美國
證券交易委員會
華盛頓特區 20549
表格
(標記一個)
| 根據1934年證券交易法第13或15(d)條款的季度報告。 |
截至2024年6月30日季度結束
或
| 根據1934年證券交易法第13或15(d)條款的過渡報告 |
從______________到______________的過渡期間
委員會文件號碼：
（根據其章程所指定的正式名稱）
| 7389 | ||||
|
(依據所在地或其他管轄區) 的註冊地或組織地點) |
(主要標準產業 其他 |
(國稅局雇主 識別號碼) |
(
(註冊人主要執行辦公室的地址，包括郵政編碼和電話號碼，包括區號)
根據《證券法》第12(b)條註冊的證券：
| 每種類別的名稱 | 交易標的（s） | 每個註冊交易所的名稱 | ||
| 資本市場 | ||||
| 資本市場 |
根據法案第12(g)條註冊的證券:
None
請選擇核實發行人：(1)是否已提交在前12個月內根據1934年證交法第13條或第15(d)條所需的所有報告（或發行人需要提交此類報告的較短期間），以及(2)是否在過去的90天內受過此類報告要求的條款。
請以勾選表示，申報人在過去12個月內（或者在申報人被要求提交這些文件的較短期間內）是否已電子提交依照Regulation S-t第405條的規定應提交的每份互動數據文件。
請勾選登記人是否為大型加速報告人、加速報告人、非加速報告人、小型報告公司或新興成長公司。 請參見《交易所法》第120億2條中對「大型加速報告人」、「加速報告人」、「小型報告公司」及「新興成長公司」的定義。
| 大型加速歸檔人 | o | 加速歸檔人 | o | |
| x | 小型報告公司 | |||
| 新興成長型企業 |
如果是新興成長型企業，請打勾表示公司已選擇不使用股票交易所法13(a)條規定提供的延長過渡期來遵守任何新的或修訂的財務會計準則。 o
請以勾選標記表示註冊人是否為空殼公司（根據法案第120億2條的定義）。 是 o 沒有
截至二零二四年十一月十四日，註冊人有 已發行及未發行的普通股份。
解說說明 注釋
此修正案僅為提供有關在季度結束後期間發生的某些股票發行定價的澄清。公司收到投資者提出的問題，決定提交此修正案以協助投資者理解交易過程。
AppTech支付公司
10-Q 表格
目錄
| 頁 | ||
| 第一部分 | ||
| 關於前瞻性陳述和預測的特別說明 | 3 | |
| 項目 1。 | 無審計的合併財務報表 | 4 |
| 項目2。 | 管理層對 財務狀況 和 經營成果 的討論與分析 | 25 |
| 項目3。 | 關於市場風險的定量和定性披露 | 34 |
| 項目4。 | 控制項和程序 | 34 |
| 第二部分 | ||
| 項目 1。 | 法律程序 | 35 |
| 項目 1A。 | 風險因素 | 36 |
| 項目2。 | 未註冊的股權證券銷售及資金用途 | 36 |
| 項目3。 | 高級證券的默認情況 | 36 |
| 項目4。 | 礦山安全披露 | 36 |
| Item 5. | 其他資訊 | 36 |
| Item 6. | 展品 | 37 |
| 簽名 | 40 |
| 2 |
關於未來預測和展望的特別說明
在本季度10-Q表格中，有關AppTech Payments Corp.（我們、我們的、AppTech或公司）的各種聲明是根據1995年《私人證券訴訟改革法案》定義的“前瞻性聲明”。前瞻性聲明涉及重大風險和不確定性。除歷史事實的陳述之外，本報告中有關我們的策略、未來運營、未來財務狀況、未來收入、預計成本、前景、計劃和管理目標的所有聲明均爲前瞻性聲明。這些聲明受到風險和不確定性的影響，並且基於目前可用的信息。諸如“預期”、“相信”、“估計”、“期望”、“打算”、“可能”、“計劃”、“考慮”、“預測”、“項目”、“目標”、“可能”、“潛在”、“繼續”、“進行中”、“將”、“會”、“應該”、“能夠”或這些詞的否定以及類似表達或詞語，均可識別爲前瞻性聲明。反映在我們前瞻性聲明中的事件和情況可能不會發生，實際結果可能與我們前瞻性聲明中預測的結果有重大差異。可能導致實際結果不同的重要因素包括：
| · | 與客戶搭載到我們的平台相關的延遲和不確定性； | |
| · | 與新的潛在營業收入來源及其相應合同義務相關的重大投資和成本； | |
| · | 由於終端用戶需求減少、意外競爭、監管問題或其他意外情況導致銷售減緩或減少； | |
| · | 關於不利宏觀經濟條件的不確定性，包括通貨膨脹、經濟衰退、財政和貨幣政策的變化、信貸收緊、利率期貨上升、消費信心和支出以及高失業率； | |
| · | 對第三方的依賴，以便促進我們的自動清算所（"ACH"）和商戶服務能力； | |
| · | 在其他國家延遲或未能獲得未來產品的監管批准，和； | |
| · | 當前和未來的法律法規。 |
所有書面和口頭的前瞻性聲明 歸因於我們或代表我們行動的任何人，均完全受本節中包含或提及的警示性聲明的限制。我們提醒投資者不要過於依賴我們做出的或代表我們做出的前瞻性聲明。我們不承擔任何義務，並明確拒絕任何更新或修訂前瞻性聲明的義務， 無論是由於新信息、未來事件還是其他原因。然而，請查看我們在提交給證券交易委員會（SEC）的任何年度、季度或當前報告中對相關主題的進一步披露。
我們鼓勵您閱讀本季度報告第10-Q表格中關於我們基本報表的討論與分析。我們無法保證實際上能達到我們預期的結果或發展；即使我們在很大程度上實現了這些結果，也無法確保它們對我們產生預期的後果或影響。因此，我們無法保證能夠實現那些前瞻性陳述和估計中所述的結果。
除非上下文另有要求，在本季度報告中 表格10-Q中，詞語“AppTech”、“我們”、“我們”、“註冊人”或“公司” 指的是AppTech Payments Corp.
| 3 |
第一部分 – 財務信息
項目1. 財務報表
APPTECH PAYMENTS corp.
合併財務報表
未經審計的基本報表索引
(基本報表已被簡化 以便於展示目的)
| 頁面 | |
| 截至2024年9月30日和2023年12月31日的合併資產負債表 | 5 |
| 截至2024年和2023年9月30日的三個月和九個月合併經營報表 | 6 |
| 截至2024年和2023年9月30日的三個月和九個月合併股東權益報表 | 7 |
| 截至2024年和2023年9月30日的九個月合併現金流量表 | 8 |
| 基本報表注釋 | 9 |
| 4 |
APPTECH PAYMENTS corp.
合併資產負債表
截至2024年9月30日和2023年12月31日，
(未經審計)
(以千爲單位，除股票和每股數據外)
| 9月30日 2024 | 2023年12月31日, 2023 | |||||||
| 資產 | ||||||||
| 流動資產 | ||||||||
| 現金及現金等價物 | $ | $ | ||||||
| 應收賬款 | ||||||||
| 預付費用 | ||||||||
| 總流動資產 | ||||||||
| 票據應收款 | ||||||||
| 使用權資產 | ||||||||
| 安防按金 | ||||||||
| 無形資產，淨值減去累計攤銷 | ||||||||
| 商譽 | ||||||||
| 資本化軟件開發，扣除累計折舊 | ||||||||
| 總資產 | $ | $ | ||||||
| 負債和股東權益 | ||||||||
| 流動負債 | ||||||||
| 應付賬款 | $ | $ | ||||||
| 應付賬款 - 相關方 | ||||||||
| 應計負債 | ||||||||
| 可轉換票據應付及應計利息，扣除$的折扣後淨額 | ||||||||
| 應付票據 | ||||||||
| 透過收入 | ||||||||
| 使用權負債 | ||||||||
| 總流動負債 | ||||||||
| 長期負債 | ||||||||
| 使用權負債，減去當期部分 | ||||||||
| 應付票據，扣除當前部分 | ||||||||
| 長期負債合計 | ||||||||
| 總負債 | ||||||||
| 承諾和或有事項（注7） | ||||||||
| 股東權益 | ||||||||
| 優先股： 截至2024年9月30日和2023年12月31日，各授權股份；A系列優先股：$ 面值； 截至2024年9月30日和2023年12月31日，已發行並流通的股份。 | ||||||||
| 普通股，$ 面值； 授權股份; 和 截至2024年9月30日和2023年12月31日，發行在外的股份分別爲 | ||||||||
| 額外支付的資本 | ||||||||
| 累計負債 | ( | ) | ( | ) | ||||
| 總股東權益 | ||||||||
| 所有負債與股東權益 | $ | $ | ||||||
請參閱合併基本報表的附註。
| 5 |
APPTECH PAYMENTS CORP.
合併營運報表
截至2024年和2023年9月30日的三個月和九個月
(未經審計)
(以千爲單位，除股票和每股數據外)
截至三個月 9月30日 | 截至九個月 9月30日 | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| 營收 | $ | $ | $ | $ | ||||||||||||
| 營收成本 | ||||||||||||||||
| 毛利潤 | ||||||||||||||||
| 營業費用： | ||||||||||||||||
| 銷售、一般和行政費用，包括股票基礎 補償爲$和$截至2024年和2023年9月30日的三個月，分別爲$和$截至2024年和2023年9月30日的九個月，分別爲 | ||||||||||||||||
| 無形資產減值 | ||||||||||||||||
| 研究和開發，包括 股票基礎補償爲$和 $截至2024年和2023年9月30日的三個月，$和 $截至2024年和2023年9月30日的九個月，$ | ||||||||||||||||
| 營業費用總額 | ||||||||||||||||
| 營業虧損 | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| 其他收入（費用） | ||||||||||||||||
| 利息費用 | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| 衍生負債公允價值變化 | ||||||||||||||||
| 債務折扣攤銷 | ( | ) | ( | ) | ||||||||||||
| 其他收入（費用） | ( | ) | ( | ) | ( | ) | ||||||||||
| 總其他費用 | ( | ) | ( | ) | ( | ) | ||||||||||
| 稅前損失 | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| 所得稅準備 | ||||||||||||||||
| 淨虧損 | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| 與認股權證重置相關的視同分紅 | ( | ) | ( | ) | ( | ) | ||||||||||
| 歸屬於普通股股東的淨虧損 | $ | ( | ) | $ | ( | ) | ( | ) | ( | ) | ||||||
| 每普通股基本和攤薄的淨虧損 | $ | ) | $ | ) | $ | ) | $ | ) | ||||||||
| 用於每股基本和攤薄金額的加權平均股份數 | ||||||||||||||||
請參閱合併基本報表的附註。
| 6 |
APPTECH PAYMENTS CORP.
