In a recent development, T Stamp Inc., a prepackaged software services company, has entered into a material definitive agreement resulting in the sale of equity securities. On July 13, 2024, T Stamp Inc. agreed to a Securities Purchase Agreement (SPA) with an unnamed investor to sell 4,597,701 shares of its Class A Common Stock at $0.435 per share, matching its closing price on NASDAQ on July 11, 2024.
The total purchase price of $2 million will be paid to T Stamp Inc. through three promissory notes. These notes include a $500,000 note due on July 31, 2024, another $500,000 note due on August 31, 2024, and a $1 million note payable within three trading days following an effective resale registration statement. Notably, these promissory notes do not accrue interest and can be repaid before their respective due dates.
In conjunction with the SPA, T Stamp Inc. also entered into a Registration Rights Agreement with the investor, obligating the company to file a registration statement for the resale of the newly purchased shares. This agreement stipulates that the registration statement should become effective within 45 days post-closing, subject to SEC review adjustments. Furthermore, the investor has signed a Voting Limitation Agreement, restricting their voting rights to no more than 19.99% of the issued and outstanding shares of the company's Common Stock, unless stockholder approval is obtained.
T Stamp Inc. intends to seek ratification of the SPA at its next stockholder meeting. If the SPA is not ratified, the company will hold extraordinary general meetings every 90 days until stockholder approval is secured. The Voting Limitation Agreement will terminate automatically if the investor's share count falls below 20% of the company's issued Common Stock.
The sale of shares was conducted under Regulation D, exempting it from the registration requirements of Section 5 of the Securities Act of 1933. T Stamp Inc. has disclosed that the proceeds from this transaction will be used for working capital purposes and not for debt repayment.
In other recent news, Trust Stamp, an AI-driven identity services provider, announced its intent to form a strategic alliance with Qenta Inc., aiming to enhance its digital identity technology. This move comes as the company also regained compliance with the Nasdaq Capital Market's minimum stockholders' equity requirement through a private investment. Trust Stamp has been making significant strides in data privacy and age verification as well, filing for a patent on an AI-powered process enhancing biometric-based age estimation algorithms accuracy.
The company has also been granted notices of allowance from the USPTO for patents titled "Personal Identifiable Information Encoder" and another utility patent for technology enhancing personal identifiable information's security and privacy. These developments are part of Trust Stamp's growing portfolio, which includes 20 allowed and issued patents, with another 13 patents provisional or pending.
In addition, Trust Stamp is looking to enhance data security and privacy across various sectors with its new patents, aligning with privacy regulations like the General Data Protection Regulation (GDPR) and data localization laws. These recent developments and partnerships underscore Trust Stamp's commitment to data privacy, security, and innovation in response to regulatory changes and market demand.
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