美国
证券交易委员会
华盛顿特区 20549
表格
(标记一个)
| 根据1934年证券交易法第13或15(d)条款的季度报告。 |
截至2024年6月30日季度结束
或
| 根据1934年证券交易法第13或15(d)条款的过渡报告 |
从______________到______________的过渡期间
委员会文件号码：
（根据其章程所指定的正式名称）
| 7389 | ||||
|
(依据所在地或其他管辖区) 的注册地或组织地点) |
(主要标准产业 其他 |
(国税局雇主 识别号码) |
(
(注册人主要执行办公室的地址，包括邮政编码和电话号码，包括区号)
根据《证券法》第12(b)条注册的证券：
| 每种类别的名称 | 交易标的（s） | 每个注册交易所的名称 | ||
| 资本市场 | ||||
| 资本市场 |
根据法案第12(g)条注册的证券:
None
请选择核实发行人：(1)是否已提交在前12个月内根据1934年证交法第13条或第15(d)条所需的所有报告（或发行人需要提交此类报告的较短期间），以及(2)是否在过去的90天内受过此类报告要求的条款。
请以勾选表示，申报人在过去12个月内（或者在申报人被要求提交这些文件的较短期间内）是否已电子提交依照Regulation S-t第405条的规定应提交的每份互动数据文件。
请勾选登记人是否为大型加速报告人、加速报告人、非加速报告人、小型报告公司或新兴成长公司。 请参见《交易所法》第120亿2条中对「大型加速报告人」、「加速报告人」、「小型报告公司」及「新兴成长公司」的定义。
| 大型加速归档人 | o | 加速归档人 | o | |
| x | 小型报告公司 | |||
| 新兴成长型企业 |
如果是新兴成长型企业，请打勾表示公司已选择不使用股票交易所法13(a)条规定提供的延长过渡期来遵守任何新的或修订的财务会计准则。 o
请以勾选标记表示注册人是否为空壳公司（根据法案第120亿2条的定义）。 是 o 没有
截至二零二四年十一月十四日，注册人有 已发行及未发行的普通股份。
解说说明 注释
此修正案仅为提供有关在季度结束后期间发生的某些股票发行定价的澄清。公司收到投资者提出的问题，决定提交此修正案以协助投资者理解交易过程。
AppTech支付公司
10-Q 表格
目录
| 页 | ||
| 第一部分 | ||
| 关于前瞻性陈述和预测的特别说明 | 3 | |
| 项目 1。 | 无审计的合并财务报表 | 4 |
| 项目2。 | 管理层对 财务状况 和 经营成果 的讨论与分析 | 25 |
| 项目3。 | 关于市场风险的定量和定性披露 | 34 |
| 项目4。 | 控制项和程序 | 34 |
| 第二部分 | ||
| 项目 1。 | 法律程序 | 35 |
| 项目 1A。 | 风险因素 | 36 |
| 项目2。 | 未注册的股权证券销售及资金用途 | 36 |
| 项目3。 | 高级证券的默认情况 | 36 |
| 项目4。 | 矿山安全披露 | 36 |
| Item 5. | 其他资讯 | 36 |
| Item 6. | 展品 | 37 |
| 签名 | 40 |
| 2 |
关于未来预测和展望的特别说明
在本季度10-Q表格中，有关AppTech Payments Corp.（我们、我们的、AppTech或公司）的各种声明是根据1995年《私人证券诉讼改革法案》定义的“前瞻性声明”。前瞻性声明涉及重大风险和不确定性。除历史事实的陈述之外，本报告中有关我们的策略、未来运营、未来财务状况、未来收入、预计成本、前景、计划和管理目标的所有声明均为前瞻性声明。这些声明受到风险和不确定性的影响，并且基于目前可用的信息。诸如“预期”、“相信”、“估计”、“期望”、“打算”、“可能”、“计划”、“考虑”、“预测”、“项目”、“目标”、“可能”、“潜在”、“继续”、“进行中”、“将”、“会”、“应该”、“能够”或这些词的否定以及类似表达或词语，均可识别为前瞻性声明。反映在我们前瞻性声明中的事件和情况可能不会发生，实际结果可能与我们前瞻性声明中预测的结果有重大差异。可能导致实际结果不同的重要因素包括：
| · | 与客户搭载到我们的平台相关的延迟和不确定性； | |
| · | 与新的潜在营业收入来源及其相应合同义务相关的重大投资和成本； | |
| · | 由于终端用户需求减少、意外竞争、监管问题或其他意外情况导致销售减缓或减少； | |
| · | 关于不利宏观经济条件的不确定性，包括通货膨胀、经济衰退、财政和货币政策的变化、信贷收紧、利率期货上升、消费信心和支出以及高失业率； | |
| · | 对第三方的依赖，以便促进我们的自动清算所（"ACH"）和商户服务能力； | |
| · | 在其他国家延迟或未能获得未来产品的监管批准，和； | |
| · | 当前和未来的法律法规。 |
所有书面和口头的前瞻性声明 归因于我们或代表我们行动的任何人，均完全受本节中包含或提及的警示性声明的限制。我们提醒投资者不要过于依赖我们做出的或代表我们做出的前瞻性声明。我们不承担任何义务，并明确拒绝任何更新或修订前瞻性声明的义务， 无论是由于新信息、未来事件还是其他原因。然而，请查看我们在提交给证券交易委员会（SEC）的任何年度、季度或当前报告中对相关主题的进一步披露。
我们鼓励您阅读本季度报告第10-Q表格中关于我们基本报表的讨论与分析。我们无法保证实际上能达到我们预期的结果或发展；即使我们在很大程度上实现了这些结果，也无法确保它们对我们产生预期的后果或影响。因此，我们无法保证能够实现那些前瞻性陈述和估计中所述的结果。
除非上下文另有要求，在本季度报告中 表格10-Q中，词语“AppTech”、“我们”、“我们”、“注册人”或“公司” 指的是AppTech Payments Corp.