股東權益合併報表
截至2024年和2023年9月30日的三個月和九個月
(未經審計)
(以千爲單位，除股票和每股數據外)
系列 A 優先股 | 普通股 | 其他 已付- | 累計 | Stockholders’ | ||||||||||||||||||||||||
| Shares | 金額 | Shares | 金額 | 在 資本 | Deficit | Equity | ||||||||||||||||||||||
| 截至2022年12月31日的餘額 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
| 淨虧損 | – | – | ( | ) | ( | ) | ||||||||||||||||||||||
| 股票基礎補償 | – | |||||||||||||||||||||||||||
| 更改Warrants定價 | – | – | ( | ) | ||||||||||||||||||||||||
| 發行股份出售的淨收益 | – | |||||||||||||||||||||||||||
| 截至2023年3月31日的餘額 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
| 淨虧損 | – | – | ( | ) | ( | ) | ||||||||||||||||||||||
| 基於股票的 補償 | – | |||||||||||||||||||||||||||
| 截至2023年6月30日的餘額 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
| 淨虧損 | – | – | ( | ) | ( | ) | ||||||||||||||||||||||
| 股票基礎補償 | – | |||||||||||||||||||||||||||
| 預付服務的股票發行 | – | |||||||||||||||||||||||||||
| 期權行使 | – | |||||||||||||||||||||||||||
| ATM發行的淨收益 | – | |||||||||||||||||||||||||||
| 截至2023年9月30日的餘額 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
系列 A 優先股 | 普通股 | 其他 已支付- | 累計 | Stockholders’ | ||||||||||||||||||||||||
| Shares | 金額 | Shares | 金額 | 在 資本 | Deficit | Equity | ||||||||||||||||||||||
| 截至2023年12月31日的餘額 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
| 淨虧損 | – | – | ( | ) | ( | ) | ||||||||||||||||||||||
| 股票基礎補償 | – | |||||||||||||||||||||||||||
| 普通股銷售的淨收益 | – | |||||||||||||||||||||||||||
| 2024年3月31日的餘額 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
| 淨虧損 | – | – | ( | ) | ( | ) | ||||||||||||||||||||||
| 股票基礎補償 | – | |||||||||||||||||||||||||||
| 已發行股份 伴隨應付票據 | – | |||||||||||||||||||||||||||
| 截至2024年6月30日的餘額 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
| 淨虧損 | – | – | ( | ) | ( | ) | ||||||||||||||||||||||
| 股票基礎補償 | – | |||||||||||||||||||||||||||
| 發行可轉換債券的股份 應付票據 | – | |||||||||||||||||||||||||||
| 發行成本 | – | – | ( | ) | ( | ) | ||||||||||||||||||||||
| 與可轉換票據一同發行的Warrants 應付票據 | – | – | ||||||||||||||||||||||||||
| 權證重新定價 | – | – | ( | ) | ||||||||||||||||||||||||
| Warrant行使，扣除發行成本 | – | |||||||||||||||||||||||||||
| Warrant行使 - 無現金 | – | |||||||||||||||||||||||||||
| 截至2024年9月30日的餘額 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
請參閱合併基本報表的附註。
| 7 |
APPTECH PAYMENTS CORP.
現金流量合併報表
截至2024年和2023年9月30日的九個月
(未經審計)
(以千爲單位，除股票和每股數據外)
| 2024年9月30日 | 2023年9月30日 | |||||||
| 經營活動產生的現金流量： | ||||||||
| 淨虧損 | $ | ( | ) | $ | ( | ) | ||
| 調整淨損失以對賬經營活動中使用的現金: | ||||||||
| 股票基礎補償 | ||||||||
| 註銷股票回購負債 | ( | ) | ||||||
| 註銷應收票據 | ||||||||
| 無形資產減值 | ||||||||
| 可轉換票據、Warrants 以及衍生負債結算收益 | ( | ) | ||||||
| 債務折扣攤銷 | ||||||||
| 無形資產和軟件的攤銷 | ||||||||
| 衍生負債公允價值變動 | ( | ) | ||||||
| 經營資產與負債的變動： | ||||||||
| 應收賬款 | ( | ) | ||||||
| 預付費用 | ||||||||
| 應付賬款 | ||||||||
| 應計負債 | ( | ) | ( | ) | ||||
| 透過收入 | ( | ) | ||||||
| 使用權資產和負債，淨額 | ( | ) | ( | ) | ||||
| 用於經營活動的淨現金 | ( | ) | ( | ) | ||||
| 投資活動的現金流量 | ||||||||
| 資本化的軟件開發 | ( | ) | ( | ) | ||||
| 其他資產 | ( | ) | ||||||
| 投資活動使用的淨現金 | ( | ) | ( | ) | ||||
| 融資活動產生的現金流： | ||||||||
| 應付票據收入 | ||||||||
| 對關聯方貸款的還款 | ( | ) | ||||||
| 可轉換票據收入 | ||||||||
| 普通股銷售收入 | ||||||||
| Warrants行使所得 | ||||||||
| 應付票據的還款 | ( | ) | ( | ) | ||||
| 可轉換票據的還款 | ( | ) | ||||||
| 行使股票期權獲得的收益 | ||||||||
| 融資活動提供的淨現金 | ||||||||
| 現金及現金等價物變動 | ( | ) | ( | ) | ||||
| 期初的現金及現金等價物 | ||||||||
| 期末的現金及現金等價物 | $ | $ | ||||||
| 現金流信息的補充披露： | ||||||||
| 支付的利息 | $ | $ | ||||||
| 支付的所得稅現金 | $ | $ | ||||||
| 非現金投資和融資活動 | ||||||||
| 爲預付服務發行股票 | $ | $ | ||||||
| 以應付票據發行普通股 | $ | $ | ||||||
| 以可轉換票據發行普通股 | $ | $ | ||||||
| 與可轉換票據一起發行的Warrants | $ | $ | ||||||
| 註銷股票回購負債 | $ | $ | ||||||
請參閱合併基本報表的附註。
| 8 |
APPTECH PAYMENTS CORP.
合併基本報表附註
(以千爲單位，除每股數據外)
註釋 1 - 組織和業務描述
AppTech Payments Corp.（"AppTech"或 "公司"），是一家位於特拉華州的公司，總部設在加利福尼亞州卡爾斯巴德，是一家金融科技公司。AppTech利用創新的支付 處理和數字銀行技術，增強其核心商戶服務能力。公司擁有專利和自主知識產權的 軟體將提供進步且可適應的產品，這些產品通過一系列協同的提案，直接面向商戶、銀行機構和業務企業。
AppTech擁有一個高度安全的數字支付平台，我們正在進一步開發數字銀行產品，以推動客戶及其客戶的商業體驗。基於行業板塊對支付和銀行協議的標準，我們將提供獨立產品和完全集成的解決方案，從而提供創新、無與倫比的支付、銀行和金融服務體驗。我們的處理技術可以直接使用，也可以通過我們的RESTful API進行調用，以構建完全品牌化和可定製的體驗，同時支持令牌化、多渠道和多方式交易。
AppTech股票的標的爲“APCX” 其Warrants的標的爲“APCXW”，在納斯達克資本市場（"納斯達克"）交易。
在2023年6月，公司與InstaCash及PayToMe.co簽訂了 許可協議。根據與這些公司的安排，公司協商獲得了相當於每方總稀釋後資本股本7.5%的優先股。截至本次提交文件之日，股份尚未 發放給AppTech。InstaCash的首席執行官還爲公司提供投資者關係服務。此外，PayToMe.co是AppTech的關聯方。公司的高級成員在PayToMe.co的董事會任職，而AppTech的財務長（“CFO”）是其創始人及首席執行官（“CEO”）的配偶。
在2023年8月，公司簽訂了一項銷售協議，允許其通過“在市場上” (ATM) 發行的方式，出售總髮行價格高達1800萬美元的普通股，依據其提交給SEC的S-3表格的備用註冊聲明。截至本次提交，由於嬰兒配額的計算，公司目前無法通過ATM籌集資金。
在2023年10月13日，公司與位於內華達州的軟件開發公司Alliance Partners, LLC（以FinZeo爲名運營）及Chris Leyva（“賣方”）簽訂了會員權益購買協議（“購買協議”）。根據該協議，公司收購了賣方在Alliance Partners中的100%會員權益。此項收購的主要目的是爲了獲得對FinZeo知識產權、關鍵人員和軟件平台的控制權，這對吸引公司的潛在客戶至關重要。
在交易關閉後， 支付條款進行了多次修改，最後一次修改於2024年6月20日執行。有關支付計劃的詳細信息 以及提供給賣方的股權考慮，請參閱第8條。股東權益 - 與收購相關的發行權益 部分。
截至2024年9月30日，尚未支付的剩餘款項爲$
管理層解決持續經營問題的計劃 考慮事項
公司經歷了持續的經營虧損，主要是由於收入有限。公司的當前財務狀況和持續虧損對其作爲持續經營單位的能力提出了重大質疑。
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管理層正在積極尋求額外的資金 期權，並且對在這些基本報表的發行日期後的十二個月內將開始產生營業收入充滿信心，儘管無法提供任何保證。
管理層打算保持充足的營運資本，並遵循謹慎的財務預測。
備註 2 - 主要會計政策摘要
財務報表基礎
所附的合併未經審計的基本報表是根據美國的一般公認會計原則（“U.S. GAAP”）爲中期財務信息以及證券交易委員會（“SEC”）的規則和規定編制的。 根據公司管理層的意見，所附的基本報表反映了結束於2024年9月30日和2023年9月30日的期間所需的所有調整，包括常規的、例行的調整，以公正地呈現結果。儘管管理層相信這些未經審計的基本報表中的披露足以使所提供的信息不具誤導性，但根據SEC的規則和規定，通常包含在遵循U.S. GAAP編制的基本報表中的某些信息和腳註披露已被省略。
附帶的合併未經審計的基本報表 應與公司財務報表及其相關的註釋一起閱讀，這些內容包含在公司於2024年4月1日向證券交易委員會提交的2023年12月31日結束的年度報告10-K中。截止到2024年9月30日的九個月的中期結果不一定代表預期的2024年12月31日結束的年度結果或任何未來的中期結果。
合併基礎
合併未經審計的基本報表 包括AppTech Payments Corp.及其全資子公司的賬目，公司是主要受益者。所有重大 內部帳戶和交易在合併時被消除。
估計的使用
按照公認會計原則編制基本報表要求管理層對資產和負債的報告金額以及在基本報表日期對或有資產和負債的披露作出估計和假設，並影響報告期內收入和費用的報告金額。
公司在估值時做出了關鍵的估計和假設 包括：股票獎勵、無形資產及相關的商譽減值測試。實際結果可能與這些估計不同。
以前期間的重分類
某些前期金額已被重新分類 以符合當前期間的呈現。具體而言，公司將『應付賬款 - 關聯方』從合併資產負債表中的『應付賬款』重新分類。因此，『應付賬款 - 關聯方』在2024年9月30日和2023年12月31日單獨列示。
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信用風險集中度
現金及現金等價物存放在金融機構，有時餘額可能超過每個支付聯邦存款保險公司保險費的機構聯邦保險限額250,000美元。公司從未因這些餘額而遭受任何損失。
來自商戶服務的應收賬款由金融機構按月支付。截至2024年9月30日，
截至2024年9月30日的九個月中，
營業收入確認
財務會計準則委員會（「FASB」） 發佈了會計準則更新（「ASU」）第2014-09號，編纂爲會計準則彙編（「ASC」） 606 客戶合同收入，該標準爲實體在會計處理中提供了一種完整的模型，用於處理客戶合同帶來的收入。
公司提供商戶處理解決方案 用於信用卡和電子支付。在所有情況下，公司作爲商戶和銀行之間的代理，商戶生成信用卡 和電子支付，而銀行處理此類支付。
公司的營業收入來自於服務 根據交易金額的百分比或特定費用交易定價，具體取決於卡片或交易類型。營業收入在服務執行時記錄，通常是在銀行處理商戶的信用卡和電子支付時。支付給渠道合作伙伴的費用被記錄爲營業收入的減少。
