T Stamp Inc: Form 10-Q for the period ended Sep 30, 2025

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and the accompanying notes thereto included elsewhere in this Quarterly Report on Form 10-Q and with our audited consolidated financial statements and the accompanying notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2024, as previously filed with the Commission. This discussion contains forward-looking statements based upon current plans, expectations, and beliefs, involving risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements. Our historical results are not necessarily indicative of the results that may be expected for any period in the future.

Overview

Trust Stamp was incorporated under the laws of the State of Delaware on April 11, 2016 as “T Stamp Inc.” T Stamp Inc. and its subsidiaries (“Trust Stamp”, “we”, or the “Company”) develop and market identity authentication software for enterprise and government partners and peer-to-peer markets.

Trust Stamp primarily develops proprietary artificial intelligence-powered solutions, researching and leveraging machine learning artificial intelligence, including computer vision, cryptography, and data mining, to process and protect data and deliver insightful outputs that identify and defend against fraud, protect sensitive user information, facilitate automated processes, and extend the reach of digital services through global accessibility. We utilize the power and agility of technologies such as GPU processing, edge computing, neural networks, and large language models to process and protect data faster and more effectively than historically possible to deliver results at a disruptively low cost for usage across multiple industries.

Our team has substantial expertise in the creation and development of AI-enabled software products. We license our technology and expertise in numerous fields, with an increasing emphasis on addressing diverse markets through established partners who will integrate our technology into field-specific applications.

Over the last year, while maintaining our strong emphasis on identity authentication for financial services, the Company has undertaken a multi-pronged process to position itself better to leverage the growing opportunities offered by the expanded capabilities, use, and acceptance of AI technologies. This process has included:

• Reducing the size of the non-production-focused executive and consulting teams to reduce overhead and releasing sales staff that did not meet their targets.
• Developing joint ventures with proven industry partners with access to target markets
• Increasing focus on the cryptocurrency market (especially Stablecoins) and developing products designed to meet specific needs and opportunities in that sector
• Updating services offered via the Orchestration Layer platform in response to market feedback
• Expanding our IP portfolio to strengthen our existing position related to presentation attack detection and tokenization and include implementations such as:

i. Embedded ownership verification for cryptographic assets, a technology that we believe to have significant potential with the expansion in the ownership of crypto-assets including potential deregulation (or loosening or clarification of regulation) in the United States together with the global growth of stable coins including Central Government Digital Currencies.

ii. A simple user interaction utility called “Shape Overlay” that augments biometric verification and combats deepfakes and injection attacks by having the user interact in real-time with their captured image.

iii.StableKey (or “Stable IT2”) which is a revolutionary technology that generates a “key” directly from the biometric of the user which key has a mathematical correlation to all of the user's passwords, PINS, and other “secrets” for every account and use case meaning that those secrets never need to be stored in their entirety.

iv. A patent for “Interoperable Biometric Representations” that potentially breaks vendor lock-in by allowing users of biometric technologies to compare like-modality templates from different sources.

• Strengthening our international 3rd party cybersecurity and data handling certifications by adding SOC2 certification to our NCSC Cyberessentials Plus certification and obtaining a renewed D-Seal certification (the world’s first certification that includes not just data security but also the ethical and responsible use of data).
• Opening an office in Tokyo (with funding from the City of Tokyo and the Japanese government) to pursue opportunities in the APAC region.
• Participating in the K-Startup Grand Challenge 2025, South Korea’s premier acceleration program for innovative foreign startups. Backed by the Ministry of SMEs and Startups, the program supports high-potential global technology companies in establishing a presence in South Korea and expanding across the broader Asia-Pacific region.
• Establishing go-to-market partnerships with partners in Nigeria and Ghana.

Recent Developments

Warrant Inducement Exercise and Exchange Agreement

On October 31, 2025, the Company entered into a warrant exercise and exchange inducement agreement (the “WEEA”) with a certain institutional investor, pursuant to which the institutional investor agreed to (i) exercise (the “Exercise”) (a) all of the warrants issued to the institutional investor on September 3, 2024, which are exercisable for 413,696 shares of the Company’s common stock, par value $0.01 per share, with a current exercise price of $4.83 per share (the “September 2024 Warrants”) and (b) all of the warrants issued to the institutional investor on January 8, 2025, which are exercisable for 621,303 shares of common stock, with a current exercise price of $8.45 per share (the “January 2025 Warrants” and collectively with the September 2024 Warrants, the “Existing Warrants”); and (ii) exchange all or a portion of the common stock purchase warrants issued to the institutional investor on December 6, 2024, which are exercisable for 648,148 shares of common stock (with a current exercise price of $8.10 per share) (the “December 2024 Warrants”) for New Warrants (as further defined below). As consideration for the Exercise, the Company agreed to (i) reduce the exercise price of all of the Existing Warrants, including any unexercised portion thereof, to $4.20 per share, which is equal to the most recent closing price of the Company’s common stock on the Nasdaq Stock Market prior to the execution of the WEEA; (ii) issue to the institutional investor new unregistered warrants to purchase up to an aggregate of 2,511,044 shares of common stock (equal to 180% of the shares of common stock issued in connection with the Exercise) comprised of (a) “Series A Warrants” to purchase an aggregate of 1,301,945 shares of the Company's common stock and “Series B Warrants” to purchase an aggregate of 1,209,099 shares of the Company's common stock, each with an exercise price of $4.20 per share (collectively, the “New Warrants”) in a private placement pursuant to Section 4(a)(2) of the Securities Act of 1933 (the “Securities Act”); and (iii) exchange all 648,148 of the institutional investor’s December 2024 Warrants for New Warrants to purchase up to a number of shares of common stock equal to 100% of the number of shares issuable upon exercise of the December 2024 Warrants with an exercise price of $4.20 per share.

The New Warrants have substantially the same terms as the Existing Warrants. The terms of the Series A and Series B Warrants that comprise the New Warrants are identical, except that the Series A Warrants provide for additional protections for the holder in the event of a “Fundamental Transaction” while the Series A Warrants are outstanding (which includes, but is not limited to, merger transactions or a sale of substantially all of the Company’s assets). In such an event, then if holders of the Company’s common stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the holder will be given the same choice as to the consideration it receives upon any exercise of either the Series A or Series B Warrants following such Fundamental Transaction. Notwithstanding anything to the contrary, for the Series A Warrants, in the event of a Fundamental Transaction, the holder may require the Company or its successor to repurchase the Series A Warrants for its Black-Scholes Value (as defined in the Series A Warrant) in cash. This right can be exercised concurrently with, or within 30 days following, the consummation or public announcement of the transaction. If the Fundamental Transaction occurs outside the Company’s control, such as in a hostile takeover or an unapproved transaction, the holder is entitled to receive consideration equivalent in type and proportion to that offered to common stockholders, also calculated based on the Black-Scholes model. Additionally, if no consideration is offered to the Company’s stockholders in the transaction, the holder is deemed to receive common stock of the successor entity, preserving the Series A Warrants’ value.

The New Warrants are immediately exercisable upon issuance, and will expire five years thereafter, and in certain circumstances may be exercised on a cashless basis. If we fail for any reason to deliver shares of common stock upon the valid exercise of the New Warrants, subject to our receipt of a valid exercise notice and the aggregate exercise price, by the time period set forth in the New Warrants, we are required to pay the applicable holder, in cash, as liquidated damages as set forth in the New Warrants. The New Warrants also include customary buy-in rights in the event we fail to deliver shares of common stock upon exercise thereof within the time periods set forth in the New Warrants.

The Company agreed to file a resale registration statement on Form S-3 within 30 days of October 31, 2025 with respect to the New Warrants and the shares of common stock issuable upon exercise of the New Warrants. The Existing Warrants and the New Warrants each include a beneficial ownership limitation that prevents the institutional investor from owning more than 9.99%, with respect to the Existing Warrants, and 4.99%, with respect to the New Warrants, of the Company’s outstanding common stock at any time.

Additionally, pursuant to the WEEA, from October 31, 2025 until the 90th day thereafter, the Company is prohibited from effecting or entering into an agreement to effect any issuance by the Company of any common stock of the Company or any common stock equivalents (or a combination of units thereof) involving a Variable Rate Transaction. “Variable Rate Transaction” means a transaction in which the Company (i) issues or sells any debt or equity securities that are convertible into, exchangeable or exercisable for, or include the right to receive, additional shares of the Company’s common stock either (A) at a conversion price, exercise price or exchange rate or other price that is based upon, and/or varies with, the trading prices of or quotations for the shares of the Company’s common stock at any time after the initial issuance of such debt or equity securities or (B) with a conversion, exercise or exchange price that is subject to being reset at some future date after the initial issuance of such debt or equity security or upon the occurrence of specified or contingent events directly or indirectly related to the business of the Company or the market for the Company’s common stock or (ii) enters into, or effects a transaction under, any agreement, including, but not limited to, an equity line of credit or an “at-the-market offering”, whereby the Company may issue securities at a future determined price, regardless of whether shares pursuant to such agreement have actually been issued and regardless of whether such agreement is subsequently canceled. The institutional investor will be entitled to obtain injunctive relief against the Company to preclude any such issuance, which remedy shall be in addition to any right to collect damages.

The gross proceeds to the Company from the Exercise was approximately $4.347 million, prior to deducting warrant inducement agent fees and estimated offering expenses. The Company intends to use the remainder of the net proceeds for business growth, working capital and general corporate purposes. As a result of the Exercise, the Company has 5,243,832 shares of common stock outstanding as of the date of this Current Report on Form 8-K.