| 3 |
第一部分 – 财务信息
项目1. 财务报表
APPTECH PAYMENTS corp.
合并财务报表
未经审计的基本报表索引
(基本报表已被简化 以便于展示目的)
| 页面 | |
| 截至2024年9月30日和2023年12月31日的合并资产负债表 | 5 |
| 截至2024年和2023年9月30日的三个月和九个月合并经营报表 | 6 |
| 截至2024年和2023年9月30日的三个月和九个月合并股东权益报表 | 7 |
| 截至2024年和2023年9月30日的九个月合并现金流量表 | 8 |
| 基本报表注释 | 9 |
| 4 |
APPTECH PAYMENTS CORP.
合并资产负债表
截至2024年9月30日和2023年12月31日，
(未经审计)
(以千为单位，除股票和每股数据外)
| 9月30日 2024 | 2023年12月31日, 2023 | |||||||
| 资产 | ||||||||
| 流动资产 | ||||||||
| 现金及现金等价物 | $ | $ | ||||||
| 应收账款 | ||||||||
| 预付费用 | ||||||||
| 总流动资产 | ||||||||
| 票据应收款 | ||||||||
| 使用权资产 | ||||||||
| 安防按金 | ||||||||
| 无形资产，净值减去累计摊销 | ||||||||
| 商誉 | ||||||||
| 资本化软件开发，扣除累计折旧 | ||||||||
| 总资产 | $ | $ | ||||||
| 负债和股东权益 | ||||||||
| 流动负债 | ||||||||
| 应付账款 | $ | $ | ||||||
| 应付账款 - 相关方 | ||||||||
| 应计负债 | ||||||||
| 可转换票据应付及应计利息，扣除$的折扣后净额 | ||||||||
| 应付票据 | ||||||||
| 透过收入 | ||||||||
| 使用权负债 | ||||||||
| 总流动负债 | ||||||||
| 长期负债 | ||||||||
| 使用权负债，减去当期部分 | ||||||||
| 应付票据，扣除当前部分 | ||||||||
| 长期负债合计 | ||||||||
| 总负债 | ||||||||
| 承诺和或有事项（注7） | ||||||||
| 股东权益 | ||||||||
| 优先股： 截至2024年9月30日和2023年12月31日，各授权股份；A系列优先股：$ 面值； 截至2024年9月30日和2023年12月31日，已发行并流通的股份。 | ||||||||
| 普通股，$ 面值； 授权股份; 和 截至2024年9月30日和2023年12月31日，发行在外的股份分别为 | ||||||||
| 额外支付的资本 | ||||||||
| 累计负债 | ( | ) | ( | ) | ||||
| 总股东权益 | ||||||||
| 所有负债与股东权益 | $ | $ | ||||||
请参阅合并基本报表的附注。
| 5 |
APPTECH PAYMENTS CORP.
合并营运报表
截至2024年和2023年9月30日的三个月和九个月
(未经审计)
(以千为单位，除股票和每股数据外)
截至三个月 9月30日 | 截至九个月 9月30日 | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| 营收 | $ | $ | $ | $ | ||||||||||||
| 营收成本 | ||||||||||||||||
| 毛利润 | ||||||||||||||||
| 营业费用： | ||||||||||||||||
| 销售、一般和行政费用，包括股票基础 补偿为$和$截至2024年和2023年9月30日的三个月，分别为$和$截至2024年和2023年9月30日的九个月，分别为 | ||||||||||||||||
| 无形资产减值 | ||||||||||||||||
| 研究和开发，包括 股票基础补偿为$和 $截至2024年和2023年9月30日的三个月，$和 $截至2024年和2023年9月30日的九个月，$ | ||||||||||||||||
| 营业费用总额 | ||||||||||||||||
| 营业亏损 | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| 其他收入（费用） | ||||||||||||||||
| 利息费用 | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| 衍生负债公允价值变化 | ||||||||||||||||
| 债务折扣摊销 | ( | ) | ( | ) | ||||||||||||
| 其他收入（费用） | ( | ) | ( | ) | ( | ) | ||||||||||
| 总其他费用 | ( | ) | ( | ) | ( | ) | ||||||||||
| 税前损失 | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| 所得税准备 | ||||||||||||||||
| 净亏损 | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| 与认股权证重置相关的视同分红 | ( | ) | ( | ) | ( | ) | ||||||||||
| 归属于普通股股东的净亏损 | $ | ( | ) | $ | ( | ) | ( | ) | ( | ) | ||||||
| 每普通股基本和摊薄的净亏损 | $ | ) | $ | ) | $ | ) | $ | ) | ||||||||
| 用于每股基本和摊薄金额的加权平均股份数 | ||||||||||||||||
请参阅合并基本报表的附注。
| 6 |
APPTECH PAYMENTS CORP.
