (Euronext
Growth: AIID ID). The company was founded in 2016 by Gareth Genner
and Andrew Gowasack.
Safe Harbor Statement: Caution Concerning
Forward-Looking Remarks
All statements in this release that are not
based on historical fact are “forward-looking statements” including
within the meaning of the Private Securities Litigation Reform Act
of 1995 and the provisions of Section 27A of the Securities Act of
1933, as amended, and Section 21E of the Securities Exchange Act of
1934, as amended. The information in this announcement may
contain forward-looking statements and information related to,
among other things, the company, its business plan and strategy,
and its industry. These statements reflect management’s current
views with respect to future events-based information currently
available and are subject to risks and uncertainties that could
cause the company’s actual results to differ materially from those
contained in the forward-looking statements. Investors are
cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date on which they are made.
The company does not undertake any obligation to revise or update
these forward-looking statements to reflect events or circumstances
after such date or to reflect the occurrence of unanticipated
events.
Trust Stamp
Email: Shareholders@truststamp.ai
Gareth Genner, Chief Executive
Officer
Davy (Euronext Growth
Advisor)
Tel: +353 1 679 6363
Barry Murphy
Investor
Relations
Tel: +1 212-671-1021
Crescendo
Communications
Email: idai@crescendo-ir.com
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