| Item
1.01 | Entry
into a Material Definitive Agreement. |
On April 14, 2023, T
Stamp Inc., a Delaware corporation (the “Company”), entered into a securities purchase agreement (the “SPA”)
with a certain institutional investor, pursuant to which the Company agreed to issue and sell to the investor (i) in a registered direct
offering, 563,380 shares (the “Shares”) of Class A Common Stock, par value $0.01 per share of the Company (the
“Class A Common Stock”) at a price of $3.30 per share, and pre-funded warrants (the “Pre-Funded
Warrants”) to purchase up to 1,009,950 shares of Class A Common Stock, at an exercise price of $0.001 per share of Class
A Common Stock, and (ii) in a concurrent private placement, common stock purchase warrants (the “Private Placement Warrants”),
exercisable for an aggregate of up to 1,573,330 shares of Class A Common Stock, at an exercise price of $3.30 per share of Class A Common
Stock.
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 Securities and Exchange Commission
(the “SEC”) under the Securities Act of 1933, as amended (the “Securities Act”), on
April 3, 2023 and declared effective on April 12, 2023. The Pre-Funded Warrants are exercisable upon issuance and will remain exercisable
until all of the Pre-Funded Warrants are exercised in full.
The Private Placement
Warrants (and the shares of Class A Common Stock issuable upon the exercise of the 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 Private Placement
Warrants are immediately exercisable upon issuance, will expire five years from the date of issuance, 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 Pre-Funded Warrants or 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 Pre-Funded Warrants or Private Placement Warrants, we are required
to pay the applicable holder, in cash, as liquidated damages as set forth in the Pre-Funded Warrants and Private Placement Warrants. The
Pre-Funded Warrants and 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 Pre-Funded Warrants and Private Placement Warrants.
Under
the terms of the Pre-Funded Warrants and Private Placement Warrants, a holder will not be entitled to exercise any portion of any such
warrant, if, upon giving effect to such exercise, the aggregate number of shares of common stock beneficially owned by the holder (together
with its affiliates, any other persons acting as a group together with the holder or any of the holder’s affiliates, and any other
persons whose beneficial ownership of common stock would or could be aggregated with the holder’s for purposes of Section 13(d)
or Section 16 of the Securities Exchange Act of 1934, as amended) would exceed, for the Pre-Funded Warrants, 9.99%; and, for the Private
Placement Warrants, 4.99% of the number of shares of common stock outstanding immediately after giving effect to the exercise, as such
percentage ownership is determined in accordance with the terms of such warrant, which percentage may be increased at the holder’s
election upon 61 days’ notice to the Company subject to the terms of such warrants, provided that such percentage may in no event
exceed 9.99%.
On April 18, 2023, the
Company closed the offering, raising gross proceeds of approximately $5,191,989 before deducting placement agent fees and other offering
expenses payable by the Company. In the event that all Private Placement Warrants are exercised for cash, the Company would receive additional
gross proceeds of approximately $5,191,989. The Company may use the net proceeds from the offering for working capital, capital expenditures,
and other general corporate purposes.
Under the SPA, the Company is required within 45 days of April 14,
2023 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 Private Placement Warrants. The Company is required
to use commercially reasonable efforts to cause such registration to become effective within 181 days of the closing date of the offering,
and to keep the registration statement effective at all times until no investor owns any Private Placement Warrants or shares issuable
upon exercise thereof.
Pursuant to the terms
of the SPA, from April 18, 2023 until 75 days thereafter, 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,
until October 18, 2023, 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 SPA).
Also in connection with the offering, on April 14, 2023, the Company
entered into a placement agency agreement (the “Placement Agency Agreement”) with Maxim Group LLC (the “Placement
Agent”). Pursuant to the terms of the Placement Agency Agreement, the Placement Agent agreed to use its reasonable best
efforts to arrange for the sale of the Shares, Pre-Funded Warrants, and Private Placement Warrants. The Company will pay the Placement
Agent a cash fee equal to 7.0% of the gross proceeds generated from such sales, and will reimburse the Placement Agent for certain of
its expenses in an aggregate amount up to $50,000.
The Placement Agency Agreement
contains customary representations, warranties and agreements by the Company, customary conditions to closing, indemnification obligations
of the Company and the Placement Agent, including for liabilities under the Securities Act, other obligations of the parties, and termination
provisions.
In addition, pursuant
to certain “lock-up” agreements (each, a “Lock-Up Agreement”) that were required to be entered into
as a condition to the closing of the SPA, our officers and directors have agreed, for a period of 60 days from April 14, 2023, not to
engage in any of the following, whether directly or indirectly, without the consent of the purchaser under the SPA: offer to sell, sell,
contract to sell pledge, grant, lend, or otherwise transfer or dispose of our common stock or any securities convertible into or exercisable
or exchangeable for Class A Common Stock (the “Lock-Up Securities”); enter into any swap or other arrangement
that transfers to another, in whole or in part, any of the economic consequences of ownership of the Lock-Up Securities; make any demand
for or exercise any right or cause to be filed a registration statement, including any amendments thereto, with respect to the registration
of any Lock-Up Securities; enter into any transaction, swap, hedge, or other arrangement relating to any Lock-Up Securities subject to
customary exceptions; or publicly disclose the intention to do any of the foregoing.
The foregoing does not purport to be a complete description of each
of the Placement Agency Agreement, the Pre-Funded Warrants, the Private Placement Warrants and the SPA and is qualified in its entirety
by reference to the full text of each of such document, which are filed as Exhibits 1.1, 4.1, 4.2, 4.3 and 10.1, respectively, to the
Prior Report and incorporated herein by reference.
CrowdCheck Law, LLP, securities counsel to the Company, delivered an
opinion as to the validity of the Shares, Pre-Funded Warrants and shares of Class A Common Stock issuable upon exercise of the Pre-Funded
Warrants, a copy of which is filed as Exhibit 5.1 to the Prior Report and is incorporated herein by reference.