股东权益合并报表
截至2024年和2023年9月30日的三个月和九个月
(未经审计)
(以千为单位，除股票和每股数据外)
系列 A 优先股 | 普通股 | 其他 已付- | 累计 | Stockholders’ | ||||||||||||||||||||||||
| Shares | 金额 | Shares | 金额 | 在 资本 | Deficit | Equity | ||||||||||||||||||||||
| 截至2022年12月31日的余额 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
| 净亏损 | – | – | ( | ) | ( | ) | ||||||||||||||||||||||
| 股票基础补偿 | – | |||||||||||||||||||||||||||
| 更改Warrants定价 | – | – | ( | ) | ||||||||||||||||||||||||
| 发行股份出售的净收益 | – | |||||||||||||||||||||||||||
| 截至2023年3月31日的余额 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
| 净亏损 | – | – | ( | ) | ( | ) | ||||||||||||||||||||||
| 基于股票的 补偿 | – | |||||||||||||||||||||||||||
| 截至2023年6月30日的余额 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
| 净亏损 | – | – | ( | ) | ( | ) | ||||||||||||||||||||||
| 股票基础补偿 | – | |||||||||||||||||||||||||||
| 预付服务的股票发行 | – | |||||||||||||||||||||||||||
| 期权行使 | – | |||||||||||||||||||||||||||
| ATM发行的净收益 | – | |||||||||||||||||||||||||||
| 截至2023年9月30日的余额 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
系列 A 优先股 | 普通股 | 其他 已支付- | 累计 | Stockholders’ | ||||||||||||||||||||||||
| Shares | 金额 | Shares | 金额 | 在 资本 | Deficit | Equity | ||||||||||||||||||||||
| 截至2023年12月31日的余额 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
| 净亏损 | – | – | ( | ) | ( | ) | ||||||||||||||||||||||
| 股票基础补偿 | – | |||||||||||||||||||||||||||
| 普通股销售的净收益 | – | |||||||||||||||||||||||||||
| 2024年3月31日的余额 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
| 净亏损 | – | – | ( | ) | ( | ) | ||||||||||||||||||||||
| 股票基础补偿 | – | |||||||||||||||||||||||||||
| 已发行股份 伴随应付票据 | – | |||||||||||||||||||||||||||
| 截至2024年6月30日的余额 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
| 净亏损 | – | – | ( | ) | ( | ) | ||||||||||||||||||||||
| 股票基础补偿 | – | |||||||||||||||||||||||||||
| 发行可转换债券的股份 应付票据 | – | |||||||||||||||||||||||||||
| 发行成本 | – | – | ( | ) | ( | ) | ||||||||||||||||||||||
| 与可转换票据一同发行的Warrants 应付票据 | – | – | ||||||||||||||||||||||||||
| 权证重新定价 | – | – | ( | ) | ||||||||||||||||||||||||
| Warrant行使，扣除发行成本 | – | |||||||||||||||||||||||||||
| Warrant行使 - 无现金 | – | |||||||||||||||||||||||||||
| 截至2024年9月30日的余额 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
请参阅合并基本报表的附注。
| 7 |
APPTECH PAYMENTS CORP.