許可營業收入
公司正在積極尋求戰略合作伙伴關係 協議，通過支付費用授權我們的專利組合。許可費是延期支付，並在服務期或合同期限內按月均勻確認。
無形資產和知識產權
Intellectual Property
本公司 根據無形資產經濟利益的預計消費週期來攤銷知識產權。通常，本公司以直線法攤銷其知識產權，包括專利和其他可識別的無形資產。攤銷期一般區間爲三年到十五年，具體取決於資產的性質及其預計使用壽命。
首字母大寫 軟件開發成本
公司將與其數字支付和銀行平台開發相關的某些成本資本化，包括員工薪酬和第三方開發者的諮詢費用， 僅在開發很可能導致新功能或附加功能時才會資本化。在初步項目規劃階段和後實施階段 incurred 的費用會被當作費用處理。可識別的無形資產，如收購的科技、知識產權和競業禁止協議， 按其收購日期的公允價值記錄，採用收益法和成本法的組合。資本化的軟件開發成本按資產的估計使用壽命採用直線法攤銷。
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商譽
公司按照ASC 350，即無形資產 - 商譽和其他（「ASC 350」）確認商譽。ASC 350要求商譽和其他具有無限壽命的無形資產每年或在事件或情況表明資產的公允價值已低於其賬面價值時進行減值測試。
研發
根據ASC 730，研發（“R&D”）成本在發生時費用化。R&D成本包括獲取專利和其他未證實的科技的成本、承包商費用和與我們科技平台開發相關的其他費用、合同和其他外部服務。截止到2024年和2023年9月30日的九個月內，總共的R&D成本約爲$ 百萬美元和$ 分別爲百萬美元。
基本每普通股的凈利潤（虧損）是通過將凈利潤（虧損）除以年內流通的普通股加權平均股數計算得出的。稀釋後的每普通股凈利潤（虧損）是通過將凈利潤（虧損）除以年內流通的普通股加權平均股數計算得出的，並增加年內流通的潛在稀釋普通股。稀釋證券包括期權、Warrants和可轉換的優先股。
未計入稀釋每股收益的普通股等價物數量是 和 截至2024年和2023年9月30日的九個月，普通股等價物的加權平均數量未計入稀釋的收入（損失）每股金額，因爲這些影響是反稀釋的。
| 2024年9月30日 | 2023年9月30日 | |||||||
| A系列優先股 | ||||||||
| 認股權證 | ||||||||
| 期權 | ||||||||
| 總計 | ||||||||
基於股票的補償
公司將向員工、董事和顧問授予的所有基於股票的支付獎項視爲補償費用，包括股票、期權和Warrants的授予， 根據其估計的公允價值進行確認。對於股票獎勵，公允價值基於公司普通股在授予日的收盤價格確定，並在員工、董事和顧問獲得獎勵所需的服務期間內確認。 對於期權和Warrants，公允價值在授予日使用適當的估值模型進行估算，同時考慮授予獎勵的條款和條件。該費用也在預計服務條件滿足的期間內確認。此外，公司還有多個授予協議，其中包括基於附帶績效條件的期權授予。 對於這些基於績效的期權授予，公司在績效標準完全滿足時記錄期權的公允市場價值。
新的會計公告
FASB發佈ASU以修訂ASC中的權威文獻。到目前爲止，已經有多項ASU修訂了ASC的原始文本。公司認爲迄今發佈的ASU要麼(i)提供補充指導，(ii)是技術修正，(iii)不適用於本公司，或(iv)預計不會對本公司產生重大影響。
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註釋 3 – 無形資產
知識產權
公司擁有兩個專利組合，包括：
移動支付科技 該組合 由四項移動科技專利組成，範圍包括向移動設備交付網頁內容的系統和方法、計算機 到移動雙向聊天系統和方法，以及移動到移動支付。
地理位置科技 該投資組合包括 13項專利，專注於在美國任何地方通過消費者的手機，在特定地理位置和時間 參數內交付、購買或請求任何產品或服務。該投資組合包含保護所有移動廣告的專利， 包括商店的移動應用程序。我們以直線法將專利攤銷，從三年到15年，這大致符合無形資產的經濟利益消費方式。
截至2024年9月30日和2023年12月31日，專利的總價值爲$
2023年10月26日，公司收購了FinZeo，一家位於內華達州的有限責任公司。收購的無形資產的總價值爲$
截至2024年9月30日及2023年12月31日的知識產權如下：
| 知識產權 | 2024年9月30日 | 2023年12月31日 | ||||||
| 期初餘額 | $ | $ | ||||||
| 無形資產的收購 | ||||||||
| 攤銷費用 | ( | ) | ( | ) | ||||
| 期末餘額 | $ | $ | ||||||
資本化的軟件開發成本
公司將與其數字支付和銀行平台開發相關的某些成本資本化。
在截至2024年9月30日的九個月期間，
公司資本化了軟件開發成本爲$
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截至2024年9月30日，資本化的軟件開發成本的總值約爲$
| 2024年9月30日 | 2023年12月31日 | |||||||
| 期初餘額 | $ | $ | ||||||
| 新增項目 | ||||||||
| 資產減值 | ( | ) | ||||||
| 攤銷費用 | ( | ) | ( | ) | ||||
| 期末餘額 | $ | $ | ||||||
請參見注釋7 - 承諾和或有事項 有關的討論 Infinios金融服務（前身爲NEC Payments b.S.C.）及其資本化軟體開發 成本的註銷。開發成本。
商譽
在2023年10月26日，公司完成了對聯盟合作伙伴有限責任公司的收購，該公司是內華達州的一家有限責任公司。購買價格的公允價值與所收購的淨資產（包括組建的勞動力）之間的差額被記錄爲商譽。截至2024年9月30日，公司記錄的商譽約爲$
請參見注釋1 - 購買聯盟合作伙伴， 有限公司。
注意 4 – 應計負債
截至2024年9月30日和2023年12月31日的應計負債如下：
| 2024年9月30日 | 2023年12月31日 | |||||||
| 應計工資 | $ | $ | ||||||
| 防稀釋條款 | ||||||||
| 應付關聯方款項 | ||||||||
| 其他 | ||||||||
| 總應計負債 | $ | $ | ||||||
以下相關方要麼是管理層成員，要麼是董事會成員、重要股東，或者對公司具有重大影響的個人。
反稀釋條款
與即將發行的股份有關 作爲HotHand收購的一部分，以及與Infinios的反稀釋條款，公司的其他費用累計了一個 以每股1.81美元計算的普通股股份，共計$ 千美元。這些股份將在和解協議履行後被取消並歸還給公司庫房，截至2024年9月30日尚未 發行給Infinios。
請參見 注 7 - 承諾和或有事項.
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應付賬款 應付關聯方
截至2024年9月30日，剩餘應付賬款爲$
註釋 5 – 應付票據
以下是截至2024年9月30日和2023年12月31日未償還應付票據的總結。
應付票據
在2020年，
公司與美國小企業管理局簽訂了一份爲期30年的無擔保應付票據，金額爲$
在2024年6月10日，公司與第三方貸方Black Ice Advisors, LLC簽訂了一項爲期60天的無擔保票據協議，獲得資金$
截至2024年9月30日和2023年12月31日，所有未償還的應付票據餘額爲$
可轉換票據
在
2024年7月10日，公司完成了一項定向增發（「定向增發」），包括一份
私募增發的淨收益爲$
債券從發行之日起到期爲十二個月，年利率爲
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該債券 包括一項贖回條款，允許公司以本金金額的110%和應計利息的110%提前償還債券。 此外，如果公司通過公開發行或私募（不包括內部投資）總共籌集150萬美元或更多資金，則募集活動所得款項的50%必須用於償還債券，除非購房者另有豁免。 還包括違約條款，規定在不遵守債券條款的情況下的具體處罰和補救措施。
Warrants 股份、認購股份
以及根據債務證券可發行的普通股股份隨後根據證券法進行了註冊，註冊申報表爲S-1表（檔案號333-281409），該申報表於2024年8月22日獲得SEC的有效聲明。關於我們與Armistice Capital Master Fund之間的誘導交易的相關說明見第8條。Warrants 的行使價格降低至$每
股份。由於此次交易觸發了債務證券的轉換價格調整條款，債務證券的轉換價格也降低至$
自2024年8月29日起， 本權證根據權證條款進行了無現金行使，導致發行了 可自由交易的 我們普通股股份。
截至2024年9月30日，
可轉換票據的未償餘額爲$
包括普通股部分價值在內的總成本分配給股本爲$
See Note 9 - Subsequent Event - Convertible Note Payable - Debenture Conversion.
NOTE 6 – RIGHT OF USE ASSET
Lease Agreement
In January 2020, the Company entered into a lease agreement commencing February 8, 2020 for its current Carlsbad, California facility, which expires in 2025. The term of the lease is for five years. At inception of the lease, the Company recorded a right of use asset and liability. The Company used an effective borrowing rate of 12% within the calculation.
In October 2023, the Company entered into a lease
agreement commencing October 1, 2023 for its Austin, Texas office, which expires in March 2025. The term of the lease is for
The rent expense was $
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NOTE 7 – COMMITMENTS AND CONTINGENCIES
NCR Lawsuit
On November 30, 2022, AppTech filed a complaint against NCR Payment Solutions, LLC in the United States District Court for the Southern District of California.
在2024年3月，公司與NCR達成了一項和解與釋放協議。雙方明確否認任何責任，且不需要任何一方採取進一步行動。
Infinios Financial Services (formerly NEC Payments B.S.C.)
2020 年 10 月 1 日，公司簽訂了
通過一系列措施與 Infinios Financios Services BSC（前身爲 NEC Payments B.s.c）（“Infinios”）建立戰略合作伙伴關係
協議，其中包括以下內容：(a) 訂閱許可和服務協議；(b) 數字銀行平台運營協議；
(c) 訂閱許可訂購表；以及 (d) 註冊權協議（統稱爲 “協議”）。2月11日
2021年，公司簽訂了經修訂和重述的訂閱許可和服務協議，數字銀行平台運營
與Infinios簽訂的協議和訂閱許可訂購表（統稱爲 “重述協議”）。費用總額
根據重述協議，到期金額爲220萬美元，其中不包括與基礎設施託管費相關的直通費用。在 2021 年期間
而2022年，該公司向Infinios支付了美元
On May 4, 2023, unsatisfied with Infinios’
performance of its contractual obligations, the Company notified Infinios of its intent to terminate its relationship and commenced a
good-faith negotiation with Infinios regarding the termination terms. In June 2023, Infinios turned off all its services, and the Company
wrote off the $
On November 13, 2023, the Company filed an Answer to the Arbitration Claim, along with Counterclaims for breach of contract, fraudulent inducement, unjust enrichment, breach of fiduciary duty, and breach of the covenant of good faith and fair dealing. At a Preliminary Hearing held on February 22, 2024, hearing dates of August 12 and 13, 2024, August 19 and 20, 2024, and October 21 and 22, 2024 were scheduled.
On August 8, 2024, the Company entered into a Settlement Agreement and Mutual Release with Infinios Solutions (Bahrain) W.L.L. and Infinios Financial Services B.S.C. The terms of this Settlement Agreement are confidential.
