Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2025 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______________ to _______________ Commission file number: 001-39158 AppTech Payments Corp. (Exact Name of Registrant as Specified in it ...

Financial Performance - AppTech Payments Corp. reported an operating loss of $1.7 million, or $0.05 per share, for Q3 2025, an improvement from an operating loss of $2.0 million, or $0.08 per share, in Q3 2024 [1] - The company is focused on optimizing its cost structure and positioning itself for sustainable profitability, as stated by the Chief Financial Officer [1] Strategic Acquisition - Following the close of the quarter, AppTech completed the acquisition of InfinitusPay, which enhances its Banking-as-a-Service (BaaS) platform and supports recurring revenue growth [2] - The acquisition is expected to be accretive to revenue and contribute to operational efficiencies through the integration of technology, customers, and talent [2] Company Overview - AppTech Payments Corp. provides digital financial services for financial institutions, corporations, small and midsized enterprises (SMEs), and consumers via a scalable cloud-based platform [3]

Core Insights - AppTech Payments Corp. has announced the acquisition of InfinitusPay, enhancing its Banking-as-a-Service (BaaS) platform and focusing on scalable revenue growth [1][2] - The acquisition is seen as a pivotal step in advancing AppTech's capabilities in delivering embedded financial solutions and expanding its digital commerce reach [2] - InfinitusPay brings technological and sales talent, a growing customer portfolio, and profitable operations to AppTech [2] Company Overview - AppTech Payments Corp. provides digital financial services through a scalable cloud-based platform for financial institutions, corporations, small and midsized enterprises, and consumers [3] - The company's patented technology and strategic partnerships facilitate frictionless commerce across various verticals [3]

Financial Performance - For Q2 2025, the company reported an operating loss of $1.9 million, or $0.06 per share, an improvement from an operating loss of $2.9 million, or $0.12 per share, in Q2 2024, indicating progress in revenue expansion and operational efficiency [2] - The company continues to focus on scaling revenues and streamlining costs, aiming for breakeven and profitability in the future [3] Strategic Focus - The company is investing in its core platform and diversifying product offerings to meet the evolving needs of merchants and partners [3] - The ongoing efforts to manage expenses while growing revenues demonstrate the company's commitment to delivering long-term shareholder value [3] Company Overview - AppTech Payments Corp. provides digital financial services through a scalable cloud-based platform for financial institutions, corporations, SMEs, and consumers [4]