现金流量合并报表
截至2024年和2023年9月30日的九个月
(未经审计)
(以千为单位，除股票和每股数据外)
| 2024年9月30日 | 2023年9月30日 | |||||||
| 经营活动产生的现金流量： | ||||||||
| 净亏损 | $ | ( | ) | $ | ( | ) | ||
| 调整净损失以对账经营活动中使用的现金: | ||||||||
| 股票基础补偿 | ||||||||
| 注销股票回购负债 | ( | ) | ||||||
| 注销应收票据 | ||||||||
| 无形资产减值 | ||||||||
| 可转换票据、Warrants 以及衍生负债结算收益 | ( | ) | ||||||
| 债务折扣摊销 | ||||||||
| 无形资产和软件的摊销 | ||||||||
| 衍生负债公允价值变动 | ( | ) | ||||||
| 经营资产与负债的变动： | ||||||||
| 应收账款 | ( | ) | ||||||
| 预付费用 | ||||||||
| 应付账款 | ||||||||
| 应计负债 | ( | ) | ( | ) | ||||
| 透过收入 | ( | ) | ||||||
| 使用权资产和负债，净额 | ( | ) | ( | ) | ||||
| 用于经营活动的净现金 | ( | ) | ( | ) | ||||
| 投资活动的现金流量 | ||||||||
| 资本化的软件开发 | ( | ) | ( | ) | ||||
| 其他资产 | ( | ) | ||||||
| 投资活动使用的净现金 | ( | ) | ( | ) | ||||
| 融资活动产生的现金流： | ||||||||
| 应付票据收入 | ||||||||
| 对关联方贷款的还款 | ( | ) | ||||||
| 可转换票据收入 | ||||||||
| 普通股销售收入 | ||||||||
| Warrants行使所得 | ||||||||
| 应付票据的还款 | ( | ) | ( | ) | ||||
| 可转换票据的还款 | ( | ) | ||||||
| 行使股票期权获得的收益 | ||||||||
| 融资活动提供的净现金 | ||||||||
| 现金及现金等价物变动 | ( | ) | ( | ) | ||||
| 期初的现金及现金等价物 | ||||||||
| 期末的现金及现金等价物 | $ | $ | ||||||
| 现金流信息的补充披露： | ||||||||
| 支付的利息 | $ | $ | ||||||
| 支付的所得税现金 | $ | $ | ||||||
| 非现金投资和融资活动 | ||||||||
| 为预付服务发行股票 | $ | $ | ||||||
| 以应付票据发行普通股 | $ | $ | ||||||
| 以可转换票据发行普通股 | $ | $ | ||||||
| 与可转换票据一起发行的Warrants | $ | $ | ||||||
| 注销股票回购负债 | $ | $ | ||||||
请参阅合并基本报表的附注。
| 8 |
APPTECH PAYMENTS CORP.
合并基本报表附注
(以千为单位，除每股数据外)
注释 1 - 组织和业务描述
AppTech Payments Corp.（"AppTech"或 "公司"），是一家位于特拉华州的公司，总部设在加利福尼亚州卡尔斯巴德，是一家金融科技公司。AppTech利用创新的支付 处理和数字银行技术，增强其核心商户服务能力。公司拥有专利和自主知识产权的 软体将提供进步且可适应的产品，这些产品通过一系列协同的提案，直接面向商户、银行机构和业务企业。
AppTech拥有一个高度安全的数字支付平台，我们正在进一步开发数字银行产品，以推动客户及其客户的商业体验。基于行业板块对支付和银行协议的标准，我们将提供独立产品和完全集成的解决方案，从而提供创新、无与伦比的支付、银行和金融服务体验。我们的处理技术可以直接使用，也可以通过我们的RESTful API进行调用，以构建完全品牌化和可定制的体验，同时支持令牌化、多渠道和多方式交易。
AppTech股票的标的为“APCX” 其Warrants的标的为“APCXW”，在纳斯达克资本市场（"纳斯达克"）交易。
在2023年6月，公司与InstaCash及PayToMe.co签订了 许可协议。根据与这些公司的安排，公司协商获得了相当于每方总稀释后资本股本7.5%的优先股。截至本次提交文件之日，股份尚未 发放给AppTech。InstaCash的首席执行官还为公司提供投资者关系服务。此外，PayToMe.co是AppTech的关联方。公司的高级成员在PayToMe.co的董事会任职，而AppTech的财务长（“CFO”）是其创始人及首席执行官（“CEO”）的配偶。
在2023年8月，公司签订了一项销售协议，允许其通过“在市场上” (ATM) 发行的方式，出售总发行价格高达1800万美元的普通股，依据其提交给SEC的S-3表格的备用注册声明。截至本次提交，由于婴儿配额的计算，公司目前无法通过ATM筹集资金。
在2023年10月13日，公司与位于内华达州的软件开发公司Alliance Partners, LLC（以FinZeo为名运营）及Chris Leyva（“卖方”）签订了会员权益购买协议（“购买协议”）。根据该协议，公司收购了卖方在Alliance Partners中的100%会员权益。此项收购的主要目的是为了获得对FinZeo知识产权、关键人员和软件平台的控制权，这对吸引公司的潜在客户至关重要。