On October 29, 2024, the Company agreed to
additional compensation payments to Infinios if the Settlement Payment is not made within specified time frames. If the Settlement
Payment is not fully settled by October 21, 2024,
The terms of the Settlement Agreement and Amendment do not currently result in any additional amounts payable outside what has already been accrued by the Company. Upon fulfilling the terms of the Settlement Agreement, both parties have agreed to jointly file for the dismissal and termination of the ongoing arbitration. This process is anticipated to be completed before the end of November 2024. See Note 9 Subsequent Events.
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Terminated Employees
Following unsuccessful negotiations regarding severance payments, three former employees filed a lawsuit against the Company in May 2024 concerning their severance claims. After reviewing the case details, including the lawsuit, the Company has assessed that it is less likely than not that a severance obligation will be incurred. Given this assessment, the Company has determined that no accrual for severance payments is necessary as of September 30, 2024.
The case is ongoing, with key proceedings scheduled for the first half of 2025. The Company will continue to monitor the case and reassess its legal obligations as necessary.
NOTE 8 – STOCKHOLDERS’ EQUITY
Series A Preferred Stock
The Company is authorized to issue shares
of preferred stock with a par value of $ per share. As of September 30, 2024 and December 31, 2023, there were fourteen
() shares of Series A preferred stock issued and outstanding. The holders of Series A preferred stock are entitled to one vote per share
on an “as converted” basis on all matters submitted to a vote of stockholders and are not entitled to cumulate their votes
in the election of directors. The holders of Series A preferred stock are entitled to any dividends that may be declared by the Board
of Directors out of funds legally available, therefore on a pro rata basis according to their holdings of shares of Series A preferred
stock, on an as converted basis. In the event of liquidation or dissolution of the Company, holders of Series A preferred stock are entitled
to share ratably in all assets remaining after payment of liabilities and have no liquidation preferences.
Common Stock
公司被授權發行 每股面值的股份，總額爲 $ 截至2024年9月30日和2023年12月31日，共有 和 ，分別爲， 截至2024年9月30日和2023年12月31日，外流通普通股股份數量。普通股股東有權就所有提交給股東投票的事項，按每股一票進行投票，並且不能在董事會的選舉中累積投票。普通股股東有權獲得董事會從合法可用資金中宣佈的任何分紅，因此需遵循任何未發行優先股股東的優先權和關於普通股分紅支付的任何合同限制。在公司清算或解散的情況下，普通股股東有權在支付了負債和任何未發行優先股的清算優先權後，按比例分享剩餘的所有資產。普通股股東沒有優先認購權或其他認購權，也沒有將其普通股轉換爲任何其他證券的權利。
公開發行
在2023年2月，公司宣佈完成之前宣佈的500萬美元註冊直接發行（「註冊直接發行」），與單一機構投資者進行賣出 其普通股（「股份」）和購買最多的 股份（「Warrants」）在一次定向增發（「定向增發」）中同時進行。購買一股和一個Warrant的綜合價格爲3.00美元。每個Warrant的行使價格爲每股普通股4.64美元，並可自2023年8月1日起行使。Warrants在其可行使之日起五年後到期。註冊直接發行和同時進行的定向增發的總毛收入約爲
在2023年8月，公司簽訂了一項銷售協議，根據該協議，它可以通過「即期市場」發行最多1800万美元的普通股，依據已向SEC提交的S-3表格的 shelf註冊聲明。截至2024年9月30日，公司共售出 普通股，獲得的淨收入爲$
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在2023年10月，公司與某些合格和機構投資者（「買方」）簽訂了一份證券購買協議（「證券購買協議」），根據該協議，公司同意向買方發行並出售總計： (i) 股份（「股份」）的公司普通股，每股面值$0.001（「普通股」）和 (ii) Warrants（「購買Warrants」）以每股$2.74的價格購買最多 普通股，購股權可在每股$2.74的價格行使（「發行」）。每股及相關購股權的發行價格爲$2.10。十月的購股權將在其可行使之日起五年內到期。2023年10月26日，公司完成了發行，籌集了$
在2024年3月26日，AppTech Payments Corp.與EF Hutton LLC簽訂了一份承銷協議，作爲多個承銷商的代表，涉及公開發行 普通股的股份，面值爲每股0.001美元，公衆購買價格爲每股1.00美元。根據承銷協議，公司授予承銷商在45天內購買額外股份的選擇權，最多可以購買 普通股的股份，按發行價格購買，減去任何承銷折扣和佣金。
截至2024年9月30日，約有$
用於服務的股票
截至2024年9月30日和2023年9月30日的九個月期間，公司授予了
and 普通股股份，分別與幾位顧問的業務開發和專業服務相關。公司將普通股的發行價值定爲$
發行附帶應付票據的股票
截至2024年9月30日的九個月內，公司發行了 普通股作爲應付票據的關聯交易。2024年的發行價值爲$
可轉換票據發行的股票
請參閱備註 5 - 應付款項 - 可轉換票據。
與收購相關的發行權益
在2023年10月26日，公司完成了對FinZeo的收購。賣方收到了現金和股票作爲購買價格的一部分。 見註釋 1 - 對Alliance Partners, LLC的購買。
截至 2024年9月30日
與Alliance Partners, LLC的採購協議下的付款條款被修訂爲如下：
考慮到 調整支付計劃，Chris Leyva 收到了總共 股息支付公司 和 購買該公司股票的期權。
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股票 期權
公司授予股票期權作爲員工薪酬的一部分，並在歸屬期內確認這些期權的費用。如果員工未滿足某些條件，例如銷售目標，或者在期權歸屬之前離開公司，這些期權將被視爲作廢。
在2021年12月7日，董事會授權公司的股權激勵計劃，以促進向員工（包括我們指定的高管）、董事、獨立承包商、商人、推薦合作伙伴、渠道合作伙伴以及我們公司的員工授予股權激勵。該計劃對吸引、保留和激勵這些關鍵人員至關重要，這對我們的長期成功至關重要。 在2023年5月，股東批准爲公司的股權激勵計劃增加70萬股，授權的總股數達到 。在2024年5月，股東批准在新通過的2024年股權激勵計劃（「2024計劃」）下增加 股份，該計劃完全取代了之前的計劃。因此，在2024計劃下授權的普通股總數爲 股份，截止到2024年9月30日還有 股份可供發行。
在2024年6月，公司取消了
在2024年3月20日，公司的已歸屬和未行使的股票期權到期期限被延長至自授予日期起10年，適用於當前員工和顧問。在修改日期和修改前均計算了公允價值。
截至2024年9月30日的九個月期間，公司記錄了期權修改費用爲$
截至2024年9月30日的九個月期間，公司授予了 購買普通股的期權。這些授予包括：
| 1. | 向顧問授予期權，歸屬條件取決於達到指定的銷售里程碑。這些期權的公允價值爲非計劃期權，期限爲一年，將在歸屬顯著可能時作爲費用予以確認。這些期權的行權價爲$ 每股$ 每股的公允價值爲$在發行日期。公司在截至2024年9月30日的九個月內未記錄任何基於股票的補償費用，因爲這些並未被確定爲可能歸屬。 | |
| 2. | 在2024年4月4日，公司授予 當前員工和顧問的期權，行權價爲$，有效期爲十年，授予日期的公允價值爲$。公司在此授予中確認了$ 千相關的費用。這些期權在授予日期完全歸屬。 | |
| 3. | 在截至2024年9月30日的九個月期間，公司授予了 期權給董事會和顧問。這些期權有十年的到期時間，行使價格範圍從$ 至$ 每股。根據授予日期確定的這些期權的公允價值，範圍從$ 至$ 每股。 | |
| 4. | 在2024年7月3日，公司授予了 在權益計劃下的期權，以及大約 向員工和顧問授予的計劃外期權數量爲百萬。這些期權自授予日期起十年後到期，行使價格爲$ 每股$，在發行日期的公允價值爲$ 這些期權的歸屬取決於達成特定的公司里程碑。當歸屬變得可能時，這些期權的公允價值將被確認爲費用。 |
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The following table summarizes option activity:
| Number of shares | Weighted Average exercise price | Weighted Average remaining years | ||||||||||
| Outstanding December 31, 2023 | $ | |||||||||||
| Issued | ||||||||||||
| Exercised | ||||||||||||
| Cancelled | ( | ) | ||||||||||
| Outstanding as of September 30, 2024 | $ | |||||||||||
| Outstanding as of September 30, 2024, vested | $ | |||||||||||
The unvested options includes a total of million options contingent upon reaching specified sales milestones. The remaining expense to be recognized, exclusive of the contingent performance-based options, is $ thousand as of September 30, 2024.
During the nine months ended September 30, 2024, the Company recorded $ thousand in option expenses, which includes the modification expense of $ thousand and the company-wide grant of options valued at $ thousand.
The options vest in equal monthly installments ranging from instantly to 12 months. For the nine months ended September 30, 2024, the fair value of the options were valued using a Black-Scholes option pricing model with the following range of assumptions:
| Market value of common stock on issuance date | ||||
| Exercise price | ||||
| Expected volatility | % - % | |||
| Expected term (in years) | ||||
| Risk-free interest rate | % - % | |||
| Expected dividend yields |
Warrants
As of September 30, 2024, the Company has
| Number of shares | Weighted Average exercise price | Weighted Average remaining years | ||||||||||
| Outstanding December 31, 2023 | $ | |||||||||||
| Cancelled | ||||||||||||
| Exercised | ( | ) | $ | ( | ) | |||||||
| Issued | $ | |||||||||||
| Outstanding as of September 30, 2024 | $ | |||||||||||
See Note 5 for warrants issued with convertible note.
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Issuance of New Warrants (Inducement Transaction)
On August 30, 2024, AppTech Payments Corp. ("the
Company") entered into a Warrant Inducement Agreement with Armistice Capital Master Fund Ltd. (the "Selling Stockholder")
to induce the immediate exercise of warrants previously issued in October 2023. On August 30, 2024, Armistice Capital exercised
warrants to purchase shares of AppTech Payments Corp. (the "Company") common stock on a cash basis at a reduced exercise price
of $ per share. This exercise generated gross proceeds of $
As part of the inducement transaction, the Company
issued new warrants ("New Warrants") to the Selling Stockholder for the purchase of an additional shares of the Company’s
common stock at an exercise price of $0.70 per share. The New Warrants are exercisable beginning six months from the date of issuance
and expire five and a half years from the date of issuance. The fair value of the New Warrants was determined to be $
Concurrent with the issuance of the New Warrants, the Company entered into a modification agreement for the February 2023 Warrants, which originally allowed the Selling Stockholder to purchase up to 1,666,667 shares of the Company’s common stock at an exercise price of $ per share. In October 2023, the Company reduced the exercise price of these warrants from $4.64 to $2.74, and subsequently to $0.70 per share as part of this inducement.
This change in the exercise price increased the fair value per warrant, as calculated using the Black-Scholes model with inputs consistent with those disclosed for similar options. The fair value of the February and October 2023 Warrants increased by $350 thousand which was recognized as an addition to Additional Paid-in Capital (APIC), with an offsetting entry to APIC, as this represents an equity transaction under ASC 815-40 and ASC 505-50.
Cashless Exercise of Peak One Warrants
Refer to Note 5 - Note Payables.