[PART I – FINANCIAL INFORMATION](index=5&type=section&id=Part%20I) [Special Note Regarding Forward-Looking Statements and Projections](index=4&type=section&id=Special%20Note%20Regarding%20Forward-Looking%20Statements%20and%20Projections) This section cautions against undue reliance on forward-looking statements, highlighting inherent risks and uncertainties - The report contains 'forward-looking statements' subject to substantial risks and uncertainties, including delays in client boarding, investment costs for new revenue streams, sales slowdowns, macroeconomic conditions, dependence on third parties, and regulatory issues[12](index=12&type=chunk)[13](index=13&type=chunk)[16](index=16&type=chunk) - The company explicitly states it undertakes no obligation to update or revise any forward-looking statements[13](index=13&type=chunk) [Item 1. Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Consolidated%20Financial%20Statements%20(unaudited)) This section presents the unaudited condensed consolidated financial statements, including Balance Sheets, Statements of Operations, Stockholders' Equity, and Cash Flows [Consolidated Balance Sheets](index=6&type=section&id=Consolidated%20Balance%20Sheets) This section presents the company's financial position at specific dates, detailing assets, liabilities, and stockholders' equity | Metric (in thousands) | June 30, 2025 | December 31, 2024 | Change | % Change | | :-------------------- | :------------ | :---------------- | :----- | :------- | | Cash and cash equivalents | $138 | $868 | $(730) | -84.1% | | Accounts receivable | $86 | $43 | $43 | 100.0% | | Equity receivable | $0 | $1,350 | $(1,350)| -100.0% | | Total current assets | $397 | $2,420 | $(2,023)| -83.6% | | Total Assets | $6,486 | $8,986 | $(2,500)| -27.8% | | Total current liabilities | $3,891 | $3,440 | $451 | 13.1% | | Total Liabilities | $3,951 | $3,519 | $432 | 12.3% | | Total Stockholders' Equity | $2,535 | $5,467 | $(2,932)| -53.6% | [Consolidated Statements of Operations](index=7&type=section&id=Consolidated%20Statements%20of%20Operations) This section outlines the company's financial performance over specific periods, detailing revenues, expenses, and net loss | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenues | $291 | $76 | $508 | $181 | | Cost of revenues | $107 | $14 | $235 | $25 | | Gross profit | $184 | $62 | $273 | $156 | | Total operating expenses | $2,065 | $2,953 | $4,810 | $6,079 | | Loss from operations | $(1,881) | $(2,891) | $(4,537) | $(5,923) | | Net loss | $(1,860) | $(2,922) | $(4,501) | $(5,959) | | Basic and diluted net loss per common share | $(0.06) | $(0.12) | $(0.13) | $(0.25) | - Revenues increased significantly by **283%** for the three months ended June 30, 2025, and by **181%** for the six months ended June 30, 2025, compared to the same periods in 2024[23](index=23&type=chunk) - Net loss decreased for both the three-month and six-month periods ended June 30, 2025, indicating improved operational efficiency or reduced expenses[23](index=23&type=chunk) [Consolidated Statements of Stockholders' Equity](index=8&type=section&id=Consolidated%20Statements%20of%20Stockholders'%20Equity) This section details changes in the company's equity accounts, including common stock, additional paid-in capital, and accumulated deficit | Metric (in thousands) | December 31, 2024 | June 30, 2025 | | :-------------------- | :---------------- | :------------ | | Common Stock Shares | 33,278,934 | 33,988,934 | | Common Stock Amount | $33 | $34 | | Additional Paid-in Capital | $174,131 | $175,699 | | Accumulated Deficit | $(168,697) | $(173,198) | | Total Stockholders' Equity | $5,467 | $2,535 | - Total stockholders' equity decreased from **$5,467 thousand** at December 31, 2024, to **$2,535 thousand** at June 30, 2025, primarily due to net losses[25](index=25&type=chunk) - The company issued **700,000 common shares**, generating **$700 thousand** in net proceeds from the sale of common shares during the six months ended June 30, 2025[25](index=25&type=chunk) [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This section summarizes the cash inflows and outflows from operating, investing, and financing activities over specific periods | Cash Flow Activity (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(3,080) | $(3,901) | | Net cash provided by financing activities | $2,350 | $2,636 | | Changes in cash and cash equivalents | $(730) | $(1,265) | | Cash and cash equivalents, end of period | $138 | $16 | - Net cash used in operating activities decreased from **$(3,901) thousand** in 2024 to **$(3,080) thousand** in 2025, indicating a reduction in cash outflow from core operations[27](index=27&type=chunk) - Cash and cash equivalents at the end of the period increased significantly from **$16 thousand** in 2024 to **$138 thousand** in 2025, despite a decrease in net cash provided by financing activities[27](index=27&type=chunk) [Notes to the Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) This section provides detailed explanations and additional information supporting the consolidated financial statements [NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS](index=10&type=section&id=NOTE%201%20-%20ORGANIZATION%20AND%20DESCRIPTION%20OF%20BUSINESS) This note describes AppTech Payments Corp. as a Fintech company, detailing its FinZeo platform, the Alliance Partners acquisition, delisting, and going concern considerations - AppTech Payments Corp. is a Fintech Company headquartered in Carlsbad, California, utilizing innovative payment processing and digital banking technologies[28](index=28&type=chunk) - The company acquired Alliance Partners, LLC on October 13, 2023, to obtain its intellectual property, personnel, and software platform, now known as FinZeo[32](index=32&type=chunk) - The company was delisted to the OTCQB market on May 20, 2025, and management is actively pursuing additional funding options and expects revenue streams to generate cash to address going concern issues[30](index=30&type=chunk)[34](index=34&type=chunk)[35](index=35&type=chunk) [NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=11&type=section&id=NOTE%202%20-%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note outlines the significant accounting policies used in preparing the financial statements, covering revenue recognition, intangible assets, and stock-based compensation - The company recognizes revenue from merchant processing services (credit card and ACH transactions) by collecting a flat fee, a per-transaction fee, or a percentage of the transaction value[44](index=44&type=chunk) - For the six months ended June 30, 2025, **66%** of the Company's revenue was generated from two customers, indicating a significant concentration of credit risk[42](index=42&type=chunk) - Research and development costs, totaling **$1,690 thousand** for the six months ended June 30, 2025, are expensed as incurred[49](index=49&type=chunk) Common Stock Equivalents Not Included in Diluted EPS (in thousands) | Item | June 30, 2025 | June 30, 2024 | | :-------------------- | :------------ | :------------ | | Series A preferred stock | 1,148 | 1,148 | | Warrants | 21,031,627 | 7,489,960 | | Options | 5,527,617 | 3,211,838 | | Total | 26,560,3