在交易关闭后， 支付条款进行了多次修改，最后一次修改于2024年6月20日执行。有关支付计划的详细信息 以及提供给卖方的股权考虑，请参阅第8条。股东权益 - 与收购相关的发行权益 部分。
截至2024年9月30日，尚未支付的剩余款项为$
管理层解决持续经营问题的计划 考虑事项
公司经历了持续的经营亏损，主要是由于收入有限。公司的当前财务状况和持续亏损对其作为持续经营单位的能力提出了重大质疑。
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管理层正在积极寻求额外的资金 期权，并且对在这些基本报表的发行日期后的十二个月内将开始产生营业收入充满信心，尽管无法提供任何保证。
管理层打算保持充足的营运资本，并遵循谨慎的财务预测。
备注 2 - 主要会计政策摘要
财务报表基础
所附的合并未经审计的基本报表是根据美国的一般公认会计原则（“U.S. GAAP”）为中期财务信息以及证券交易委员会（“SEC”）的规则和规定编制的。 根据公司管理层的意见，所附的基本报表反映了结束于2024年9月30日和2023年9月30日的期间所需的所有调整，包括常规的、例行的调整，以公正地呈现结果。尽管管理层相信这些未经审计的基本报表中的披露足以使所提供的信息不具误导性，但根据SEC的规则和规定，通常包含在遵循U.S. GAAP编制的基本报表中的某些信息和脚注披露已被省略。
附带的合并未经审计的基本报表 应与公司财务报表及其相关的注释一起阅读，这些内容包含在公司于2024年4月1日向证券交易委员会提交的2023年12月31日结束的年度报告10-K中。截止到2024年9月30日的九个月的中期结果不一定代表预期的2024年12月31日结束的年度结果或任何未来的中期结果。
合并基础
合并未经审计的基本报表 包括AppTech Payments Corp.及其全资子公司的账目，公司是主要受益者。所有重大 内部账户和交易在合并时被消除。
估计的使用
按照公认会计原则编制基本报表要求管理层对资产和负债的报告金额以及在基本报表日期对或有资产和负债的披露作出估计和假设，并影响报告期内收入和费用的报告金额。
公司在估值时做出了关键的估计和假设 包括：股票奖励、无形资产及相关的商誉减值测试。实际结果可能与这些估计不同。
以前期间的重分类
某些前期金额已被重新分类 以符合当前期间的呈现。具体而言，公司将『应付账款 - 关联方』从合并资产负债表中的『应付账款』重新分类。因此，『应付账款 - 关联方』在2024年9月30日和2023年12月31日单独列示。
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信用风险集中度
现金及现金等价物存放在金融机构，有时余额可能超过每个支付联邦存款保险公司保险费的机构联邦保险限额250,000美元。公司从未因这些余额而遭受任何损失。
来自商户服务的应收账款由金融机构按月支付。截至2024年9月30日，
截至2024年9月30日的九个月中，
营业收入确认
财务会计准则委员会（「FASB」） 发布了会计准则更新（「ASU」）第2014-09号，编纂为会计准则汇编（「ASC」） 606 客户合同收入，该标准为实体在会计处理中提供了一种完整的模型，用于处理客户合同带来的收入。
公司提供商户处理解决方案 用于信用卡和电子支付。在所有情况下，公司作为商户和银行之间的代理，商户生成信用卡 和电子支付，而银行处理此类支付。
公司的营业收入来自于服务 根据交易金额的百分比或特定费用交易定价，具体取决于卡片或交易类型。营业收入在服务执行时记录，通常是在银行处理商户的信用卡和电子支付时。支付给渠道合作伙伴的费用被记录为营业收入的减少。
许可营业收入
公司正在积极寻求战略合作伙伴关系 协议，通过支付费用授权我们的专利组合。许可费是延期支付，并在服务期或合同期限内按月均匀确认。
无形资产和知识产权
Intellectual Property
本公司 根据无形资产经济利益的预计消费周期来摊销知识产权。通常，本公司以直线法摊销其知识产权，包括专利和其他可识别的无形资产。摊销期一般区间为三年到十五年，具体取决于资产的性质及其预计使用寿命。
首字母大写 软件开发成本
公司将与其数字支付和银行平台开发相关的某些成本资本化，包括员工薪酬和第三方开发者的咨询费用， 仅在开发很可能导致新功能或附加功能时才会资本化。在初步项目规划阶段和后实施阶段 incurred 的费用会被当作费用处理。可识别的无形资产，如收购的科技、知识产权和竞业禁止协议， 按其收购日期的公允价值记录，采用收益法和成本法的组合。资本化的软件开发成本按资产的估计使用寿命采用直线法摊销。
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商誉
公司按照ASC 350，即无形资产 - 商誉和其他（「ASC 350」）确认商誉。ASC 350要求商誉和其他具有无限寿命的无形资产每年或在事件或情况表明资产的公允价值已低于其账面价值时进行减值测试。
研发