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Resale S-1
On September 27, 2024,
The resale of the shares under the S-1 is at the discretion of the Selling Stockholder, with pricing determined based on prevailing market conditions or negotiated transactions. The Company will not receive proceeds from the sale of shares by the Selling Stockholder. However, the Company will receive the proceeds from the exercise of the warrants if they are exercised for cash.
See Note 9 - Subsequent Events for additional subsequent events.
NOTE 9 – SUBSEQUENT EVENTS
Issuance of Common Stock Purchase Warrants
In October 2024, the Company issued two separate common stock purchase warrants. One warrant was issued to a consultant for the purchase of up to 355,000 shares of common stock, with an exercise price of $0.90 per share, and a five-year term expiring on October 25, 2029. Additionally, a warrant was issued to another consultant, entitling the holder to purchase up to 300,000 shares of common stock, also at an exercise price of $0.90 per share, expiring on the same date. Both warrants were issued in reliance on exemptions from registration under the Securities Act of 1933, as amended. These are part of consulting agreements in which the terms of the agreements have yet to be finalized.
Issuance of restricted stock
In October 2024, the Company granted 25,000 shares of restricted stock to a consultant and the shares vested immediately.
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Infinios Financial Services Case Update (formerly NEC Payments B.S.C.)
Refer to Note 8 - Commitments and Contingencies.
Nasdaq
在2024年5月9日，AppTech Payments Corp.（以下簡稱“公司”）收到了納斯達克發出的缺陷通知，指出公司的普通股在連續三十個交易日內交易價格低於1.00美元的最低買盤價，這是根據納斯達克上市規則5550(a)(2)的要求。 公司最初被給予直到2024年11月5日的時間以恢復合規；然而，由於公司未能達到合規且其股東權益未達到額外延長期所需的500萬美元最低要求，故公司無資格獲得第二個180天的合規期。
另外， 在2024年8月21日，公司收到了納斯達克關於無法滿足250萬美元最低股東權益要求的通知， 該通知基於我們截至2024年6月30日的10-Q表格提交。公司在2024年10月25日向納斯達克提交了更新的 合規計劃，詳細說明了恢復和維持合規所需的步驟。然而，納斯達克已確定， 這一缺陷與買盤價格缺陷相結合，構成了額外的退市依據。
在2024年11月6日，納斯達克發出了員工決定函，通知公司其證券將面臨從納斯達克資本市場退市的風險。公司於2024年11月12日正式請求召開聽證會，以對此決定進行上訴，聽證會由納斯達克聽證小組進行。公司正在等待聽證會日期，預計將在請求後的30至45天內舉行。公司對退市行動的上訴目前已暫停，等待小組的決定。
可轉換債券 - 可轉換債務
2024年10月22日，公司收到來自Peak One Opportunity Fund, LP的轉股通知，按每股0.70美元的轉換價格轉換10萬美元，獲得142,857股普通股，減少債券的未償還本金至100萬美元。詳見第5條 - 應付賬款 - 可轉換票據。
潛在私人發行
在十月份，公司收到了60万的投資 來自一位潛在投資者。公司與潛在投資者積極參與最終確定投資的完整條款， 目標是在2024年11月底之前達成額外投資並簽署協議。
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be read together with the audited consolidated financial statements and related notes included elsewhere in this report. Certain statements contained in this report, including statements regarding the anticipated development and expansion of our business, our intent, belief or current expectations, primarily with respect to the future operating performance of our company and the products and services we expect to offer and other statements contained herein regarding matters that are not historical facts, are “forward-looking” statements. Our Management’s Discussion and Analysis contains not only statements that are historical facts, but also forward-looking statements which involve risks, uncertainties, and assumptions. Because forward-looking statements are inherently subject to risks and uncertainties, our actual results may differ materially from the results discussed in the forward-looking statements.
Business Overview
The financial services industry is going through a period of intensive growth driven by the advancement of technology and the rapid rise of contactless transactions due to societal changes, in part, as a response to COVID-19. End-users expect ease of use and an enhanced user experience in all their daily financial interactions. In this rapidly evolving digital marketplace, businesses have broad and frequently changing requirements to meet consumer expectations and operational efficiencies to maintain their competitive edge.
To flourish in this environment, businesses need to adopt new technologies to engage, communicate and process payments and manage payouts with their customers from a supplier that widely supports innovation and adaptation as the industry evolves. We believe our technologies will greatly increase the adoption of omni-channel payments and digital banking solutions in sectors that must quickly adapt and migrate to new, secure digital Fintech technologies. By embracing advancements in the payment and banking industries, we are well-positioned to meet the growing needs of existing and prospective clients and intend for our current and future products to be at the forefront of solving these accelerated market needs.
AppTech’s all-in-one Fintech platform, FinZeo™, delivers best-in-class financial technologies and capabilities through an ever-evolving modular cloud/edge-based architecture. The FinZeo platform houses a large array of financial products and services that can be implemented off-the-shelf or customized via modern APIs. Within its FinZeo platform, AppTech offers Payments-as-a-Service (“PaaS”), Banking-as-a-Service (“BaaS”), and the Commerse™ Portal.
FinZeo provides PaaS via integrated solutions for frictionless digital and mobile payment acceptance. These solutions provide advanced payment processing solutions by catering to the unique needs of each merchant. FinZeo’s PaaS solutions include ACH (automatic clearing house), credit & debit cards, eCheck, mobile processing, electronic billing, and text-to-pay. PaaS will also solve for multi-use case, multi-channel, API-driven, account-based issuer processing for card, digital tokens, and payment transfer transactions.
AppTech is positioned to further accelerate digital transformation through BaaS, layered with financial management tools that empower financial institutions to provide businesses, professionals, and individuals with the ability to better manage their finances anywhere, anytime at a fraction of the cost of traditional banking and financial services. BaaS fosters an ecosystem of immersive and scalable digital financial management services, including FinZeo’s groundbreaking automated underwriting portal. By digitizing the underwriting process, Automated Underwriting expedites business onboarding with its intuitive digital application and e-signature capabilities. This portal offers customizable pricing, risk models, and access to multiple processors, ensuring tailored solutions for diverse needs.
The Commerse Portal empowers Independent Sales Organizations (ISOs) and Independent Software Vendors (ISVs) to seamlessly integrate their businesses, facilitating swift technology adoption. By leveraging the Commerse portal, ISOs/ISVs can streamline operations and foster growth, meeting the economic demands of their merchants. Through personalized portals, ISOs/ISVs have the flexibility to select and integrate FinZeo payments and banking services, thereby enhancing their offerings to clients.
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FinZeo has a flexible architecture and can be fully white labeled to allow for rich, personalized payment and banking experiences. This cloud-based platform packages together elements of AppTech’s intellectual property, BaaS, PaaS and Commerse™ Portal to create a one-hub connection point of multi tenant portals giving the merchant, ISO/ISV, and each customer a well-defined user experience.
AppTech was reincorporated in Delaware on December 23, 2021. During this time, the business name was changed to AppTech Payments Corp. AppTech’s executive offices are located at 5876 Owens Avenue, Suite 100, Carlsbad, California 92008. The Company’s phone number is (760) 707-5959. The Company’s website address is www.apptechcorp.com. AppTech does not incorporate the information on or accessible through our website into this report. The Company has included our website address in this report solely as an inactive textual reference.
Recent Developments
Private Placement Offering of Warrants for Armistice Capital Master Fund Ltd.
On February 2, 2023, AppTech sold to Armistice Capital Master Fund Ltd. (“Armistice”) in a private placement, certain warrants to purchase up to 1,666,667 shares of the Company’s common stock at an exercise price of $4.64 per share (the “February 2023”). The February 2023 Warrants are exercisable six months following the issue date and will expire five and one-half years from the issue date. The February 2023 Warrants were issued pursuant to an exemption from the registration requirements of the Securities Act provided in Section 4(a)(2) of the Securities Act and/or Rule 506(b) of Regulation D promulgated thereunder.
In October 2023, AppTech sold to Armistice certain warrants to purchase up to 1,666,667 shares of the Company’s common stock at an exercise price of $2.74 per share (the “October 2023 Warrants”). The October 2023 Warrants are exercisable from October 24, 2023 until October 24, 2028 (five years from the initial exercise date). The issuance of the shares of common stock issuable upon exercise of the October 2023 Warrants is registered pursuant to an effective registration statement on Form S-3 (File No. 333-265526).
On August 28, 2024, AppTech entered into a definitive agreement with Armistice for the exercise of the October 2023 Warrants at a reduced exercise price of $0.70 per share (the “Warrant Inducement Agreement”). Pursuant to the Warrant Inducement Agreement, in consideration for the immediate exercise of the October 2023 Warrants for cash, on August 30, 2024, AppTech issued the New Warrants to Armistice to purchase up to an aggregate of 3,333,334 shares of common stock (the “New Warrant Shares”) at an exercise price of $0.70 per share (the “Inducement Transaction”). The New Warrants will be exercisable six months following the date of issuance and have a term of five and one-half years from the date of issuance. Pursuant to the Warrant Inducement Agreement, AppTech is prohibited from entering into subsequent equity sales, subject to certain exceptions, for a 45-day period commencing on the closing date of the Inducement Transaction. Furthermore, AppTech is prohibited from entering into any agreement to issue common stock or common stock equivalents involving a Variable Rate Transaction (as defined in the Warrant Inducement Agreement), subject to certain exceptions, for a six-month period commencing on the closing date of the Inducement Transaction.
In connection with the Inducement Transaction, AppTech also entered into a certain Warrant Amendment Agreement (the “Warrant Amendment Agreement”) with Armistice, to amend the February 2023 Warrants to purchase up to 1,666,667 shares of common stock, such that the February 2023 Warrants will have a reduced exercise price of $0.70 per share and will expire five and one-half years from August 30, 2024.
The October 2023 Warrant Shares and the New Warrant Shares were later registered under the Securities Act pursuant to the registration statement on Form S-1 (File No. 333- 282388), which was declared effective by the SEC on October 11, 2024.
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Private Placement Offering of Common Stock, Debenture and Warrants
On July 11, 2024, AppTech closed a private placement offering (the “Private Placement”) of $1,100,000 in principal amount of its 6% convertible debenture (“Debenture”) to Peak One Investments, LLC and a warrant (the “Peak One Warrant”) to purchase up to 750,000 shares of its common stock to Peak One Investments, LLC. Pursuant to a certain Securities Purchase Agreement, dated as of July 10, 2024 (“Securities Purchase Agreement”), the Debenture was sold to Peak One Opportunity Fund, L.P. for a purchase price of $1,000,000 (the “Purchase Price”), representing an original issue discount of ten percent (10%).
The Peak One Warrant expires five years from its date of issuance. The Peak One Warrant is exercisable, at the option of the holder, at any time, for up to 750,000 shares of the Company’s common stock (the “Peak One Warrant Shares”) at an exercise price equal to $1.16 (the “Exercise Price”), subject to adjustment for any stock splits, stock dividends, recapitalizations and similar events and in the event AppTech, at any time while the Peak One Warrant is outstanding, issues, sells or grants any option to purchase, or sells or grants any right to reprice, or otherwise disposes of, or issues common stock or other securities convertible into, exercisable for, or otherwise entitle any person the right to acquire, shares of common stock, at an effective price per share that is lower than the then Exercise Price. In the event of any such anti-dilutive event, the Exercise Price will be reduced at the option of the holder to such lower effective price of the dilutive event.