Pursuant to an engagement agreement dated October 31, 2025 between the Company and Maxim, Maxim acted as the exclusive warrant solicitation agent and financial advisor to the Company for the Exercise. The Company agreed to pay Maxim an aggregate cash fee of $304,290 in connection with the Exercise.

The offer and resale of the Existing Warrants and shares of common stock underlying the Existing Warrants have been registered pursuant to a registration statement on Form S-1 (File No. 333-284525) with respect to the Existing Warrants and December 2024 Warrants (the “Registration Statements”). The Registration Statement is currently effective for the resale of the shares of common stock issuable upon the exercise of the Existing Warrants.

The WEEA closed on November 3, 2025 resulting in the Company receiving net proceeds of $4,022,706 which includes $2,609,473 for the exercise of the January 2025 Warrants and $1,737,523 for the exercise of the September 2024 Warrants and is net of fees totaling $324,290.

The foregoing descriptions of the WEEA and the New Warrants are not complete and are qualified in their entirety by reference to the full text of the form of WEEA and the form of the Series A and Series B Warrants that comprise the New Warrants, copies of which are filed hereto as Exhibits 10.42, 4.20, and 4.21, respectively, and are incorporated by reference herein.

Repayment of Secured Promissory Note

On July 1, 2025, the Company entered into a Note Purchase Agreement (the “Agreement”), with Streeterville Capital LLC (the “Investor”), pursuant to which the Company issued a Secured Promissory Note (the “Note”) to the Investor in the principal amount of $2,210,000. On October 1, 2025 the Company repaid the secured promissory note in full totaling $2,261,413, including $51,413 of total Interest expense.

The Note carries an original issue discount of $200,000 (the “OID”). In addition, Company agreed to pay $10,000 to the Investor to cover the Investor’s legal fees, accounting costs, due diligence, monitoring and other transaction costs incurred in connection with the purchase and sale of the Note (the “Transaction Expense Amount”). The OID and Transaction Expense Amount were included in the initial principal balance of the Note. The purchase price of the Note, therefore, was $2,000,000, computed as follows: $2,210,000 initial principal balance, less the OID, less the Transaction Expense Amount.

The Note accrues interest at nine percent (9%) per annum and is due and payable on November 1, 2026. The Company may prepay all or a portion of the outstanding principal and interest of the Note at any time. In addition, any time the Company receives any money in connection with any fundraising or financing transaction (including, but not limited to, any warrant exercises, “at the market” financing, equity line of credit or debt financing), it must immediately make a mandatory prepayment to the Investor in an amount equal to the lesser of (a) fifty percent (50%) of the amount raised in such transaction, and (b) the total outstanding balance due under the Note as of the closing date of such financing, payable within two (2) trading days of receiving such amount.

Further, beginning on March 1, 2026 (the “Redemption Start Date), the Investor has the right, in its sole discretion, to redeem up to a specified maximum monthly amount due under the Note by delivering one or more written redemption notices to the Company. Upon receipt of a redemption notice, the Company is required to pay the applicable redemption amount plus an Exit Fee (as defined further below) in cash within two trading days. If, by the end of any month following the redemption start date, the Company has not reduced the outstanding balance by at least the maximum monthly redemption amount, the Company must pay the shortfall (plus the Exit Fee) in cash by the fifth day of the following month. Failure to do so will result in an automatic increase of the outstanding balance by 1% as of such date. Mandatory prepayments do not satisfy the Company’s redemption obligations under this provision.

All payments made under this Note after the Redemption Start Date (including, but not limited to, repayment of the Note at maturity or thereafter) will be subject to an exit fee of seven percent (7%) of the portion of the outstanding balance being repaid (the “Exit Fee”).

The Note includes customary default trigger events, including, among others: (i) failure by the Company to timely make payments due under the Note; (ii) bankruptcy or insolvency events involving the Company; (iii) the execution or consummation of a Fundamental Transaction (i.e. a merger, sale of all or substantially all assets, change of control, recapitalization, or other business combination or restructuring involving the Company or its subsidiaries that results in a change in voting power or asset ownership without full repayment of the Note); (iv) breaches of covenants or other agreements in the Note or related transaction documents; (v) material misstatements of representations or warranties; and (vi) entry of certain judgments against the Company or certain adverse proxy activity. Upon the occurrence of a trigger event, the Investor may elect to increase the outstanding balance of the Note or require the Company to cure the event within five trading days. If uncured, the trigger event becomes an event of default. Upon an event of default, the Investor may accelerate the Note, making the outstanding balance immediately due and payable at the “Mandatory Default Amount,” and interest will begin accruing at a default interest rate of 22% per annum (or the maximum rate permitted by law). Certain insolvency-related trigger events result in an automatic default and acceleration without notice. The Note also includes a waiver of offset and counterclaim rights by the Company.

The Company’s obligations under the Note are secured by: (i) all of Company’s assets (as further described in the related Security Agreement between the Company and the Investor filed as Exhibit 10.39 to this Quarterly Report and (ii) the Company’s intellectual property (as further described in the related Intellectual Property Security Agreement between the Company and the Investor filed as Exhibit 10.40 to this Quarterly Report).

The foregoing is intended to be a summary of the Note Purchase Agreement, the Note, the Security Agreement, and Intellectual Property Security Agreement, and is qualified by reference to each of these documents which are filed as Exhibits 10.37, 10.38, 10.39, and 10.40 to this Quarterly Report.

Equity Distribution Agreement with Maxim

On February 25, 2025, the Company entered into an Equity Distribution Agreement (the “Agreement”), with Maxim Group LLC (“Maxim”), pursuant to which the Company may offer and sell, from time to time, through Maxim, as sales agent or principal, shares of its common stock, $0.01 par value per share (the “Common Stock”).

Subject to the terms and conditions of the Agreement, Maxim will use commercially reasonable efforts consistent with its normal trading and sales practices, applicable state and federal law, rules and regulations and the rules of the Nasdaq Capital Market to sell shares of the Company’s Common Stock from time to time based upon the Company’s instructions, including any minimum price, time or size limits specified by the Company. Under the Agreement, Maxim may sell shares by any method deemed to be an “at the market” offering as defined in Rule 415 under the U.S. Securities Act of 1933, as amended (the “Securities Act”), or any other method permitted by law, including in privately negotiated transactions. Maxim’s obligations to sell shares under the Agreement are subject to satisfaction of certain conditions, including customary closing conditions for transactions of this nature. The Company will pay Maxim a commission of 3.0% of the aggregate gross proceeds from each sale of shares and has agreed to reimburse Maxim for certain specified expenses of up to $40,000, aggregate, in addition to up to $3,000 quarterly for the Maxim’s counsel’s fees and any incidental expenses to be reimbursed by us. We have agreed to provide indemnification and contribution to Maxim against certain civil liabilities, including liabilities under the Securities Act.

The Company is not obligated to make any sales of its Common Stock under the Agreement and no assurance can be given that the Company will sell any shares under the Agreement, or, if it does, as to the price or amount of shares that the Company will sell, or the dates on which any such sales will take place. The Agreement will terminate upon the earlier of (i) the sale of all shares having an aggregate offering price of $6,196,000 pursuant to the Agreement, (ii) twelve (12) months from the date of the Agreement, (iii) mutual termination by both Maxim and the Company upon the provision of fifteen (15) days written notice, and (iv) termination of the Agreement as otherwise permitted therein.

Sales of shares of Common Stock under the Agreement will be made pursuant to the Company’s effective registration statement on Form S-3 (Registration No. 333-271091) (the “Registration Statement”) which was declared effective April 12, 2023 and a related prospectus supplement which was filed with the U.S. Securities and Exchange Commission (the “SEC”) on February 25, 2025 (the “ATM Prospectus”). The ATM Prospectus relates to the offering of up to $6,196,000 worth of shares of the Company’s Common Stock from time to time. The issuance and sale, if any, of Common Stock under the Agreement is subject to the effectiveness of the Registration Statement and “baby shelf” limitations under General Instruction I.B.6. of Form S-3.

The foregoing summary of the Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Agreement, which was filed as Exhibit 1.1 to the Company's Current Report on Form 8-K filed with the SEC on February 26, 2025.

As of the date of this Quarterly Report, the Company has made sales of 1,713,543 shares of Common Stock under the Registration Statement for proceeds of $6,010,116, net of issuance costs.

Appointment of New Chief Financial Officer

On January 17, 2025, the Board of Directors of the Company appointed Lance Wilson as the Company’s new Chief Financial Officer ("CFO"), to fill the vacancy in the position left after Alex Valdes’s resignation as Chief Financial Officer effective January 2, 2025.

Lance Wilson, a licensed Certified Public Accountant in Georgia, first joined the Company in 2021, serving in various financial capacities, most recently as the Senior Vice President of Accounting & Finance at Trust Stamp from July 2024 until being appointed to his role as CFO. Lance leads all external financial reporting, including SEC filings and technical accounting research and implementation. Lance has played a key role in multiple initiatives, including a successful public fundraising campaign that resulted in Trust Stamp’s NASDAQ listing in January 2022.

Prior to joining Trust Stamp, Lance served as the Financial Reporting Manager at Cousins Properties (NYSE: CUZ) from July 2020 to July 2021, where he managed all SEC filings, technical accounting projects, and audit engagements. Prior to that, he served in various accounting roles at The North Highland Company, Change Healthcare (formerly McKesson Technology Solutions), and BDO-USA, LLC. Lance holds a Master of Accountancy degree and a Bachelor of Science in Commerce and Business Administration from The University of Alabama.