根据ASC 730，研发（“R&D”）成本在发生时费用化。R&D成本包括获取专利和其他未证实的科技的成本、承包商费用和与我们科技平台开发相关的其他费用、合同和其他外部服务。截止到2024年和2023年9月30日的九个月内，总共的R&D成本约为$ 百万美元和$ 分别为百万美元。
基本每普通股的净利润（亏损）是通过将净利润（亏损）除以年内流通的普通股加权平均股数计算得出的。稀释后的每普通股净利润（亏损）是通过将净利润（亏损）除以年内流通的普通股加权平均股数计算得出的，并增加年内流通的潜在稀释普通股。稀释证券包括期权、Warrants和可转换的优先股。
未计入稀释每股收益的普通股等价物数量是 和 截至2024年和2023年9月30日的九个月，普通股等价物的加权平均数量未计入稀释的收入（损失）每股金额，因为这些影响是反稀释的。
| 2024年9月30日 | 2023年9月30日 | |||||||
| A系列优先股 | ||||||||
| 认股权证 | ||||||||
| 期权 | ||||||||
| 总计 | ||||||||
基于股票的补偿
公司将向员工、董事和顾问授予的所有基于股票的支付奖项视为补偿费用，包括股票、期权和Warrants的授予， 根据其估计的公允价值进行确认。对于股票奖励，公允价值基于公司普通股在授予日的收盘价格确定，并在员工、董事和顾问获得奖励所需的服务期间内确认。 对于期权和Warrants，公允价值在授予日使用适当的估值模型进行估算，同时考虑授予奖励的条款和条件。该费用也在预计服务条件满足的期间内确认。此外，公司还有多个授予协议，其中包括基于附带绩效条件的期权授予。 对于这些基于绩效的期权授予，公司在绩效标准完全满足时记录期权的公允市场价值。
新的会计公告
FASB发布ASU以修订ASC中的权威文献。到目前为止，已经有多项ASU修订了ASC的原始文本。公司认为迄今发布的ASU要么(i)提供补充指导，(ii)是技术修正，(iii)不适用于本公司，或(iv)预计不会对本公司产生重大影响。
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注释 3 – 无形资产
知识产权
公司拥有两个专利组合，包括：
移动支付科技 该组合 由四项移动科技专利组成，范围包括向移动设备交付网页内容的系统和方法、计算机-半导体 到移动双向聊天系统和方法，以及移动到移动支付。
地理位置科技 该投资组合包括 13项专利，专注于在美国任何地方通过消费者的手机，在特定地理位置和时间 参数内交付、购买或请求任何产品或服务。该投资组合包含保护所有移动广告的专利， 包括商店的移动应用程序。我们以直线法将专利摊销，从三年到15年，这大致符合无形资产的经济利益消费方式。
截至2024年9月30日和2023年12月31日，专利的总价值为$
2023年10月26日，公司收购了FinZeo，一家位于内华达州的有限责任公司。收购的无形资产的总价值为$
截至2024年9月30日及2023年12月31日的知识产权如下：
| 知识产权 | 2024年9月30日 | 2023年12月31日 | ||||||
| 期初余额 | $ | $ | ||||||
| 无形资产的收购 | ||||||||
| 摊销费用 | ( | ) | ( | ) | ||||
| 期末余额 | $ | $ | ||||||
资本化的软件开发成本
公司将与其数字支付和银行平台开发相关的某些成本资本化。
在截至2024年9月30日的九个月期间，
公司资本化了软件开发成本为$
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截至2024年9月30日，资本化的软件开发成本的总值约为$
| 2024年9月30日 | 2023年12月31日 | |||||||
| 期初余额 | $ | $ | ||||||
| 新增项目 | ||||||||
| 资产减值 | ( | ) | ||||||
| 摊销费用 | ( | ) | ( | ) | ||||
| 期末余额 | $ | $ | ||||||
请参见注释7 - 承诺和或有事项 有关的讨论 Infinios金融服务（前身为NEC Payments b.S.C.）及其资本化软体开发 成本的注销。开发成本。
商誉
在2023年10月26日，公司完成了对联盟合作伙伴有限责任公司的收购，该公司是内华达州的一家有限责任公司。购买价格的公允价值与所收购的净资产（包括组建的劳动力）之间的差额被记录为商誉。截至2024年9月30日，公司记录的商誉约为$
请参见注释1 - 购买联盟合作伙伴， 有限公司。
注意 4 – 应计负债
截至2024年9月30日和2023年12月31日的应计负债如下：
| 2024年9月30日 | 2023年12月31日 | |||||||
| 应计工资 | $ | $ | ||||||
| 防稀释条款 | ||||||||
| 应付关联方款项 | ||||||||
| 其他 | ||||||||
| 总应计负债 | $ | $ | ||||||
以下相关方要么是管理层成员，要么是董事会成员、重要股东，或者对公司具有重大影响的个人。
反稀释条款
与即将发行的股份有关 作为HotHand收购的一部分，以及与Infinios的反稀释条款，公司的其他费用累计了一个 以每股1.81美元计算的普通股股份，共计$ 千美元。这些股份将在和解协议履行后被取消并归还给公司库房，截至2024年9月30日尚未 发行给Infinios。
请参见 注 7 - 承诺和或有事项.
