| Item 1.01 |
Entry into a Material Definitive Agreement. |
Securities
Purchase Agreement
On June 1, 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, 736,400 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 $2.30 per share, and pre-funded warrants (the “Pre-Funded
Warrants”) to purchase up to 543,300 shares of Class A Common Stock at $2.299 per share, 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 1,279,700 shares of Class A Common
Stock, at an exercise price of $2.30 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 June 5, 2023,
the Company closed the registered direct offering and the private placement offering (collectively, the “Offering”),
raising gross proceeds of $2,942,766.70 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 will receive additional gross proceeds of approximately
$2,942,766.70. The Company may use the net proceeds from the Offering for working capital, capital expenditures, and other general corporate
purposes.
Pursuant to the terms
of the SPA, the Company is required within 45 days of June 1, 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 June 5, 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 December 5, 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).
Placement
Agency Agreement
Also in connection with the Offering, on June 1,
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 June 1, 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.
Warrant Amendment
In connection with the Offering, the Company also
entered into a warrant amendment agreement (the “Warrant Amendment Agreement”) with the same investor. Under the Warrant Amendment
Agreement, the Company agreed to amend its existing warrants to purchase up to an aggregate of 390,000 shares of the Company's Class A
Common Stock (collectively, the “Existing Warrants”) that were previously issued to the investor in September 2022, such
that, effective upon the closing of the Offering, the amended Existing Warrants will have an exercise price of $2.30 per share and a termination
date of June 5, 2028.
The foregoing summary of the Warrant Amendment is not complete, and
is qualified by reference to a copy of the Warrant Amendment filed as Exhibit 10.2 to this Current Report on Form 8-K.