Lance Wilson has no family relationships with any other director, executive officer, or person nominated or chosen by the Company to become a director or executive officer.

Lance Wilson and the Company entered into an Executive Employment Agreement (the “Agreement”), with an effective date of January 1, 2025, for his role as Chief Financial Officer (CFO) of the Company. The Agreement outlines Mr. Wilson’s ongoing responsibilities, including oversight of the Company’s financial integrity, regulatory compliance, and multicurrency financial reporting. It also details his leadership in investor relations and compliance with applicable SEC, Nasdaq, and Sarbanes-Oxley requirements.

Under the Agreement, Mr. Wilson will receive an annual base salary of $182,250, subject to periodic review, and will be eligible for an annual equity bonus of at least 10% of his base salary in the form of restricted stock units. The Agreement also includes provisions for reimbursement of business expenses, participation in Company benefit plans, and relocation assistance if applicable.

The Agreement has an open-ended term, continuing until either party provides 120 days’ written notice of termination. It also specifies termination provisions, including compensation and in the event of termination by the Company without cause or by Mr. Wilson for good reason, such as severance equal to up to 36 months of base salary and accelerated vesting of equity awards in certain circumstances, including a change in control. Termination for cause or voluntary resignation without good reason would result in payment of only accrued compensation and benefits through the termination date.

The Agreement contains customary confidentiality and non-disclosure provisions related to the Company’s trade secrets and other sensitive information.

The foregoing description of the Agreement is intended to be a summary, and is qualified in its entirety by reference to the Agreement itself, a copy of which was filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the SEC on January 21, 2025.

Securities Purchase Agreement dated January 6, 2025

On January 6, 2025, the Company entered into a securities purchase agreement (the “January 2025 SPA”) with an institutional investor (the “Selling Stockholder”), pursuant to which the Company agreed to issue and sell to the Selling Stockholder (i) in a registered direct offering, (a) 175,000 shares of Class A Common Stock (the “January 2025 Shares”); and (b) Pre-Funded Warrants (the "January 2025 Pre-Funded Warrants") to purchase 239,202 shares of the Company’s Class A Common Stock at an exercise price of $0.001 per share and (ii) in a concurrent private placement, common stock purchase warrants consisting of Series A common warrants exercisable for up to 414,202 shares of Class A Common Stock at an exercise price of $8.45 per share of Class A Common Stock (the “January 2025 Series A Warrants”), and Series B common warrants exercisable for up to 207,101 shares of Class A Common Stock at an exercise price of $8.45 per share (the “January 2025 Series B Warrants”, and collectively with the January 2025 Series A Warrants, the “January 2025 Private Placement Warrants”). The offering price per January 2025 Share and respective January 2025 Private Placement Warrants was $8.45, and the offering price per Pre-Funded Warrant was $8.449.

The securities to be issued in the registered direct offering were offered pursuant to the Company’s shelf registration statement on Form S-3 (File 333-271091) (the “Shelf Registration Statement”), initially filed by the Company with the SEC under the Securities Act on April 3, 2023 and declared effective on April 12, 2023. The January 2025 Pre-Funded Warrants are immediately exercisable upon issuance and will remain exercisable until all of the January 2025 Pre-Funded Warrants are exercised in full.

The January 2025 Private Placement Warrants (and the shares of Class A Common Stock issuable upon the exercise of the January 2025 Private Placement Warrants) were not registered under the Securities Act, and were offered pursuant to an exemption from the registration requirements of the Securities Act provided under Section 4(a)(2) of the Securities Act and/or Rule 506 of Regulation D promulgated under the Securities Act.

The terms of the Series A and January 2025 Series B Warrants that comprise the January 2025 Private Placement Warrants are identical, except that the January 2025 Series A Warrants provide for additional protections for the Selling Stockholder in the event of a “Fundamental Transaction” while the January 2025 Series A Warrants are outstanding (which includes, but is not limited to, merger transactions or a sale of substantially all of the Company’s assets). In such an event, then if holders of the Company’s Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Selling Stockholder will be given the same choice as to the consideration it receives upon any exercise of either the Series A or January 2025 Series B Warrants following such Fundamental Transaction. Notwithstanding anything to the contrary, for the January 2025 Series A Warrants, in the event of a Fundamental Transaction, the Selling Stockholder may require the Company or its successor to repurchase the January 2025 Series A Warrants for its Black-Scholes Value (as defined in the Series A Warrant) in cash. This right can be exercised concurrently with, or within 30 days following, the consummation or public announcement of the transaction. If the Fundamental Transaction occurs outside the Company’s control, such as in a hostile takeover or an unapproved transaction, the holder is entitled to receive consideration equivalent in type and proportion to that offered to common stockholders, also calculated based on the Black-Scholes model. Additionally, if no consideration is offered to the Company’s stockholders in the transaction, the holder is deemed to receive common stock of the successor entity, preserving the January 2025 Series A Warrants’ value.

The January 2025 Private Placement Warrants are immediately exercisable upon issuance, and will expire five years thereafter, and in certain circumstances may be exercised on a cashless basis. If we fail for any reason to deliver shares of Class A Common Stock upon the valid exercise of the January 2025 Private Placement Warrants, subject to our receipt of a valid exercise notice and the aggregate exercise price, by the time period set forth in the January 2025 Private Placement Warrants, we are required to pay the applicable holder, in cash, as liquidated damages as set forth in the January 2025 Private Placement Warrants. The January 2025 Pre-Funded Warrants and January 2025 Private Placement Warrants also include customary buy-in rights in the event we fail to deliver shares of common stock upon exercise thereof within the time periods set forth in the January 2025 Pre-Funded Warrants and January 2025 Private Placement Warrants.

On January 8, 2025, the Company closed the registered direct offering and the private placement offering (collectively, the “January 2025 Offering”), raising gross proceeds of approximately $3.50 million before deducting placement agent fees and other offering expenses payable by the Company. In the event that all January 2025 Private Placement Warrants are exercised for cash, the Company will receive additional gross proceeds of approximately $5,250,250. The Company’s primary use of the net proceeds will be for working capital, capital expenditures and other general corporate purposes.

Pursuant to the terms of the January 2025 SPA, the Company is required within 30 days of January 6, 2025 to file a registration statement on Form S-1 or other appropriate form if the Company is not then S-1 eligible registering the resale of the shares of Class A Common Stock issued and issuable upon the exercise of the January 2025 Private Placement Warrants. The Company is required to use commercially reasonable efforts to cause such registration to become effective within 91 days of the closing of the January 2025 Offering, and to keep the registration statement effective at all times until no investor owns any January 2025 Private Placement Warrants or shares issuable upon exercise thereof.

Pursuant to the terms of the January 2025 SPA, from January 6, 2025 until 30 days after closing, subject to certain exceptions, we may not issue, enter into any agreement to issue or announce the issuance or proposed issuance of any shares of common stock or common stock equivalents, or file any registration statement or any amendment or supplement thereto, other than a prospectus supplement for the Shelf Registration Statement. In addition, from January 6, 2025 until 45 days after closing, we are prohibited from effecting or entering into an agreement to effect any issuance of common stock or common stock equivalents involving a variable rate transaction (as defined in the January 2025 SPA).

The foregoing description of the January 2025 SPA, January 2025 Pre-Funded Warrants, January 2025 Series A Warrants, and January 2025 Series B Warrants is intended to be a summary, and is qualified by reference to the full text of each of these documents, which were filed as exhibits 10.1, 4.1, 4.2, and 4.3, respectively to the Company's Current Report on Form 8-K filed with the SEC on January 10, 2025.

Markets

Trust Stamp has evaluated the market potential for its services in part by reviewing the following reports, articles, and data sources, none of which were commissioned by the Company, and none of which are to be incorporated by reference:

Data Security and Fraud

• In 2024 alone, numerous large-scale cybersecurity incidents resulted in the exposure of billions of personal records worldwide, including the so-called “Mother of All Breaches” involving over 26 billion records aggregated from multiple prior breaches, a breach of National Public Data affecting approximately 2.9 billion records including Social Security numbers, and significant compromises at major organizations such as Dell (49 million customer records), Twilio (33 million phone numbers), and Roll20 (15 million accounts). The U.S. healthcare sector alone reported 14 breaches each affecting over one million individuals, impacting an estimated 238 million

residents, while other notable incidents included data exfiltration from Kadokawa/Niconico in Japan, a 1.2-terabyte leak of Disney internal communications, and widespread mobile app exposures affecting over 1.7 billion users. These breaches underscore persistent systemic vulnerabilities across industries and geographies, with material legal, operational, and reputational risks.

• In 2024, global losses from payment card fraud alone reached approximately $33.8 billion, surpassing the previous year’s figures and driven by escalating card‑not‑present and e‑commerce fraud. In the broader digital payments sphere, including ACH, digital wallets, BNPL, and e‑commerce, the Merchant Risk Council estimates merchants lose about 3.2 % of annual e‑commerce revenue to fraud, while Juniper Research forecasts online payment fraud losses totaling $362 billion globally by 2028, encompassing all payment channels. Furthermore, McKinsey projects $400 billion in cumulative card fraud losses over the next ten years, with authorized push payment fraud growing at an 11 % CAGR through 2027. Taken together, these figures underscore a mounting global financial liability from payment fraud that is poised to climb steadily unless countered by effective prevention strategies.