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应付账款 应付关联方
截至2024年9月30日，剩余应付账款为$
注释 5 – 应付票据
以下是截至2024年9月30日和2023年12月31日未偿还应付票据的总结。
应付票据
在2020年，
公司与美国小企业管理局签订了一份为期30年的无担保应付票据，金额为$
在2024年6月10日，公司与第三方贷方Black Ice Advisors, LLC签订了一项为期60天的无担保票据协议，获得资金$
截至2024年9月30日和2023年12月31日，所有未偿还的应付票据余额为$
可转换票据
在
2024年7月10日，公司完成了一项定向增发（「定向增发」），包括一份
私募增发的净收益为$
债券从发行之日起到期为十二个月，年利率为
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该债券 包括一项赎回条款，允许公司以本金金额的110%和应计利息的110%提前偿还债券。 此外，如果公司通过公开发行或私募（不包括内部投资）总共筹集150万美元或更多资金，则募集活动所得款项的50%必须用于偿还债券，除非购房者另有豁免。 还包括违约条款，规定在不遵守债券条款的情况下的具体处罚和补救措施。
Warrants 股份、认购股份
以及根据债务证券可发行的普通股股份随后根据证券法进行了注册，注册申报表为S-1表（档案号333-281409），该申报表于2024年8月22日获得SEC的有效声明。关于我们与Armistice Capital Master Fund之间的诱导交易的相关说明见第8条。Warrants 的行使价格降低至$每
股份。由于此次交易触发了债务证券的转换价格调整条款，债务证券的转换价格也降低至$
自2024年8月29日起， 本权证根据权证条款进行了无现金行使，导致发行了 可自由交易的 我们普通股股份。
截至2024年9月30日，
可转换票据的未偿余额为$
包括普通股部分价值在内的总成本分配给股本为$
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，公司与NCR达成了一项和解与释放协议。双方明确否认任何责任，且不需要任何一方采取进一步行动。
Infinios Financial Services (formerly NEC Payments B.S.C.)
2020 年 10 月 1 日，公司签订了
通过一系列措施与 Infinios Financios Services BSC（前身为 NEC Payments B.s.c）（“Infinios”）建立战略合作伙伴关系
协议，其中包括以下内容：(a) 订阅许可和服务协议；(b) 数字银行平台运营协议；
(c) 订阅许可订购表；以及 (d) 注册权协议（统称为 “协议”）。2月11日
2021年，公司签订了经修订和重述的订阅许可和服务协议，数字银行平台运营
与Infinios签订的协议和订阅许可订购表（统称为 “重述协议”）。费用总额
根据重述协议，到期金额为220万美元，其中不包括与基础设施托管费相关的直通费用。在 2021 年期间
而2022年，该公司向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
公司被授权发行 每股面值的股份，总额为 $ 截至2024年9月30日和2023年12月31日，共有 和 ，分别为， 截至2024年9月30日和2023年12月31日，外流通普通股股份数量。普通股股东有权就所有提交给股东投票的事项，按每股一票进行投票，并且不能在董事会的选举中累积投票。普通股股东有权获得董事会从合法可用资金中宣布的任何分红，因此需遵循任何未发行优先股股东的优先权和关于普通股分红支付的任何合同限制。在公司清算或解散的情况下，普通股股东有权在支付了负债和任何未发行优先股的清算优先权后，按比例分享剩余的所有资产。普通股股东没有优先认购权或其他认购权，也没有将其普通股转换为任何其他证券的权利。
公开发行
在2023年2月，公司宣布完成之前宣布的500万美元注册直接发行（「注册直接发行」），与单一机构投资者进行卖出 其普通股（「股份」）和购买最多的 股份（「Warrants」）在一次定向增发（「定向增发」）中同时进行。购买一股和一个Warrant的综合价格为3.00美元。每个Warrant的行使价格为每股普通股4.64美元，并可自2023年8月1日起行使。Warrants在其可行使之日起五年后到期。注册直接发行和同时进行的定向增发的总毛收入约为
在2023年8月，公司签订了一项销售协议，根据该协议，它可以通过「即期市场」发行最多1800万美元的普通股，依据已向SEC提交的S-3表格的 shelf注册声明。截至2024年9月30日，公司共售出 普通股，获得的净收入为$
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在2023年10月，公司与某些合格和机构投资者（「买方」）签订了一份证券购买协议（「证券购买协议」），根据该协议，公司同意向买方发行并出售总计： (i) 股份（「股份」）的公司普通股，每股面值$0.001（「普通股」）和 (ii) Warrants（「购买Warrants」）以每股$2.74的价格购买最多 普通股，购股权可在每股$2.74的价格行使（「发行」）。每股及相关购股权的发行价格为$2.10。十月的购股权将在其可行使之日起五年内到期。2023年10月26日，公司完成了发行，筹集了$
在2024年3月26日，AppTech Payments CORP.与EF Hutton LLC签订了一份承销协议，作为多个承销商的代表，涉及公开发行 普通股的股份，面值为每股0.001美元，公众购买价格为每股1.00美元。根据承销协议，公司授予承销商在45天内购买额外股份的选择权，最多可以购买 普通股的股份，按发行价格购买，减去任何承销折扣和佣金。