In connection with the Private Placement, we paid a placement fee of $70,000, a non-accountable fee of $20,000, and certain legal fees. We also agreed to issue an aggregate of 100,000 shares of restricted common stock (the “Commitment Shares”) on the closing date as follows: 50,000 of the Commitment Shares to Peak One and 50,000 of the Commitment Shares to Peak One Investments.
In connection with the Private Placement, AppTech entered into a Registration Rights Agreement, dated July 10, 2024, with Peak One Opportunity Fund, L.P. where AppTech agreed to file a registration statement within 30 days of the date of the Securities Purchase Agreement to register the Commitment Shares, the shares of the Company’s common stock issuable under the Debenture and the Peak One Warrant, and shares of common stock issued to Peak One Opportunity Fund, L.P. and Peak One Investments, LLC as a result of any stock split, stock dividend, recapitalization, exchange or similar event or otherwise, without regard to any limitation on beneficial ownership in the Debenture or Peak One Warrant, with the Securities and Exchange Commission.
The Securities Purchase Agreement and the Registration Rights Agreement contain customary representations, warranties, agreements and conditions to completing future sale transactions, indemnification rights and obligations of the parties. The securities were sold in reliance upon an exemption from registration contained in Section 4(a)(2) of the Securities Act and Regulation D promulgated thereunder.
The Peak One Warrant Shares, the Commitment Shares and the shares of the Company’s common stock issuable under the Debenture were later registered under the Securities Act pursuant to the registration statement on Form S-1 (File No. 333-281409), which was declared effective by the SEC on August 22, 2024. In connection with the Inducement Transaction between AppTech and Armistice Capital Master Fund Ltd., the exercise price of the Peak One Warrant was reduced to $0.70 per share. Effective as of August 29, 2024, the Peak One Warrant was exercised cashless pursuant to the terms of the Peak One Warrant, resulting in the issuance of 521,739 freely tradeable shares of the Company’s common stock.
Failure to Satisfy a Continued Listing Rule
On May 9, 2024, AppTech received a deficiency notification from Nasdaq due to the Company’s common stock trading below the minimum bid price of $1.00 for thirty consecutive business days, as required by Nasdaq. While the notice does not currently affect the Company’s listing, AppTech Payments Corp. has until November 5, 2024, to regain compliance.
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On August 21, 2024, AppTech received another deficiency letter (the “August Deficiency Letter”) from the Staff of Nasdaq notifying AppTech that, AppTech is not in compliance with Nasdaq Listing Rule 5550(b)(1) (the “Listing Rule”), which requires AppTech to maintain a minimum of $2,500,000 in stockholders’ equity for continued listing, and AppTech also does not meet the alternatives of market value of listed securities or net income from continuing operations. The August Deficiency Letter has no immediate effect on the listing of the Company’s securities, and the Company’s common stock and warrants will continue to trade on The Nasdaq Capital Market under the symbols “APCX” and “APCXW”, respectively, at this time.
The Notice states that AppTech has 45 calendar days, or until October 7, 2024, to submit a plan to regain compliance. The Company submitted an updated compliance plan to Nasdaq on October 25, 2024, detailing steps to regain and maintain compliance. If Nasdaq accepts the Company’s plan, Nasdaq may grant the Company an extension of up to 180 calendar days from the date of the Notice, to evidence compliance with the Listing Rule. If Nasdaq does not accept the Company’s plan, the Company will have the opportunity to appeal the decision to a Nasdaq Hearings Panel. There can be no assurance that the Company will be able to regain or maintain compliance with Nasdaq listing criteria.
AppTech intends to monitor the closing bid price of its common stock and may, if appropriate, consider available options to regain compliance with the Minimum Bid Price Requirement, including initiating a reverse stock split. However, there can be no assurance that the Company will be able to regain compliance with the Minimum Bid Price Requirement or will otherwise be in compliance with other Nasdaq Listing Rules.
On November 6, 2024, Nasdaq issued a Staff Determination Letter, notifying the Company that its securities are subject to delisting from The Nasdaq Capital Market. The Company has until November 13, 2024, to appeal this determination by requesting a hearing with a Nasdaq Hearings Panel. The Company formally requested a Hearing on November 12, 2024, to appeal this determination with a Nasdaq Hearings Panel. The Company is waiting for a Hearing date, which is expected to be 40-60 days from the request. When the Company appealed and requested the hearing, the delisting action was stayed pending the Hearing Panel's decision. Otherwise, trading in the Company's securities would have been suspended at the opening of business on November 15, 2024, and Nasdaq would have filed a Form 25-NSE with the SEC to formally delist the securities.
Financial Operations Overview
The following discussion sets forth certain components of our statements of operations as well as factors that impact those items (in thousands, except per share data).
Revenues
Our Revenues. We derive our revenue by providing financial processing services to businesses.
Expenses
Cost of Revenue. Cost of revenue includes costs directly attributable to processing and other services the company provides. These also include related costs such as residual payments to our business development partners, which are based on a percentage of the net revenue generated from client referrals.
General and administrative. General and administrative expenses include professional services, rent and utilities, and other operating costs.
Research and development. Research and development costs include costs of acquiring patents and other unproven technologies, contractor fees and other costs associated with the development of the SMS short code texting platform, contract and outside services.
Interest expense, net. Our interest expense consists of interest on our outstanding indebtedness and amortization of debt issuance costs.
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Results of Operations
This section includes a summary of our historical results of operations, followed by detailed comparisons of our results for the three and nine months ended September 30, 2024 and 2023, respectively.
Revenue
Revenue was approximately $43 thousand and $140 thousand for the three months ended September 30, 2024 and 2023, representing a decrease of 69%. The decrease was principally driven by $34 thousand lower merchant processing revenue and $62 thousand lower licensing fee.
Revenue was approximately $224 thousand and $363 thousand for the nine months ended September 30, 2024 and 2023, representing a decrease of 38%. The decrease was principally driven by $161 thousand lower merchant processing revenue and offset by $21 thousand higher licensing fee.
Cost of Revenue
Cost of revenue was approximately $24 thousand and $44 thousand for the three months ended September 30, 2024 and 2023, respectively, representing a decrease of 45%, driven primarily by a decrease in residual payouts.
Cost of revenue was approximately $49 thousand and $159 thousand for the nine months ended September 30, 2024 and 2023, representing a decrease of 69%, driven primarily by a decrease in residual payouts.
General and Administrative Expenses
General and administrative expenses were approximately $1.9 million and $2.2 million for the three months ended September 30, 2024 and 2023, respectively, representing a decrease of 16%. The decrease was primarily driven by lower stock based compensation.
General and administrative expenses were approximately $6.7 million and $7.1 million for the nine months ended September 30, 2024 and 2023, respectively, representing a decrease of 6%. The decrease was primarily driven by lower stock based compensation.
Research and Development Expenses
Research and development expenses were approximately $0.0 million and $0.8 million for the three months ended September 30, 2024 and 2023, respectively. The decrease was primarily due to the reclassification of $557 thousand in expenses as capitalized software development costs.
Research and development expenses were approximately $1.3 million and $2.8 million for the nine months ended September 30, 2024 and 2023, respectively. The decrease was primarily due to lower stock based compensation approximately $0.8 million, and the reclassification of $557 thousand in expenses as capitalized software development costs.
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Impairment of Intangible Assets
Impairment of intangible assets were approximately $0 and $6.1 million for the nine months ended September 30, 2024 and 2023. On May 4, 2023, the Company notified Infinios of its intent to terminate its relationship. Infinios turned off all its services in June 2023 and the Company wrote-off the $6.1 million capitalized asset as it was deemed to be impaired. See Note 3 Intangible Assets - Capitalized Development Cost and Prepaid Licenses, and Note 7 - Commitments and Contingencies.
Interest Expense, net
Interest expense, net was approximately $18 thousand for the three months ended September 30, 2024, compared to interest expense, net at $4 thousand for the three months ended September 30, 2023. The increase in interest expense was primarily due to the Company’s interest on a new convertible note in July 2024.
Interest expenses, net was approximately $53 thousand and $48 thousand for the nine months ended September 30, 2024 and 2023, respectively. The increase was primarily due to a new convertible note in July 2024.
Change in Fair Value of Derivative Liability
Change in fair value of derivative liability was approximately $0 and $0 for the three months ended September 30, 2024 and 2023.
Change in fair value of derivative liability was approximately $0 and $27 thousand for the nine months ended September 30, 2024 and 2023, respectively. The decrease was primarily due to the Company’s settlement of derivative liabilities in April 2023.
Other income (expenses)
Other expense was approximately $6 thousand and $5 thousand for the three months ended September 30, 2024 and 2023.
Other expense was approximately $8 thousand for the nine months ended September 30, 2024, and other income was $711 thousand for the nine months ended September 2023. The decrease was primarily driven by $430 thousand gain from cancellation of stock repurchase liabilities during the three months ended March 31, 2023, and, the Company’s repayment of derivative liabilities in April 2023.
Liquidity and Capital Resources
As of September 30, 2024, we had cash and cash equivalents of approximately $104 thousand, working capital of negative $4.8 million, and stockholders’ equity of approximately $1.4 million.
During the nine months ended September 30, 2024, we met our immediate cash requirements through existing cash balances, public offerings, “at-the-market” offerings (ATM), and debt financing.
Additionally, we used equity and equity-linked instruments to pay for services and compensation.
See Note 8 – Stockholders’ Equity.
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Management’s Plan to Address Going Concern Considerations
The Company has experienced recurring operating losses, primarily due to limited revenues. The Company’s current financial conditions and recurring losses raise substantial doubt about its ability to continue as a going concern.
Management is actively pursuing additional funding options and is confident that it will begin generating revenue during the following twelve months from the issuance date of these financial statements, although no assurances can be made.
Management undertook cost cutting measures to lower its expenses and it intends to maintain adequate working capital and adhere to prudent financial forecasting.
Cash Flows
The following table presents a summary of cash flows from operating, investing and financing activities for the following comparative periods (in thousands).
Nine Months Ended September 30, 2024 and 2023
| Nine Months Ended September 30, | ||||||||
| 2024 | 2023 | |||||||
| Net cash used in operating activities | $ | (4,968 | ) | $ | (6,545 | ) | ||
| Net cash used in investing activities | $ | (567 | ) | $ | (50 | ) | ||
| Net cash provided by financing activities | $ | 4,358 | $ | 3,384 | ||||
Cash Flow from Operating Activities
Net cash used in operating activities during the nine months ended September 30, 2024, was approximately $5.0 million, which is comprised of (i) our net loss of approximately $8.0 million, adjusted for non-cash expenses totaling $2.6 million (which includes adjustments for equity-based compensation, depreciation and amortization), and (ii) changes in operating assets and liabilities of approximately $449 thousand.
Net cash used in operating activities during the nine months ended September 30, 2023 was approximately $6.5 million, which is comprised of (i) our net loss of $15.1 million, adjusted for non-cash expenses totaling $9.1 million (which includes adjustments for equity-based compensation, depreciation and amortization), and (ii) decreased by changes in operating assets and liabilities of approximately $0.5 million.
Cash Flow from Investing Activities
There was $567 thousand and $50 thousand cash used in investing activities during the nine months ended September 30, 2024 and 2023, respectively.