Financial and Societal Inclusion

• According to the “Global Findex Database 2021,” published by the World Bank, 1.4 billion people were unbanked as of 2021.
• 131 million small and medium-sized enterprises in emerging markets lack access to finance, limiting their ability to grow and thrive (UNSGSA Financial Inclusion Webpage, Accessed March 2023).
• The global market for Microfinance is estimated at $250.4 billion in the year 2024, and is projected to reach $506 billion by 2030 according to the 2025 report titled “Microfinance - Global Market Trajectory & Analytics” published by Global Industry Analysts, Inc. To accelerate our work in this market, the Company has joined the Mastercard Lighthouse MASSIV program designed to empower sustainability and social impact through strategic partnerships aiming to assist participants to scale on a global level.

Trust Stamp’s biometric authentication, liveness detection, and information tokenization enable individuals to verify and establish their identities using data derived from biometrics. While individuals in this market lack traditional means of identity verification, Trust Stamp provides a means to authenticate identity that preserves an individual’s privacy and control over that identity.

Alternatives to Detention (“ATD”)

• The ATD market includes Federal, State, and Municipal agencies for both criminal justice and immigration purposes. Trust Stamp addresses the ATD market with applications built on Trust Stamp’s privacy-preserving solutions allowing individuals to comply with ATD requirements using ethical and humane technology methodologies. Trust Stamp has developed innovative patented technologies for use in the ATD market encompassing biometrics, geolocation, and tokenization as well as a proprietary, tamper-resistant, battery-free “Tap-In-Band” that can complement or replace biometric check-in requirements and provide a lower-cost and more humane alternative to traditional “ankle bracelet” technology.
• In December 2024, we announced a go-to-market agreement with a leading provider of software solutions to the U.S. Federal Government. Based on the priorities of the current administration and express funding provision in the 2026 appropriations bill, the Company and its partner are actively communicating with the government on opportunities to implement the Company’s technology for identified and funded needs.

Stablecoins and other Cryptocurrencies

• As of mid-2025, the total stablecoin market capitalization sits around $170 billion, with sources varying between $160 billion and $200 billion depending on which coins are included. Tether (USDT) still dominates the pack, with other major players like USDC, BUSD, and DAI following behind. Analysts project the market cap of stablecoins to double to around $300–400 billion by 2030, driven by incremental adoption in payments and DeFi. Predicting this growth, the Company invested in developing and patenting technologies that it believes to be important assets to participate in the stablecoin and other cryptocurrency markets, including a patent related to embedding identity data in the metadata of cryptographic tokens and the trademark “StableKey”. The Company

anticipates cryptocurrencies playing a growing role in its customer base in parallel to, and in some cases involving, its traditional financial services customers.

• The Company anticipates launching a biometrically secured proprietary non-custodial software wallet in January 2026 which will be able to function as both a wallet directly managing access credentials for digital assets and as a “wallet of wallets”. The wallet will be offered directly to end-users and financial institutions.

Other Markets

The Company is developing products and working with partners and industry organizations in other sectors that offer significant market opportunities for our existing and pipeline IP. We anticipate licensing our technology in numerous fields, typically through established partners who will integrate our technology into field-specific applications.

Africa

The African Continental Free Trade Area (AfCFTA) is a landmark agreement that binds 54 African nations and an estimated 1.47 billion people into the world’s largest free trade area. AfCFTA has significant economic potential for Africa, as it aims to create a single market for goods and services across 55 countries, representing over 1.3 billion people with a combined GDP of approximately $3.4 trillion. By reducing trade barriers, the agreement could contribute an additional $450 billion to Africa’s GDP by 2035, lifting 30 million people out of extreme poverty and increasing the incomes of 68 million people, according to the World Bank. Over the next decade, Africa’s share of the world population is projected to reach 21%, up from 13% in 2000. More than 50% of young people entering the workforce will be in sub-Saharan Africa. By 2050, the region’s working-age population will still be rising while it is falling virtually everywhere else, and Africa will be home to an estimated 2.5 billion people, or 25% of all humanity.

Globally, 850 million people did not have identity documents in 2023, with 542 million in Africa. Of that 542 million, 95 million are children who have never had their birth recorded, and 120 million are children without a birth certificate. The single initiative of implementing universal tokenized identity in African countries has the potential to significantly boost the implementing countries' economies. According to the United Nations Economic Commission for Africa (UNECA), countries adopting digital ID programs could unlock economic value equivalent to 3% and 13% of their GDP by 2030.

A transition to digital records for births, marriages, deaths, and electronic identity documents represents a transformative opportunity for developing nations and builds a foundation for economic growth. Establishing a robust digital infrastructure for vital records enhances administrative efficiency, fosters inclusive development, strengthens governance, and unlocks economic potential. Yet, developing African countries are often unable or unwilling to fund the initial capital expenditure required to make the transition.

Trust Stamp has participated in financial inclusion projects in Africa for a number of years through Mastercard’s implementation of our technology and we established a regional R&D center in Rwanda in 2021 to focus on ensuring equity in the development and implementation of biometric technology in Africa. In 2023 we started direct outreach to African countries and we are in serious and extended dialog with four countries as well as negotiating a pilot with Africa’s largest provider of mobile telecommunications services. Projects under discussion with pan-African organizations and/or one or more countries include:

• A pan-African import-export logistics platform
• A national digital identity card
• Digital land registries in three countries
• A blockchain-based register of real estate professionals and transaction
• A blockchain-based registry of fire inspections and certifications
• Asset tokenization and trading

With the assistance of the Mastercard Lighthouse MASSIV program, we intend to build upon this work to maximize the opportunities to meet the critical need for secure identity programs for both governments and NGOs and have established go-to-market focused agreements with partners in Nigeria and Ghana.

Principal Products and Services

We adhere to the best practices outlined in the National Institute of Standards and Technology (“NIST”) and International Organization for Standardization (“ISO”) frameworks, and our policies and procedures in managing personally identifiable information (“PII”) comply with General Data Protection Regulation (“GDPR”) requirements wherever such requirements are applicable.

Key Customers

The Company’s initial business consisted of developing proprietary privacy-first identity solutions and implementing them through custom applications built and maintained for a few key customers. In the fourth quarter of 2022, the Company added to its product offerings a modular SaaS model intended for low-code or no-code implementation (“the Orchestration Layer”). The Orchestration Layer has been successful in attracting interested customers with over sixty financial institutions onboarded as of the date of this report, but those institutions have been slow to go into full production which has impacted revenue expectations. An analysis of the slow adoption revealed that many of the institutions would need some level of customization, and in the fourth quarter of 2024 and the first quarter of 2025, the Company invested in the modification of the modules to meet the broader range of needs and preferences identified by the enrolled institutions. The Company is now seeing a growth in transaction volumes and is focused on maintaining and accelerating that growth.

Historically, the Company generated most of its income through two long-term partnerships, comprising a relationship with an S&P 500 bank and a relationship with Mastercard International (“Mastercard”) with the Mastercard partnership diminishing in significance over 2024 and YTD as Mastercard’s market focus changed.

Effective June 1, 2025, the Company's agreement with the S&P 500 bank was extended to May 31, 2031, subject to either party having the right to terminate for cause and a right for the customer to cancel for convenience on giving 6 months' notice.

Under the terms of the extension, the Company receives a guaranteed minimum income stream for services, together with hosting and other fees and reimbursement of expenses incurred, which are subject to agreed markups of 10% or 20%. Minimum billing for services in the 1st year of the renewal is set at $154,000 per month with annual CPI-related increases. Under the arrangement, total minimum monthly billings will exceed $215,000 per month, subject to CPI-related increases. Based on the strength of the relationship and anticipated service needs, the Company anticipates annual billings exceeding the agreed minimum.

In March 2019, the Company entered into a technology services agreement with Mastercard International (the "TSA”). The Company has been paid to develop and host software solutions utilizing the IT2 and to support Mastercard’s implementations. Based on a changing market focus by Mastercard, effective December 31, 2024, a limited exclusivity for development-related purposes granted to Mastercard expired and the Software Schedule and associated services will terminate on February 6, 2026. As a consequence of these events, the Company is in discussions with potential customers that it was previously prohibited from contracting with directly.

In 2022, the Company expanded its key customer base to include a relationship with FIS, a relationship-focused upon the implementation of our Orchestration Layer and underlying technologies in FIS’ Global KYC product offering.

The Orchestration Layer is a low-code platform that is designed to be a one-stop shop for Trust Stamp services and provides easy integration to our products; chargeable on a per-use basis. The Orchestration Layer utilizes the Company’s next-generation identity package, offering rapid deployment across devices and platforms, with custom workflows that seamlessly orchestrate trust across the identity lifecycle for a consistent user experience in processes for onboarding and KYC/AML, multi-factor authentication, account recovery, fraud prevention, compliance, and more. The Orchestration Layer facilitates no-code and low-code implementations of the Company’s technology making adoption and updating faster and cost-effective for a broader range of potential customers.

As of September 30, 2025, a total of 95 financial institutions with over $348 billion in assets have been onboarded via FIS, bringing the total number of (FIS and non-FIS) customers either fully implemented or currently implementing the Orchestration Layer to 108.

The first (non-FIS) client onboarded to the Orchestration Layer in the third quarter of 2022 has generated $543 thousand of revenue for the Company to date, including $118 thousand during the nine months ended September 30, 2025.