截至2024年9月30日，约有$
用于服务的股票
截至2024年9月30日和2023年9月30日的九个月期间，公司授予了
and 普通股股份，分别与几位顾问的业务开发和专业服务相关。公司将普通股的发行价值定为$
发行附带应付票据的股票
截至2024年9月30日的九个月内，公司发行了 普通股作为应付票据的关联交易。2024年的发行价值为$
可转换票据发行的股票
请参阅备注 5 - 应付款项 - 可转换票据。
与收购相关的发行权益
在2023年10月26日，公司完成了对FinZeo的收购。卖方收到了现金和股票作为购买价格的一部分。 见注释 1 - 对Alliance Partners, LLC的购买。
截至 2024年9月30日
与Alliance Partners, LLC的采购协议下的付款条款被修订为如下：
考虑到 调整支付计划，Chris Leyva 收到了总共 股息支付公司 和 购买该公司股票的期权。
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股票 期权
公司授予股票期权作为员工薪酬的一部分，并在归属期内确认这些期权的费用。如果员工未满足某些条件，例如销售目标，或者在期权归属之前离开公司，这些期权将被视为作废。
在2021年12月7日，董事会授权公司的股权激励计划，以促进向员工（包括我们指定的高管）、董事、独立承包商、商人、推荐合作伙伴、渠道合作伙伴以及我们公司的员工授予股权激励。该计划对吸引、保留和激励这些关键人员至关重要，这对我们的长期成功至关重要。 在2023年5月，股东批准为公司的股权激励计划增加70万股，授权的总股数达到 。在2024年5月，股东批准在新通过的2024年股权激励计划（「2024计划」）下增加 股份，该计划完全取代了之前的计划。因此，在2024计划下授权的普通股总数为 股份，截止到2024年9月30日还有 股份可供发行。
在2024年6月，公司取消了
在2024年3月20日，公司的已归属和未行使的股票期权到期期限被延长至自授予日期起10年，适用于当前员工和顾问。在修改日期和修改前均计算了公允价值。
截至2024年9月30日的九个月期间，公司记录了期权修改费用为$
截至2024年9月30日的九个月期间，公司授予了 购买普通股的期权。这些授予包括：
| 1. | 向顾问授予期权，归属条件取决于达到指定的销售里程碑。这些期权的公允价值为非计划期权，期限为一年，将在归属显著可能时作为费用予以确认。这些期权的行权价为$ 每股$ 每股的公允价值为$在发行日期。公司在截至2024年9月30日的九个月内未记录任何基于股票的补偿费用，因为这些并未被确定为可能归属。 | |
| 2. | 在2024年4月4日，公司授予 当前员工和顾问的期权，行权价为$，有效期为十年，授予日期的公允价值为$。公司在此授予中确认了$ 千相关的费用。这些期权在授予日期完全归属。 | |
| 3. | 在截至2024年9月30日的九个月期间，公司授予了 期权给董事会和顾问。这些期权有十年的到期时间，行使价格范围从$ 至$ 每股。根据授予日期确定的这些期权的公允价值，范围从$ 至$ 每股。 | |
| 4. | 在2024年7月3日，公司授予了 在权益计划下的期权，以及大约 向员工和顾问授予的计划外期权数量为百万。这些期权自授予日期起十年后到期，行使价格为$ 每股$，在发行日期的公允价值为$ 这些期权的归属取决于达成特定的公司里程碑。当归属变得可能时，这些期权的公允价值将被确认为费用。 |
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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.（以下简称“公司”）收到了纳斯达克发出的缺陷通知，指出公司的普通股在连续三十个交易日内交易价格低于1.00美元的最低买盘价，这是根据纳斯达克上市规则5550(a)(2)的要求。 公司最初被给予直到2024年11月5日的时间以恢复合规；然而，由于公司未能达到合规且其股东权益未达到额外延长期所需的500万美元最低要求，故公司无资格获得第二个180天的合规期。
另外， 在2024年8月21日，公司收到了纳斯达克关于无法满足250万美元最低股东权益要求的通知， 该通知基于我们截至2024年6月30日的10-Q表格提交。公司在2024年10月25日向纳斯达克提交了更新的 合规计划，详细说明了恢复和维持合规所需的步骤。然而，纳斯达克已确定， 这一缺陷与买盘价格缺陷相结合，构成了额外的退市依据。
在2024年11月6日，纳斯达克发出了员工决定函，通知公司其证券将面临从纳斯达克资本市场退市的风险。公司于2024年11月12日正式请求召开听证会，以对此决定进行上诉，听证会由纳斯达克听证小组进行。公司正在等待听证会日期，预计将在请求后的30至45天内举行。公司对退市行动的上诉目前已暂停，等待小组的决定。
可转换债券 - 可转换债务
2024年10月22日，公司收到来自Peak One Opportunity Fund, LP的转股通知，按每股0.70美元的转换价格转换10万美元，获得142,857股普通股，减少债券的未偿还本金至100万美元。详见第5条 - 应付账款 - 可转换票据。
潜在私人发行
在十月份，公司收到了60万的投资 来自一位潜在投资者。公司与潜在投资者积极参与最终确定投资的完整条款， 目标是在2024年11月底之前达成额外投资并签署协议。
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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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