Trust Stamp Inc (NASDAQ:IDAI, ISE:AIID) announced on Thursday that it has closed a $5.51 million financing, which the company said strengthens its liquidity position and provides funding for ongoing operations.
According to the company, the financing consists of a 24-month loan that can be repaid at any time. Trust Stamp said the transaction provides approximately $5 million in net cash proceeds immediately, increasing its combined cash on hand and receivables balance to more than $7.6 million.
Trust Stamp CEO Gareth Genner said the financing was undertaken in response to what the company believes has been recent short-selling activity that has pressured its share price.
Genner stated that some market participants may have assumed the company required an immediate equity financing and that a decline in the stock price could affect its ability to raise capital.
He said Trust Stamp had cash on hand, receivables exceeding $2.6 million, and ongoing revenue receipts before entering into the financing.
The company said it chose debt financing rather than issuing equity because of its current share price.
“I regard the outlook for the company as very positive and the short selling as opportunistic manipulation versus an informed perspective on the company and our business,” Genner said.
Genner will also provide a written business update and host a conference call for shareholders on July 17.