On February 20, 2025, the Company executed a Master Technology Service Agreement ("MTSA") (effective January 1, 2025) with QID Technologies LLC (“QID”) to provide technical services as agreed from time to time and documented by statements of work. The MTSA provided for an initial minimum payment of $100,000 per calendar month, with the budgeted payment thereafter not to exceed $300,000 per month without mutual agreement. The Company owns a 10% equity interest in QID but is not involved in its management. Reaching the maximum monthly revenue of $300,000 would require QID ramping up its customer-facing activities, a process that is not controlled by the Company. At this time, the ramp-up process has taken longer than anticipated, and despite assurances by QID’s majority owner as to their ongoing commitment to the enterprise, there is no certainty as to the speed at which the services will be delivered and consequently the billing levels in a given month.

Key Business Measures

In addition to the measures presented in our unaudited condensed consolidated financial statements, we use the following key non-GAAP business measures to help us evaluate our business, identify trends affecting our business, formulate business plans and financial projections, and make strategic decisions.

Adjusted EBITDA

This discussion includes information about Adjusted EBITDA that is not prepared in accordance with U.S. GAAP. Adjusted EBITDA is not based on any standardized methodology prescribed by U.S. GAAP and is not necessarily comparable to similar measures presented by other companies. A reconciliation of this non-GAAP measure is included below.

Adjusted EBITDA is a non-GAAP financial measure that represents U.S. GAAP net income (loss) adjusted to exclude (1) other expense, (2) other income, (3) interest expense, net, (4) stock-based compensation, (5) change in fair value of warrant liabilities, (8) impairment loss of assets, (10) depreciation, and (11) certain other items management believes affect the comparability of operating results.

Management believes that Adjusted EBITDA, when viewed with our results under U.S. GAAP and the accompanying reconciliations, provides useful information about our period-over-period results. Adjusted EBITDA is presented because management believes it provides additional information with respect to the performance of our fundamental business activities and is also frequently used by securities analysts, investors and other interested parties in the evaluation of comparable companies. We also rely on Adjusted EBITDA as a primary measure to review and assess the operating performance of our Company and our management, and it will be a focus as we invest in and grow the business.

Adjusted EBITDA has limitations as an analytical tool and should not be considered in isolation from, or as a substitute for, analysis of our results as reported under GAAP. Some of these limitations are:

• Adjusted EBITDA does not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments.
• Adjusted EBITDA does not reflect changes in, or cash requirements for our working capital needs.
• Although Depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and Adjusted EBITDA does not reflect any cash requirements for such replacements.
• Adjusted EBITDA does not include the impact of certain charges or gains resulting from matters we consider not to be indicative of our ongoing operations.

Due to these limitations, Adjusted EBITDA should not be considered as a measure of discretionary cash available to us to invest in the growth of our business. We compensate for these limitations by relying primarily on our U.S. GAAP results and using Adjusted EBITDA only as a supplement to our U.S. GAAP results.

Reconciliation of Net Income (Loss) to Adjusted EBITDA

Adjusted EBITDA loss (non-GAAP) for the three months ended September 30, 2025, decreased by 42.25%, to a $1.24 million loss from a $2.14 million loss for the three months ended September 30, 2024. The overall decrease of $905 thousand in Adjusted EBITDA loss (non-GAAP) was driven by three transactions that occurred during the three months ended September 30, 2024 with no similar transactions occurring during the three months ended September 30, 2025. The most significant of these transactions was the Company signing a license agreement with Boumarang valued at $5.00 million that was accounted for as "other income" during the three months ended September 30, 2024. The $5.00 million other income was partially offset during the three months ended September 30, 2024 by other expense including a $1.17 million loss related to the difference in the cash paid for the warrants and the FMV of the warrants issued on September 3, 2024 and a loss of $360 thousand related to the difference in the cash paid for the warrants and the FMV of the warrants issued on September 10, 2024.

In addition to the variances above, the Company had a decrease of $673 thousand in Selling, general, and administrative expenses during the three months ended September 30, 2025 when compared to the three months ended September 30, 2024. This decrease in Selling, general and administrative expenses was primarily driven by a reduction in salaries and compensation, including stock-based compensation, which decreased by 33% from the three months ended September 30, 2024. The salaries and compensation expenses decreased due to reductions in sales teams and the departure of certain members of the Company's management. Furthermore, the Company had an increase in Net revenue during the three months ended September 30, 2025 of $361 thousand when compared to the three months ended September 30, 2024 primarily due to the Company entering a new contract amendment with the S&P 500 bank as of July 1, 2025 extending services through May 31, 2031 with minimum gross revenue exceeding $12.7 million over the balance of the contract term. The new contract amendment drove a $313 thousand increase in revenue during the three months ended September 30, 2025.

Adjusted EBITDA loss (non-GAAP) for the nine months ended September 30, 2025, decreased by 35.26%, to a $4.30 million loss from a $6.65 million loss for the nine months ended September 30, 2024. The overall decrease in Adjusted EBITDA loss (non-GAAP) of $2.34 million was driven by three transactions that occurred during the three months ended September 30, 2024 with no similar transactions occurring during the three months ended September 30, 2025. The most significant of these transactions was the Company signing a license agreement with Boumarang valued at $5.00 million, which was accounted for as "other income" during the three months ended September 30, 2024. The $5.00 million other income was partially offset during the three months ended September 30, 2024 by other expense including a $1.17 million loss related to the difference in the cash paid for the warrants and the FMV of the warrants issued on September 3, 2024 and a loss of $360 thousand related to the difference in the cash paid for the warrants and the FMV of the warrants issued on September 10, 2024.

In addition to the variances above, the Company had a decrease of $2.08 million in Selling, general, and administrative expenses when comparing the nine months ended September 30, 2025 to the nine months ended September 30, 2024. This decrease in Selling, general and administrative expenses was primarily driven by a reduction of $1.61 million in salaries and compensation, including stock-based compensation, which decreased by 36% from the nine months ended September 30, 2024. The salaries and compensation expenses decreased due to reductions in sales teams and the departure of certain members of the Company's management. Furthermore, the Company had an increase in Net revenue during the three months ended September 30, 2025 of $645 thousand when compared to the three months ended September 30, 2024 due to the Company entering a new contract amendment with the S&P 500 bank and a new Statement of Work effective on January 1, 2025 under the Master Technology Services Agreement between the Company (through its subsidiary, Trust Stamp Malta Ltd.) and QID. The new amendment with the S&P 500 bank was effective as of July 1, 2025 and extends services through May 31, 2031 with minimum gross revenue exceeding $12.7 million over the balance of the contract term. The new contract amendment drove a $420 thousand increase in revenue during the three months ended September 30, 2025. The new Statement of Work with QID provides for service fees payable to the Company of a minimum $100,000 per month during the first six months, and up to $300,000 per month thereafter. In accordance with ASC 606 guidance, the Company recognized $408 thousand in revenue from the Statement of Work with QID during the nine months ended September 30, 2025 and has recorded $225 thousand to Deferred revenue as of September 30, 2025.

Results of Operations

The following table summarizes our unaudited condensed consolidated statements of operations for the three and nine months ended September 30, 2025 and 2024:

(*) Adjusted retroactively for reverse stock splits, see Note 1.

Comparison of the Three Months Ended September 30, 2025 and 2024

Net revenue

During the three months ended September 30, 2025, Net revenue increased to $872 thousand, or an 70.71% increase from the Net revenue of $511 thousand for the three months ended September 30, 2024. During the three months ended September 30, 2025, the $872 thousand in Net revenue consisted of $652 thousand from an S&P 500 bank, $69 thousand from the Statement of Works under the Master Technology Services Agreement with QID, $43 thousand from FIS, $40 thousand from a software development company, $34 thousand from Mastercard, $29 thousand from a computer programming company, and various other customers for the remaining $4 thousand.

During the three months ended September 30, 2025 the Net revenue increased by $361 thousand compared to the three months ended September 30, 2024. Of this increase, $313 thousand was attributable to the Company's S&P 500 bank customer resulting from the Company entering into a contract amendment with this customer. The amendment extended the term of the existing agreement until May 31, 2031, with minimum gross revenue exceeding $12.7 million. It provides for changes to the fee structure as well as a new feature development and platform updates.

Another factor increasing Net revenue was the Statement of Works under the Master Technology Services Agreement with QID effective on January 1, 2025. The Company provided services to QID of $100 thousand per month from January 2025 - June 2025 which was the maximum allowed under the agreement. Starting in July 2025, the agreement allows for billing up to $300 thousand per month thereafter, which the Company did not reach during the three months ended September 30, 2025 due to delays in customer implementation. Revenue is recognized in accordance with ASC 606 using the cost incurred input method, which aligns revenue recognition with the proportion of costs incurred relative to total expected costs for the contract. This resulted in the recognition of $69 thousand of billed revenue during the three months ended September 30, 2025.

The Company also had an increase of $27 thousand in Net revenue during the three months ended September 30, 2025 resulting from increased services provided to a computer programming company, as the customer continues to ramp up their Orchestration Layer usage.

The increases to Net revenue were partially offset by an amendment to the Mastercard agreement executed in February 2025 that reduced fixed monthly license fees. As a result, during the three months ended September 30, 2025, the Company recognized $30 thousand for software license fees and $4 thousand for other services, meanwhile, during the three months ended September 30, 2024 the Company recognized $86 thousand for software license fees and $4 thousand for other services.