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Cash Flow from Financing Activities
During the nine months ended September 30, 2024, net cash provided by financing activities was approximately $4.4 million. This amount primarily consists of $1.8 million in net proceeds from the issuance of common shares in our public offering, $0.7 million from the At-The-Market (ATM) offering, $910 thousand proceeds from convertible note payable, and $1.0 million proceeds from exercise of warrants.
Net cash provided by financing activities during the nine months ended September 30, 2023 was approximately $3.4 million, which principally consists of net proceeds of $5.2 million through the issuance of common shares and warrants in our public offering, offset by repayments of the Loan forbearance Agreements in full.
Critical Accounting Policies and Estimates
Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. Significant estimates include those related to the valuation of goodwill impairment and intangible assets, and equity-based compensation. These estimates are based on historical experience and assumptions believed to be reasonable under current conditions. It’s important to note that actual results could differ from these estimates.
Critical accounting policies are those that we consider the most critical to understanding our financial condition and results of operations. The accounting policies we believe to be most critical to understanding our financial condition and results of operations are discussed below. As of September 30, 2024, there have been no significant changes to our critical accounting estimates nor to our recently issued accounting pronouncements, except as described in Note 2 to our consolidated financial statements.
Equity-Based Compensation: We estimate the fair value of stock options granted using the Black-Scholes option pricing model, which requires input of subjective assumptions. The model inputs include expected stock price volatility, expected term, risk-free interest rate, and dividend yield. The assumptions about future stock price volatility and the option’s expected term involve significant judgments based on historical data and future expectations. The reported equity-based compensation expense is sensitive to changes in the volatility assumption. An increase in expected volatility could materially impact the amount of compensation expense recognized.
Intangible Assets: Identifiable intangible assets, distinguishable either by separability from the acquired entity or through contractual or other legal rights, are valued and reported independently from goodwill. These assets include, but are not limited to, trademarks, customer relationships, proprietary technology, and patents. The fair value of these intangible assets is determined at the time of acquisition and is subject to subsequent impairment tests.
The fair value of identifiable intangible assets is estimated using income, market, or cost approach methods. The income approach, often applied through the discounted cash flow (DCF) method, involves projecting future cash flows attributable to the asset and discounting them to present value using a discount rate that reflects the risk associated with those cash flows. The estimation of fair value is inherently uncertain due to the assumptions and judgments involved in projecting future cash flows, determining appropriate discount rates, and estimating the useful life of each asset.
Over the reporting period, changes in market conditions, technological advancements, or strategic shifts in the business may necessitate revisions to the assumptions used in the valuation of identifiable intangible assets. Management closely monitors these factors and will adjust the valuation of intangible assets as appropriate, reflecting the impact of any such changes in our financial statements.
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Goodwill Impairment
Goodwill Impairment Testing: The process requires an annual test for impairment of goodwill, and more frequent testing if certain indicators suggest that the goodwill might be impaired. This assessment involves comparing the carrying amount of a reporting unit, including goodwill, to its fair value. Key estimates in determining fair value include: a) Cash Flow Projections: Utilizing the DCF method, management estimates future cash flows based on current performance, business plans, and expected market growth, introducing judgment due to forecasting uncertainties. b) Discount Rate: The discount rate, reflecting the WACC and adjusted for unit-specific risks, is crucial for present value calculations, with changes significantly affecting fair value estimations; c) Long-term Growth Rates: Assumptions on sustainable growth rates impact the terminal value in the DCF model, thus influencing the overall fair value of the reporting unit.
Impairment Loss Calculation: The impairment loss, representing the excess of the carrying amount of goodwill over its implied fair value, is highly sensitive to the estimates and assumptions used in the fair value calculation. Small changes in cash flow projections, discount rates, or long-term growth rates can result in significant adjustments to the impairment loss recognized in the income statement. Given the dynamic nature of business conditions, technological advancements, and market competition, estimates used in goodwill impairment testing may change from one period to another. Management is tasked with regularly reviewing and updating these estimates to reflect the latest available information and market conditions.
Once an impairment loss is recognized, it is not reversible in subsequent periods. This finality places additional importance on the accuracy and reasonableness of the underlying estimates and assumptions.
Impairment of Long-Lived Assets
Our company evaluates long-lived assets, including capitalized software, for impairment when there are indicators that the carrying amount may not be recoverable. This process involves comparing the carrying amount to the expected future undiscounted cash flows from the asset. If the carrying amount exceeds the expected cash flows, an impairment charge is recognized to reduce the asset’s carrying amount to its fair value.
Indicators of impairment include significant underperformance against projections, market or economic downturns, and technological obsolescence. The fair value is determined using market data or discounted cash flow models. An impairment loss is recorded as an expense immediately.
Recent Accounting Pronouncements
As of September 30, 2024, there have been no significant changes to our recently issued accounting pronouncements, except as described in Note 2 to our consolidated financial statements.
Off-Balance Sheet Arrangements
We do not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, that would have been established to facilitate off-balance sheet arrangements (as that term is defined in Item 303(a)(4)(ii) of Regulation S-K) or other contractually narrow or limited purposes. As such, we are not exposed to any financing, liquidity, market or credit risk that could arise if we had engaged in those types of relationships. We enter into guarantees in the ordinary course of business related to the guarantee of our own performance.
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Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Because we are allowed to comply with the disclosure obligations applicable to a “smaller reporting company,” as defined by Rule 12b-2 of the Exchange Act, with respect to this Form 10-Q, we are not required to provide the information required by this item.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including the Chief Executive Officer and the Chief Financial Officer, we evaluated the effectiveness of the design and operation of our “disclosure controls and procedures” (as defined in Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of September 30, 2024.
Changes in Internal Control over Financial Reporting
There have not been any changes in our internal control over financial reporting during the nine months ended September 30, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II - Other Information
Item 1. Legal Proceedings
NCR Lawsuit
On November 30, 2022, AppTech filed a complaint against NCR Payment Solutions, LLC in the United States District Court for the Southern District of California.
In March 2024, the Company and NCR reached a Settlement and Release Agreement. Both parties expressly denied any liability and no further actions are required by either party.
Infinios Financial Services (formerly NEC Payments B.S.C.)
On October 1, 2020, the Company entered into a strategic partnership with Infinios Financial Services BSC (formally NEC Payments B.S.C) (“Infinios”) through a series of agreements, which included the following: (a) Subscription License and Services Agreement; (b) Digital Banking Platform Operating Agreement; (c) Subscription License Order Form; and (d) Registration Rights Agreement (collectively, the “Agreements”). On February 11, 2021, the Company entered into an amended and restated Subscription License and Services Agreement, Digital Banking Platform Operating Agreement and Subscription License Order Form with Infinios (collectively, the “Restated Agreements”). The gross total fees due under the Restated Agreements are $2.2 million excluding pass-through costs associated with infrastructure hosting fees. In the years of 2021 and 2022, the Company paid Infinios $1.8 million and issued to an Infinios’ affiliate about 1,895,948 shares of common stock of the Company.
On May 4, 2023, unsatisfied with Infinios’ performance of its contractual obligations, the Company notified Infinios of its intent to terminate its relationship and commenced a good-faith negotiation with Infinios regarding the termination terms. In June 2023, Infinios turned off all its services, and the Company wrote off the $6.1 million net capitalized asset as it was deemed to be impaired. On or about October 5, 2023, Infinios filed a demand for arbitration and a Statement of Claim before the International Centre for Dispute Resolution, (the “Arbitration Claim”). In the Arbitration Claim, Infinios asserts claims for breach of contract, quantum meruit, and account stated. Infinios alleges damages of $598,525, and asserts a demand for the grant and registration of shares.
On November 13, 2023, the Company filed an Answer to the Arbitration Claim, along with Counterclaims for breach of contract, fraudulent inducement, unjust enrichment, breach of fiduciary duty, and breach of the covenant of good faith and fair dealing. At a Preliminary Hearing held on February 22, 2024, hearing dates of August 12 and 13, 2024, August 19 and 20, 2024, and October 21 and 22, 2024 were scheduled.
On August 8, 2024, the Company entered into a Settlement Agreement and Mutual Release with Infinios Solutions (Bahrain) W.L.L. and Infinios Financial Services B.S.C. The terms of this Settlement Agreement are confidential. On October 29, 2024, the Company agreed to additional compensation payments to Infinios if the Settlement Payment is not made within specified time frames. If the Settlement Payment is not fully settled by October 21, 2024, additional compensation of $25,000 will apply, with further incremental amounts added based on the timing of the settlement, potentially reaching up to $80,000. These additional payments will accrue every two weeks if the Settlement Payment and any additional accrued compensation are not fully paid by December 9, 2024.
The terms of the Settlement Agreement and Amendment do not currently result in any additional amounts payable outside what has already been accrued by the Company. Upon fulfilling the terms of the Settlement Agreement, both parties have agreed to jointly file for the dismissal and termination of the ongoing arbitration. This process is anticipated to be completed before the end of November 2024.
Former Employees
Following unsuccessful negotiations regarding severance payments, three former employees filed a lawsuit against the Company in May 2024 concerning their severance claims. After reviewing the case details, including the lawsuit, the Company has assessed that it is less likely than not that a severance obligation will be incurred. Given this assessment, the Company has determined that no accrual for severance payments is necessary as of September 30, 2024.
The case is ongoing, with key proceedings scheduled for the first half of 2025. The parties are encouraged to pursue Alternative Dispute Resolution (ADR) no later than March 21, 2025, to potentially resolve the matter before trial. The Company will continue to monitor the case and reassess its legal obligations as necessary.
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Item 1A. Risk Factors.
As a smaller reporting company, as defined in Rule 12b-2 of the Exchange Act, we are not required to provide the information required by this Item.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
During the quarter ended September 30, 2024, the Company has issued unregistered securities to the persons described below. We believe that each transaction was exempt from the registration requirements of the Securities Act by virtue of Section 4(a)(2) of the Securities Act thereof as a transaction not involving a public offering. The recipients both had access, through their relationship with us, to information about us.
During the nine months ended September 30, 2024, the Company granted 485,000 shares of common stock, to several consultants in connection with business development and professional services. The Company valued the common stock issuances at $0.5 million, based upon the closing market price of the Company’s common stock on the date of the agreement.
On July 10, 2024, the Company closed a private placement offering (the “Private Placement Offering”), consisting of (i) a 6% convertible debenture (the “Debenture”) with a principal amount of $1,100,000, pursuant to which 2,179,440 shares of common stock (the “Debenture Shares”) are issuable upon the conversion of the Debenture, (ii) a warrant (the “Warrant”) to purchase up to 750,000 shares of the Company’s common stock. In connection with the Private Placement Offering, the Company also issued an aggregate of 100,000 shares of restricted common stock (the “Commitment Shares”) on the closing date, with 50,000 shares issued to the Purchaser and 50,000 shares issued to the Purchaser’s designee. - See Note 5. Note Payable - Convertible Note
On August 28, 2024, the Company entered into a definitive agreement with a certain holder of its certain existing warrants (the “Existing Warrants”), for the exercise of the Existing Warrants to purchase an aggregate of 1,666,667 shares of its common stock having an exercise price of $2.74 per share and issued in October 2023, at a reduced exercise price of $0.70 per share (the “Warrant Inducement Agreement”). Pursuant to the Warrant Inducement Agreement, in consideration for the immediate exercise of the Existing Warrants for cash, the Company issued new unregistered warrants (the “New Warrants”) to purchase up to an aggregate of 3,333,334 shares of common stock (the “New Warrant Shares”) at an exercise price of $0.70 per share (the “Inducement Transaction”). The New Warrants will be exercisable six months following the date of issuance and have a term of five and one-half years from the date of issuance.