Cost of services

Cost of services (“COS”) increased by $108 thousand or 42.32% for the three months ended September 30, 2025, compared to the three months ended September 30, 2024. The increase in COS during the three months ended September 30, 2025 was primarily driven by a $44 thousand increase in internal developer costs and due to increased service requests by our S&P 500 bank customer as a result of the Company entering into a contract amendment with the customer. The Company also recorded a $25 thousand increase in web services costs primarily due to higher costs related to the Orchestration Layer including expansion of services for a new region, increased S&P 500 bank usage, and increased third party vendor expense. Additionally, there was a $24 thousand increase in COS due to increased usage of driver license validations under our existing contract with the S&P 500 bank. The remaining variance primarily relates to an increase of $12 thousand in stock-based compensation award expense during the three months ended September 30, 2025 compared to the three months ended September 30, 2024 due to increased internal developer costs allocated to COS and increase in internal developer's stock-based compensation award expense resulting from the increase in the fair value of stock-based compensation awards on the award date.

Research and development

Research and development (“R&D”) expenses increased by $6 thousand, or 1.01% for the three months ended September 30, 2025, compared to the three months ended September 30, 2024. The increase in R&D expense during the three months ended September 30, 2025 was primarily driven by a $42 thousand increase in internal developer's stock-based compensation award expense resulting from the increase in the fair value of stock-based compensation awards on the award date.

This increase was partially offset by a decrease of $32 thousand during the three months ended September 30, 2025 as compared to the three months ended September 30, 2024, driven by the reallocation of R&D salaries to COS due expansion of customer services as described above. In addition, there was a decrease in outsourced software development with 10Clouds during the three months ended September 30, 2025 as the Company continued to transition this work internally which results in cost savings as internal work is more cost effective. Outsourced software development costs decreased by 100% when comparing the three months ended September 30, 2025 to the three months ended September 30, 2024. In both periods, R&D expenses were related to R&D payroll and other R&D compensation expenses.

Selling, general, and administrative

Selling, general, and administrative expense (“SG&A”) decreased by $673 thousand, or 30.82%, for the three months ended September 30, 2025, compared to the three months ended September 30, 2024. The decrease in SG&A expense was driven by a $467 thousand decrease in salaries, stock-based compensation, payroll costs, and sales commissions during the three months ended September 30, 2025 compared to the prior period. The $467 thousand decrease includes a $74 thousand reduction in stock-based compensation awards during the three months ended September 30, 2025. The decrease in salaries, stock-based compensation, payroll costs, and sales commissions is a result of reductions to the sales team, from 9 team members employed during the three months ended September 30, 2024 to no team members during the three months ended September 30, 2025. In addition, the EVP of Mergers and Acquisitions left the Company in December 2024 and was not subsequently replaced and the CFO role was vacated in January 2025 and filled internally leaving a vacant role that was not subsequently replaced.

The Company also incurred a $247 thousand decrease in external IT services, rent, accounting and audit fees, taxes, travel costs, and other operating expenses during the three months ended September 30, 2025 compared to the three months ended September 30, 2024, mainly due to cost cutting measures taken by management.

The decreases in SG&A were partially offset by increases for legal and professional, dues and subscription, educational and marketing amounting to $42 thousand for the three months ended September 30, 2025.

Depreciation and amortization

Depreciation and amortization (“D&A”) increased by $14 thousand, or 7.96% for the three months ended September 30, 2025, compared to the three months ended September 30, 2024. The primary driver for the increase in D&A is due to software amortization brought about by the increase in Capitalized internal-use software during the three months ended September 30, 2025.

Operating loss

The Company’s Operating loss decreased by $906 thousand or 33.84% for the three months ended September 30, 2025, compared to the three months ended September 30, 2024. The decrease in Operating loss was mainly related to the increase in Net revenue and decrease in SG&A when comparing the three months ended September 30, 2025 to the three months ended September 30, 2024.

Interest expense, net

Interest expense, net decreased by $1 thousand, or 0.79% for the three months ended September 30, 2025, compared to the three months ended September 30, 2024. The decrease in Interest expense for the three months ended September 30, 2025, as compared to the same period in 2024, was partially attributable to the full repayment of the two Agile subordinated business loans and security agreements prior to the three months ended September 30, 2025. This resulted in an Interest expense of $88 thousand for the three months ended September 30, 2024.

The decrease in Interest expense was partially offset by the Company's entry into the Note Purchase Agreement with Streeterville Capital, LLC on July 1, 2025 pursuant to a Secured Promissory Note (the "Note") in the principal amount of $2.21 million. The Note carried an original issue discount of $200 thousand and $10 thousand for legal fees incurred in connection with the purchase and sale of the note. The Note accrued interest at nine percent (9%) per annum. The Company recorded accrued interest expense of $51 thousand and amortization of the discount of $50 thousand during the three months ended September 30, 2025. The Company settled the outstanding principal and accrued interest in full on October 1, 2025.

There was also a decrease of $8 thousand when comparing the three months ended September 30, 2025 to three months ended September 30, 2024 due to Interest expense accrued for payroll tax obligations during the three months ended September 30, 2024. Additionally, the Company had a $3 thousand decrease during the three months ended September 30, 2025 as a result of the Malta loan interest rate decreasing from 6.5% for the three months ended September 30, 2024 to 5.15% for the three months ended September 30, 2025.

Change in fair value of warrant liability

The Company recognized a loss in Change in fair value of warrant liability during the three months ended September 30, 2025 of $287 compared to a gain of $1 thousand during the three months ended September 30, 2024. This change is based on the fair value assessment and adjustment for one warrant liability as described in Note 3 to the unaudited condensed consolidated financial statements provided under Item 1 of this report.

Other income

Other income decreased by $4.99 million for the three months ended September 30, 2025, compared to the three months ended September 30, 2024. The decrease was due to the Company agreeing, during the three months ended September 30, 2024, to grant a non-exclusive license to Boumarang to utilize certain of the Company’s patents for the purpose of producing, selling, marketing, and distributing drones. As consideration for the grant of the non-exclusive license, Boumarang agreed to pay the Company a non-refundable license fee of $5.00 million in the form of a prepaid warrant issued by Boumarang to the Company for 5,000,000 shares of common stock of Boumarang at $1.00 per share. No similar transaction occurred during the three months ended September 30, 2025.

Other expense

Other expense decreased by $1.53 million for the three months ended September 30, 2025, compared to the three months ended September 30, 2024. The decrease was due to the Company incurring $1.17 million during the three months ended September 30, 2024 due to the Company entering into a Termination and Release Agreement under which the transaction entered into between the Company and a certain institutional investor that terminated the remaining 133,334 stock purchase warrants (in Warrant B) and 106,667 stock purchase warrants (in Warrant C) previously issued to this investor. In consideration of the termination, the Company made a $1,650,000 payment to the institutional investor. In addition, the Company recorded a $360 thousand inducement expense during the three months ended September 30, 2024 as a result of the Company entering into a securities purchase agreement on September 10, 2024 with DQI as an inducement to a previously executed securities purchase agreement dated July 13, 2024 between the Company and DQI.

Comparison of the Nine Months Ended September 30, 2025 and 2024

Net revenue

During the nine months ended September 30, 2025, Net revenue increased to $2.23 million, or an 40.72% increase from the Net revenue of $1.59 million for the nine months ended September 30, 2024. During the nine months ended September 30, 2025, the $2.23 million in Net revenue consisted of $1.43 million from an S&P 500 bank, $408 thousand from the Statement of Works under the Master Technology Services Agreement with QID, $118 thousand from a software development company, $104 thousand from Mastercard, $111 thousand from FIS, $48 thousand from a computer programming company, and various other customers for the remaining $13 thousand.

During the nine months ended September 30, 2025 Net revenue increased by $645 thousand compared to the nine months ended September 30, 2024. Of this increase, $420 thousand was attributable to the Company's S&P 500 bank customer resulting from the Company entering into a contract amendment with this customer. The amendment extended the term of the existing agreement until May 31, 2031, with minimum gross revenue exceeding $12.7 million. It provides for changes to the fee structure as well as a new feature development and platform updates.

Additionally, during the nine months ended September 30, 2025 there was an increase in Net revenue due to income from the Statement of Works under the Master Technology Services Agreement with QID effective on January 1, 2025. The Company provided services to QID of $100 thousand per month from January 2025 - June 2025 which was the maximum allowed under the agreement. Starting in July 2025, the agreement allows for billing up to $300 thousand per month thereafter, which the Company did not reach during the nine months ended September 30, 2025 due to delays in customer implementation. Revenue is recognized in accordance with ASC 606 using the cost incurred input method, which aligns revenue recognition with the proportion of costs incurred relative to total expected costs for the contract. During the nine months ended September 30, 2025, the Company billed $600 thousand under this new agreement, compared to none during the nine months ended September 30, 2024. In accordance with ASC 606 guidance, the Company recognized $408 thousand in revenue during the nine months ended September 30, 2025 and has recorded $225 thousand to deferred revenue as of September 30, 2025.

The Company also had an increase of $44 thousand in Net revenue during the nine months ended September 30, 2025 as a result of increased services provided to a computer programming company.

The increases to Net revenue were partially offset by an amendment to the Mastercard agreement executed in February 2025 that reduced fixed monthly license fees. As a result, during the nine months ended September 30, 2025, the Company recognized $90 thousand for software license fees and $14 thousand for other services, meanwhile, during the nine months ended September 30, 2024 the Company recognized $259 thousand for software license fees and $75 thousand for other services.