Item 3. Defaults Upon Senior Securities.
Not applicable.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
a. During the quarter ended September 30, 2024, there was no information required to be disclosed in a report on Form 8-K which was not disclosed in a report on Form 8-K.
b. During the quarter ended September 30, 2024, there were no material changes to the procedures by which members may recommend nominees to our board of directors.
c. During the quarter ended September 30,
2024, no director or officer
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Item 6. Exhibits.
EXHIBIT INDEX
| Exhibit Number | Exhibit Title | |
| 2.1 | Amendment to the Membership Interest Purchase Agreement, dated December 28, 2023, by and between AppTech Payments Corp., Alliance Global Partners, LLC and Chris Leyva (filed as Exhibit 2.1 to Form 8-K as filed on May 3, 2024 and incorporated herein by reference) | |
| 2.2 | Amendment to the Membership Interest Purchase Agreement, dated January 31, 2024, by and between AppTech Payments Corp., Alliance Global Partners, LLC and Chris Leyva (filed as Exhibit 2.2 to Form 8-K as filed on May 3, 2024 and incorporated herein by reference) | |
| 2.3 | Amendment to the Membership Interest Purchase Agreement, dated March 1, 2024, by and between AppTech Payments Corp., Alliance Global Partners, LLC and Chris Leyva (filed as Exhibit 2.3 to Form 8-K as filed on May 3, 2024 and incorporated herein by reference) | |
| 2.4 | Amendment to the Membership Interest Purchase Agreement, dated April 29, 2024, by and between AppTech Payments Corp., Alliance Global Partners, LLC and Chris Leyva (filed as Exhibit 2.4 to Form 8-K as filed on May 3, 2024 and incorporated herein by reference) | |
| 3.1 | AppTech Corp. Articles of Conversion filed October 25, 2006 (filed as Exhibit 3.1 to the Registrant’s Annual Report on Form 10-K, as filed on March 30, 2020, and incorporated herein by reference) | |
| 3.2 | AppTech Corp. Articles of Incorporation filed October 25, 2006 (filed as Exhibit 3.2 to the Registrant’s Annual Report on Form 10-K, as filed on March 30, 2020, and incorporated herein by reference) | |
| 3.3 | AppTech Corp. Certificate of Designation filed May 09, 2007(filed as Exhibit 3.3 to the Registrant’s Annual Report on Form 10-K, as filed on March 30, 2020, and incorporated herein by reference) | |
| 3.4 | AppTech Corp. Certificate of Correction filed June 04, 2007 (filed as Exhibit 3.4 to the Registrant’s Annual Report on Form 10-K, as filed on March 30, 2020, and incorporated herein by reference) | |
| 3.5 | AppTech Corp. Certificate of Designation filed June 06, 2007 (filed as Exhibit 3.5 to the Registrant’s Annual Report on Form 10-K, as filed on March 30, 2020, and incorporated herein by reference) | |
| 3.6 | AppTech Corp. Amendment to Certificate of Designation After Issuance of Class or Series filed November 17, 2008 (filed as Exhibit 3.6 to the Registrant’s Annual Report on Form 10-K, as filed on March 30, 2020, and incorporated herein by reference) | |
| 3.7 | AppTech Corp. Certificate of Amendment filed October 26, 2009 (filed as Exhibit 3.7 to the Registrant’s Annual Report on Form 10-K, as filed on March 30, 2020, and incorporated herein by reference) | |
| 3.8 | AppTech Corp. Certificate of Amendment filed October 27, 2009 (filed as Exhibit 3.8 to the Registrant’s Annual Report on Form 10-K, as filed on March 30, 2020, and incorporated herein by reference) |
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| 3.9 | AppTech Corp. Certificate of Designation filed April 21, 2010 (filed as Exhibit 3.9 to the Registrant’s Annual Report on Form 10-K, as filed on March 30, 2020, and incorporated herein by reference) | |
| 3.10 | AppTech Corp. Amendment to Certificate of Designation After Issuance of Class or Series filed April 27, 2010 (filed as Exhibit 3.10 to the Registrant’s Annual Report on Form 10-K, as filed on March 30, 2020, and incorporated herein by reference) | |
| 3.11 | AppTech Corp. Certificate of Change filed July 22, 2010 (filed as Exhibit 3.11 to the Registrant’s Annual Report on Form 10-K, as filed on March 30, 2020, and incorporated herein by reference) | |
| 3.12 | AppTech Corp. Amendment to Certificate of Designation After Issuance of Class or Series filed October 26, 2010 (filed as Exhibit 3.12 to the Registrant’s Annual Report on Form 10-K, as filed on March 30, 2020, and incorporated herein by reference) | |
| 3.13 | AppTech Corp. Amendment to Certificate of Designation After Issuance of Class or Series filed October 26, 2010 (filed as Exhibit 3.13 to the Registrant’s Annual Report on Form 10-K, as filed on March 30, 2020, and incorporated herein by reference) | |
| 3.14 | AppTech Corp. Amendment to Certificate of Designation After Issuance of Class or Series filed October 28, 2010 (filed as Exhibit 3.14 to the Registrant’s Annual Report on Form 10-K, as filed on March 30, 2020, and incorporated herein by reference) | |
| 3.15 | AppTech Corp. Amendment to Certificate of Designation After Issuance of Class or Series filed April 08, 2011 (filed as Exhibit 3.15 to the Registrant’s Annual Report on Form 10-K, as filed on March 30, 2020, and incorporated herein by reference) | |
| 3.16 | AppTech Corp. Certificate of Amendment filed June 06, 2011 (filed as Exhibit 3.16 to the Registrant’s Annual Report on Form 10-K, as filed on March 30, 2020, and incorporated herein by reference) | |
| 3.17 | AppTech Corp. Articles of Domestication filed July 18, 2011 (filed as Exhibit 3.17 to the Registrant’s Annual Report on Form 10-K, as filed on March 30, 2020, and incorporated herein by reference) | |
| 3.18 | AppTech Corp. Bylaws dated May 07, 2013 (filed as Exhibit 3.18 to the Registrant’s Annual Report on Form 10-K, as filed on March 30, 2020, and incorporated herein by reference) | |
| 3.19 | AppTech Corp. Certificate of Domestication filed July 09, 2013 (filed as Exhibit 3.19 to the Registrant’s Annual Report on Form 10-K, as filed on March 30, 2020, and incorporated herein by reference) | |
| 3.20 | AppTech Corp. Articles of Amendment filed October 31, 2013 (filed as Exhibit 3.20 to the Registrant’s Annual Report on Form 10-K, as filed on March 30, 2020, and incorporated herein by reference) | |
| 3.21 | AppTech Corp. Certificate of Incorporation filed July 29, 2015 (filed as Exhibit 3.21 to the Registrant’s Annual Report on Form 10-K, as filed on March 30, 2020, and incorporated herein by reference) | |
| 3.22 | AppTech Corp. Bylaws (Amended and Restated) dated March 27, 2020 (filed as Exhibit 3.22 to the Registrant’s Annual Report on Form 10-K, as filed on March 30, 2020, and incorporated herein by reference) | |
| 3.23 | AppTech Certificate of Incorporation filed with the Secretary of State of Delaware dated December 13, 2021 (filed as Exhibit 3.23 to the Registrant’s Registration Statement on Form S-1, as filed on December 15, 2021, and incorporated herein by reference) |
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| 3.24 | AppTech Certificate of Correction filed with the Secretary of State of Delaware dated December 23, 2021 (filed as Exhibit 3.24 to the Registrant’s Registration Statement on Form S-1, as filed on December 23, 2021, and incorporated herein by reference) | |
| 3.25 | AppTech Certificate of Conversion filed with the Secretary of State of Delaware dated December 23, 2021 (filed as Exhibit 3.25 to the Registrant’s Registration Statement on Form S-1, as filed on December 23, 2021, and incorporated herein by reference) | |
| 3.26 | AppTech Certificate of Correction filed with the Secretary of State of Delaware dated December 23, 2021 (filed as Exhibit 3.26 to the Registrant’s Registration Statement on Form S-1, as filed on January 3, 2022, and incorporated herein by reference) | |
| 3.27 | AppTech Certificate of Amendment filed with the Secretary of State of Delaware dated December 27, 2021 (filed as Exhibit 3.27 to the Registrant’s Registration Statement on Form S-1, as filed on January 3, 2022, and incorporated herein by reference) | |
| 3.28 | AppTech Amended and Restated Bylaws (filed as Exhibit 3.22 to the Registrant’s Registration Statement on Form S-1, as filed on December 17, 2021, and incorporated herein by reference) | |
| 4.1 | Form of Debenture, dated July 10, 2024, in the principal amount of $1,100,000 (filed as Exhibit 4.1 to the Registrant’s Current Report on Form 8-K, as filed on July 12, 2024, and incorporated herein by reference) | |
| 4.2 | Form of Warrant, dated July 10, 2024 (filed as Exhibit 4.2 to the Registrant’s Current Report on Form 8-K, as filed on July 12, 2024, and incorporated herein by reference) | |
| 4.3 | Form of New Warrant (filed as Exhibit 4.1 to the Registrant’s Current Report on Form 8-K, as filed on August 28, 2024, and incorporated herein by reference) | |
| 10.1 | Form of Securities Purchase Agreement, dated July 10, 2024 (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, as filed on July 12, 2024, and incorporated herein by reference) | |
| 10.2 | Form of Registration Rights Agreement, dated July 10, 2024 (filed as Exhibit 10.2 to the Registrant’s Current Report on Form 8-K, as filed on July 12, 2024, and incorporated herein by reference) | |
| 10.3 | Form of Warrant Inducement Agreement, dated August 28, 2024, by and between AppTech Payments Corp. and the Purchaser (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, as filed on August 28, 2024, and incorporated herein by reference) | |
| 31.1 | Certification of the Chief Executive Officer under Section 302 of the Sarbanes-Oxley Act of 2002 dated November 14, 2024 | |
| 31.2 | Certification of the Chief Financial Officer under Section 302 of the Sarbanes-Oxley Act of 2002 dated November 14, 2024 | |
| 32.1 | Certification of the Chief Executive Officer under Section 906 of the Sarbanes-Oxley Act of 2002 dated November 14, 2024 | |
| 32.2 | Certification of the Chief Financial Officer under Section 906 of the Sarbanes-Oxley Act of 2002 dated November 14, 2024 | |
| 101.INS | Inline XBRL Instance Document | |
| 101.SCH | Inline XBRL Schema Document | |
| 101.CAL | Inline XBRL Calculation Linkbase Document | |
| 101.DEF | Inline XBRL Definition Linkbase Document | |
| 101.LAB | Inline XBRL Label Linkbase Document | |
| 101.PRE | Inline XBRL Presentation Linkbase Document | |
| 104.0 | Cover Page Interactive Data File (Embedded within the Inline XBRL document) |
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Signatures
Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| AppTech Payments Corp. | ||
| Date: November 18, 2024 | By: | /s/ Luke D’Angelo |
| Name: | Luke D’Angelo | |
| Title: | Chief Executive Officer | |
| Date: November 18, 2024 | By: | /s/ Meilin Yu |
| Name: | Meilin Yu | |
| Title: | Chief Financial Officer and Treasurer | |
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