Cost of services

Cost of services (“COS”) increased by $229 thousand or 28.78% for the nine months ended September 30, 2025 compared

to the nine months ended September 30, 2024. The primary driver of the increase in COS during the nine months ended September 30, 2025 was an $84 thousand increase in internal developer COS allocations as a result of work completed for

the QID Master Services Agreement. Additionally, there was an increase of $82 thousand in COS during the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 due to increased usage of driver license

validations under our existing contract with the S&P 500 bank. The Company also had an increase of $58 thousand due to

an increase in web services costs resulting from increased third party vendor expenses.

Research and development

Research and development (“R&D”) expenses decreased by $60 thousand, or 3.80% for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024. The decrease in R&D expense during the nine months ended September 30, 2025 was primarily driven by a $112 thousand decrease in outsourced software development with

10Clouds as the Company transitioned this work internally resulting in cost savings as internal work is more cost effective.

Comparatively, outsourced development costs decreased by 100% when comparing the nine months ended September 30, 2025 to the nine months ended September 30, 2024 .

The decrease in R&D was partially offset by an increase of $40 thousand in stock-based compensation award expense

during the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 due to an

increase in the fair value of stock-based compensation awards on the award date.an increase in the Company's stock price.

Selling, general, and administrative

Selling, general, and administrative expense (“SG&A”) decreased by $2.08 million, or 30.53%, for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024. The decrease in SG&A expense was driven

by a $1.61 million decrease in salaries, stock-based compensation, payroll costs, and sales commissions during the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024. The $1.61 million decrease

includes a $278 thousand reduction in stock-based compensation awards during the nine months ended September 30, 2025. The decrease in salaries, stock-based compensation, payroll costs, and sales commissions is a result of reductions to

the sales team, from 9 team members employed during the nine months ended September 30, 2024 to no team members

during the nine months ended September 30, 2025. In addition, the EVP of Mergers and Acquisitions left the Company in

December 2024 and was not subsequently replaced and the CFO role was vacated in January 2025 and filled internally

leaving a vacant role that was not subsequently replaced.

The Company also had a $240 thousand decrease in legal and professional fees primarily attributable to the cessation of

advisory and consulting services during the nine months ended September 30, 2024. Other net decreases amounting to

$347 thousand were attributable to changes in IT services, travel costs, marketing, taxes, rent, dues and subscription, and

other operating expenses during the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024.

The decreases in SG&A were partially offset by increases for accounting and audit fees and educational expenses

amounting to $121 thousand for the nine months ended September 30, 2025.

Depreciation and amortization

Depreciation and amortization (“D&A”) increased by $20 thousand, or 3.59% for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024. The primary driver for the increase in D&A is due to an increase of $28 thousand in software amortization when comparing the nine months ended September 30, 2025 to the nine months ended September 30, 2024, brought about by the increase in Capitalized internal-use software of noted as of September 30, 2025.

Operating loss

The Company’s Operating loss decreased by $2.53 million or 31.10% for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The decrease in Operating loss was mainly related to the increase in Net revenue as well as decreases in SG&A and R&D expenses.

Interest expense, net

Interest expense, net decreased by $1 thousand, or 0.48% for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024. The decrease in Interest expense for the nine months ended September 30, 2025, as compared to the same period in 2024, was partially attributable to the full repayment of both Agile subordinated business loans and security agreements prior to the nine months ended September 30, 2025. This resulted in an Interest expense of $88 thousand for the nine months ended September 30, 2024.

The decrease in Interest expense was partially offset by the Company's entry into the Note Purchase Agreement with Streeterville Capital, LLC on July 1, 2025 pursuant to a Secured Promissory Note (the "Note") in the principal amount of $2.21 million. The Note carried an original issue discount of $200 thousand and $10 thousand for legal fees incurred in connection with the purchase and sale of the note. The Note accrued interest at nine percent (9%) per annum. The Company recorded accrued interest expense of $51 thousand and amortization of the discount of $50 thousand during the nine months ended September 30, 2025. The Company repaid the outstanding principal and accrued interest of this Note in full on October 1, 2025.

There was also a decrease of $12 thousand when comparing the nine months ended September 30, 2025 to nine months ended September 30, 2024 due to lower Interest expense accrued for payroll tax obligations during the nine months ended September 30, 2024, driven by lower overall compensation during the nine months ended September 30, 2025 compared to nine months ended September 30, 2024. Additionally, the Company had a $9 thousand decrease during the nine months ended September 30, 2025 as a result of the Malta loan interest rate decreasing from 6.5% for the nine months ended September 30, 2024 to 5.15% for the nine months ended September 30, 2025.

Change in fair value of warrant liability

The Company recognized a gain in Change in fair value of warrant liability during the nine months ended September 30, 2025 of $4 thousand compared to a gain of $6 thousand during the nine months ended September 30, 2024. This change is based on the fair value assessment and adjustment for one warrant liability as described in Note 3 to the unaudited condensed consolidated financial statements provided under Item 1 of this report.

Other income

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Other income decreased by $5.18 million for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024. The decrease was primarily due to the Company agreeing, during the nine months ended September 30, 2024, to grant a non-exclusive license to Boumarang to utilize certain of the Company’s patents for the purpose of producing, selling, marketing, and distributing drones. As consideration for the grant of the non-exclusive license, Boumarang agreed to pay the Company a non-refundable license fee of $5.00 million in the form of a prepaid warrant issued by Boumarang to the Company for 5,000,000 shares of common stock of Boumarang at $1.00 per share. No similar transaction occurred during the nine months ended September 30, 2025.

Another decrease in Other income was a $187 thousand gain recorded during the nine months ended September 30, 2024 from a settlement of a mobile hardware bill. The Company negotiated for a lower payment in the settlement resulting in the gain during the nine months ended September 30, 2024. There was no such gain during the nine months ended September 30, 2025.

Other expense

Other expense decreased by $1.53 million for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024. The decrease was due to the Company incurring $1.17 million during the nine months ended September 30, 2024 due to the Company entering into a Termination and Release Agreement under which the transaction entered into between the Company and a certain institutional investor that terminated the remaining 133,334 stock purchase warrants (in Warrant B) and 106,667 stock purchase warrants (in Warrant C) previously issued to this investor. In consideration of the termination, the Company made a $1,650,000 payment to the institutional investor. In addition, the Company recorded a $360 thousand inducement expense during the nine months ended September 30, 2024 as a result of the Company entering into a securities purchase agreement on September 10, 2024 with DQI as an inducement to a previously executed securities purchase agreement dated July 13, 2024 between the Company and DQI. The Company incurred $1 thousand and $6 thousand in unrealized loss on foreign currency translation expense for the nine months ended September 30, 2025 and 2024, respectively, for intercompany transactions between the parent company, T Stamp Inc., and its subsidiaries.

Liquidity and Capital Resources

As of September 30, 2025, the Company had approximately $5.37 million cash in its banking accounts. The Company is generating revenues, but has not yet generated profits, with a net loss for the nine months ended September 30, 2025 of $5.78 million, Net operating cash outflows of $4.01 million for the same period, and an accumulated deficit of $67.24 million as of September 30, 2025. The Company believes that it has sufficient cash to meet its requirements, and believes it will not need to raise capital from equity and/or debt financings within the next 12 months in order to fund its operations.

Under its Equity Distribution Agreement with Maxim, the Company was able to offer and sell, from time to time, through Maxim, as sales agent or principal, up to $6,196,000 worth of its shares of Common Stock. As of September 30, 2025, the Company had sold 1,465,084 shares of Class A Common Stock for net proceeds of $5,196,979, net of $160,732 in raise fees. As of the date of this report, the Company has sold a total of 1,713,543 shares of Class A Common Stock for net proceeds of $6,010,116, net of $185,880 in raise fees. As such, as of the date of this report, the Company has all but $930.88 of the maximum amount of capital available to it under the Equity Distribution Agreement.

On July 1, 2025, the Company entered into a Note Purchase Agreement with Streeterville Capital LLC, pursuant to which the Company issued a Secured Promissory Note to the investor in the principal amount of $2.21 million. The note carried an original issue discount of $200 thousand and $10 thousand for legal fees incurred in connection with the purchase and sale of the note. The note accrued interest at nine percent (9%) per annum and was due and payable on November 1, 2026. On October 1, 2025 the Company repaid the secured promissory note in full totaling $2,261,413, including $51,413 of total interest expense.

Subsequent to September 30, 2025, on October 31, 2025, the Company entered into a Warrant Exercise and Exchange Inducement Agreement (the “WEEA”) with a certain institutional investor, pursuant to which the institutional investor agreed to (i) exercise (the “Exercise”) (a) all of the warrants issued to the institutional investor on September 3, 2024, which are exercisable for 413,696 shares of the Company’s common stock, par value $0.01 per share, with a current exercise price of $4.83 per share (the “September 2024 Warrants”) and (b) all of the warrants issued to the institutional investor on January 8, 2025, which are exercisable for 621,303 shares of common stock, with a current exercise price of $8.45 per share (the “January 2025 Warrants” and collectively with the September 2024 Warrants, the “Existing Warrants”); and (ii) exchange all or a portion of the common stock purchase warrants issued to the institutional investor on December 6, 2024, which are exercisable for 648,148 shares of common stock (with a current exercise price of $8.10 per share) (the “December 2024 Warrants”) for New Warrants. As consideration for the Exercise, the Company agreed to (i) reduce the exercise price of all of the Existing Warrants, including any unexercised portion thereof, to $4.20 per share, which is equal to the most recent closing price of the Company’s common stock on the Nasdaq Stock Market prior to the execution of the WEEA; (ii) issue to the institutional investor new unregistered warrants to purchase up to an aggregate of 2,511,044 shares of common stock (equal to 180% of the shares of common stock issued in connection with the Exercise) comprised of (a) “Series A Warrants” to purchase an aggregate of 1,301,945 shares of the Company's common stock and “Series B Warrants” to purchase an aggregate of 1,209,099 shares of the Company's common stock, each with an exercise price of $4.20 per share (collectively, the “New Warrants”) in a private placement pursuant to Section 4(a)(2) of the Securities Act of 1933 (the “Securities Act”); and (iii) exchange all 648,148 of the institutional investor’s December 2024 Warrants for New Warrants to purchase up to a number of shares of common stock equal to 100% of the number of shares issuable upon exercise of the December 2024 Warrants with an exercise price of $4.20 per share. The WEEA closed on November 3, 2025 resulting in the Company receiving net proceeds of $4,022,706 which includes $2,609,473 for the exercise of the January 2025 Warrants and $1,737,523 for the exercise of the September 2024 Warrants and is net of fees totaling $324,290.

Additionally, on February 20, 2025, the Company executed a Master Technology Service Agreement ("MTSA") (effective January 1, 2025) with QID Technologies LLC (“QID”) to provide technical services as agreed from time to time and documented by statements of work. The MTSA provided for an initial minimum payment of $100,000 per calendar month, with the budgeted payment thereafter not to exceed $300,000 per month without mutual agreement. On January 1, 2025, pursuant and adhering to the Master Technology Services Agreement terms and conditions, a Statement of Work was executed, pursuant to which the Company will provide certain product development and product operations and commercial business development and related services on behalf of QID. Reaching the maximum monthly revenue of $300,000 would require QID ramping up its customer-facing activities, a process that is not controlled by the Company. At this time, the ramp-up process has taken longer than anticipated, and despite assurances by QID’s majority owner as to their ongoing commitment to the enterprise, there is no certainty as to the speed at which the services will be delivered and consequently the billing levels in a given month.

Going Concern

The accompanying unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company is a business that has not yet generated profits, with a net loss for the nine months ended September 30, 2025 of $5.78 million, net operating cash outflows of $4.01 million for the same period, and an accumulated deficit of $67.24 million as of September 30, 2025.

The Company’s ability to continue as a going concern in the next twelve months following the date the unaudited condensed consolidated financial statements were available to be issued is dependent upon its ability to produce revenues and/or obtain financing sufficient to meet current and future obligations and deploy such to produce profitable operating results. Management has evaluated these conditions and due to the capital raises under the Equity Distribution Agreement that resulted in gross proceeds of $5.36 million and the Warrant Exercise and Exchange Inducement Agreement that resulted in $4.35 million in gross proceeds, we believe that our business has sufficient liquidity to fund planned operations for twelve months following the issuance of these unaudited condensed consolidated financial statements. See Note 13 of the Notes to the unaudited Condensed Consolidated Financial Statements under Item 1 of this report for full details on the capital raises under the Equity Distribution Agreement and Warrant Exercise and Exchange Inducement Agreement.

Cash Flows

The following table summarizes our cash flows for the nine months ended September 30, 2025 and 2024:

Operating Activities

Net cash flows used in operating activities decreased by 35.07% from $6.18 million during the nine months ended September 30, 2024, compared to $4.01 million during the nine months ended September 30, 2025. Of the $5.78 million net loss for the nine months ended September 30, 2025, there were various cash and non-cash adjustments that were added back to the Net loss to arrive at $4.01 million cash used for operating activities for the nine months ended September 30, 2025.

Those adjustments included the add back of $600 thousand related to stock-based compensation. There was a $356 thousand decrease in stock-based compensation during the nine months ended September 30, 2025 when compared to the nine months ended September 30, 2024. Another add back of $900 thousand is included for note receivable payments received from a license agreement with QID entered into on November 12, 2024. Additionally, there is an add back of $567 thousand for non-cash depreciation and amortization, $192 thousand in deferred revenue primarily related to QID revenue billed during the nine months ended September 30, 2025 that will be recognized by the end of the current year, $130 thousand for prepaid expenses, $174 thousand from the increase in accruals, as well as, $103 thousand in non-cash lease expense.

The add backs were offset by reductions in certain cash and noncash adjustments including $999 thousand for cash received on accounts receivable, including related party receivable, and $101 thousand from operating lease liabilities.

Investing Activities

Net cash used in investing activities during the nine months ended September 30, 2025 was $665 thousand, compared to net cash of $687 thousand used in the nine months ended September 30, 2024. Cash used in investing activities during the nine months ended September 30, 2025 related primarily to continued investments in technologies intended to be capitalized and monetized over time, as well as, an increase in purchases of equipment used during the nine months ended September 30, 2025.

Financing Activities

During the nine months ended September 30, 2025, Net cash flows from financing activities was $7.32 million, compared to Net cash flows from financing activities of $4.37 million for the nine months ended September 30, 2024. During the nine months ended September 30, 2025, the Company raised $3.21 million in net proceeds from a securities purchase agreement with an institutional investor for the issuance of Class A Common Stock, pre-funded warrants, and common stock warrants and $5.20 million in net proceeds under the Equity Distribution Agreement. Furthermore, on July 1, 2025, the Company entered into a Note Purchase Agreement pursuant to a Secured Promissory Note in the principal amount of $2.21 million. The note carries an original issue discount of $200 thousand and $10 thousand for legal fees incurred in connection with the purchase and sale of the note.

In addition, On January 10, 2025, the Company repaid the Sentilink secured promissory note payable in full including the principal balance of $3.00 million and interest of $69 thousand.

Critical Accounting Estimates

Our unaudited condensed consolidated financial statements are prepared in accordance with GAAP. The preparation of these unaudited condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses, as well as related disclosures. We evaluate our estimates and assumptions on an ongoing basis. Our estimates are based on historical experience and various other assumptions that we believe to be reasonable under the circumstances. There have been no material changes in the critical accounting estimates policies from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024.

We are a smaller reporting company, as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended, and are not required to provide the information required under this item.

Evaluation of Disclosure Controls and Procedures

We are required to maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Management necessarily applied judgment in assessing the costs and benefits of such controls and procedures, which, by their nature, can provide only reasonable assurance regarding our control objectives.

As of September 30, 2025, we carried out an evaluation, under the supervision and with the participation of management, including the Chief Executive Officer along with the Chief Financial Officer, of the effectiveness, design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)). Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of that date, the Company’s disclosure controls and procedures were not effective due to the material weaknesses described below. This determination is based on the previously reported material weakness management previously identified in our internal control over financial reporting, as described below. We are in the process of remediating the material weakness in our internal control, as described below. We believe the completion of these processes should remedy our disclosure controls and procedures. We will continue to monitor this issue.

Notwithstanding the identified material weaknesses, management has concluded that the unaudited condensed consolidated financial statements present fairly, in all material respects, the Company’s financial position, results of operations, and cash flows as of the dates, and for the periods presented, in accordance with generally accepted accounting principles in the United States of America (“GAAP”).

Previously Reported Material Weakness in Internal Control Over Financial Reporting

In our Annual Report for the year ended December 31, 2024, filed with the SEC on March 31, 2025, we identified a material weakness in our internal control over financial reporting. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. We have determined that we did not design and maintain effective internal controls, including proper design and implementation of controls over management’s review of the Company’s accounting for and recording of complex equity transactions. Therefore, management has concluded that: (1) the above control deficiency constitutes a material weakness; and (2) in turn, the Company did not maintain effective internal control over financial reporting as of December 31, 2024.

Management’s Plan to Remediate the Previously Reported Material Weakness

Management has evaluated the material weakness described above and has updated its design and implementation of internal control over financial reporting to remediate the aforementioned material weakness and enhance the Company’s internal control environment. It is management's belief that these added controls will effectively remediate the previous existing material weakness. However, the implemented and enhanced controls have not operated for a sufficient period of time and additional testing will be required during 2025 to ensure that the internal control environment is operating as designed before we can conclude the material weakness has been remediated. We are committed to continuing to improve our internal control processes and will continue to diligently and vigorously review our financial reporting controls and procedures.

Management’s Report on Internal Controls Over Financial Reporting

As a publicly traded company, we are required to comply with the SEC’s rules implementing Section 302 and 404 of the Sarbanes-Oxley Act, which require management to certify financial and other information in our quarterly and annual reports and provide an annual management report on the effectiveness of controls over financial reporting.

Our management is responsible for establishing and maintaining an adequate system of internal control over financial reporting, as defined in the Exchange Act Rule 13a-15(f). Management conducted an assessment of our internal control over financial reporting based on the framework established in 2013 by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework.

Management identified a material weaknesses in internal control related to proper design and implementation of controls over management’s review of the Company’s accounting for and recording of complex equity transactions in our Quarterly Report for the nine months ended September 30, 2024, filed with the SEC on November 15, 2024. The implemented and enhanced controls for remediation have not operated for a sufficient period of time to demonstrate that the material weakness was remediated as of the date of this report. As a result, management concluded that the Company has not maintained effective internal controls over financial reporting as of September 30, 2025.

Change in Internal Control over Financial Reporting

While we continue to implement design enhancements to our internal control procedures, we believe that, other than the changes described above regarding the ongoing remediation efforts, there was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the nine months ended September 30, 2025 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.