Core Insights - AppTech Payments Corp. announced that board member Albert L. Lord intends to purchase up to one million shares of the company's common stock in the open market, expressing disappointment in the current share price performance despite efforts to meet NASDAQ listing requirements [1] - Lord emphasized that the delisting does not affect the company's growth potential or the confidence in the original investment thesis, asserting that the current share price significantly undervalues the company [1] Company Overview - AppTech Payments Corp. provides digital financial services through a scalable cloud-based platform for financial institutions, corporations, small and midsized enterprises (SMEs), and consumers [2]

Core Points - AppTech Payments Corp. has been notified by Nasdaq of its delisting due to noncompliance with Nasdaq Listing Rule 5550(a)(2), leading to the suspension of trading of its common stock and warrants effective May 20, 2025 [1] - Following the delisting, the company's common stock and warrants will now trade on the OTC Markets' OTCQB market tier under the symbols APCX and APCXW, with no impact on the company's operations [2] - The CEO of AppTech Payments Corp. expressed disappointment over the delisting but remains confident in the company's growth strategy and revenue outlook [3] - Two key executives, Luke D'Angelo and Virgilio Llapitan, resigned from their positions on May 19, 2025, without any disagreements related to the company's operations [3][4] - AppTech Payments Corp. provides digital financial services through a scalable cloud-based platform for various clients, including financial institutions and SMEs [5]

Core Insights - AppTech Payments Corp. reported a first quarter 2025 operating loss of $2.6 million, an improvement from a $3.0 million loss in the same quarter of 2024 [1] - The cash basis loss for the first quarter of 2025 was $1.8 million, compared to $2.2 million in 2024, indicating a reduction in losses [1] Financial Performance - The company aims to enhance operating efficiency and has introduced new revenue sources to achieve breakeven and eventually profitable results [2] - CFO Felipe Corrado stated that the steps taken to improve the financial position are beginning to yield tangible results, with a focus on revenue expansion and cost efficiency [2] Company Overview - AppTech Payments Corp. provides digital financial services through a scalable cloud-based platform for financial institutions, corporations, SMEs, and consumers [2]

Part I [Consolidated Financial Statements (unaudited)](index=5&type=section&id=Item%201.%20Consolidated%20Financial%20Statements%20(unaudited)) AppTech Payments Corp. reported increased Q1 2025 revenues but a net loss, with declining assets and recurring losses raising going concern doubts [Consolidated Balance Sheets](index=6&type=section&id=Consolidated%20Balance%20Sheets) As of March 31, 2025, the company's total assets were $6.91 million, a decrease from $8.99 million at December 31, 2024, driven by a drop in cash and the collection of an equity receivable, while total liabilities and stockholders' equity also decreased Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $417 | $868 | | Total current assets | $739 | $2,420 | | Total Assets | $6,911 | $8,986 | | **Liabilities & Equity** | | | | Total current liabilities | $3,188 | $3,440 | | Total Liabilities | $3,249 | $3,519 | | Total stockholders' equity | $3,662 | $5,467 | [Consolidated Statements of Operations](index=7&type=section&id=Consolidated%20Statements%20of%20Operations) For the three months ended March 31, 2025, revenues increased by 107% to $217 thousand, resulting in a net loss of $2.64 million, an improvement from the $3.04 million net loss in Q1 2024, primarily due to reduced operating expenses Statement of Operations Summary (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenues | $217 | $105 | | Gross profit | $89 | $94 | | Total operating expenses | $2,745 | $3,125 | | Loss from operations | ($2,656) | ($3,031) | | Net loss | ($2,641) | ($3,037) | | Basic and diluted net loss per common share | ($0.08) | ($0.13) | - Stock-based compensation included in selling, general and administrative expenses increased to **$836 thousand** in Q1 2025 from **$447 thousand** in Q1 2024[23](index=23&type=chunk) [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the first three months of 2025, net cash used in operating activities was $1.80 million, an improvement from the prior year, with $1.35 million received from financing activities, resulting in a net decrease in cash of $451 thousand and an ending cash balance of $417 thousand Cash Flow Summary (in thousands) | Cash Flow Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | ($1,801) | ($2,164) | | Net cash used in investing activities | $0 | $0 | | Net cash provided by financing activities | $1,350 | $2,436 | | **Changes in cash and cash equivalents** | **($451)** | **$272** | | **Cash and cash equivalents, end of period** | **$417** | **$1,553** | [Notes to the Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) The notes detail the company's Fintech business, accounting policies, and significant events, including the FinZeo platform, a going concern warning due to recurring losses, significant customer concentration risk, ongoing legal proceedings, and a potential Nasdaq delisting - The company is a Fintech firm utilizing payment processing and digital banking technologies, with its proprietary software platform named FinZeo[31](index=31&type=chunk)[32](index=32&type=chunk) - Recurring operating losses and current financial conditions raise substantial doubt about the Company's ability to continue as a going concern; management has initiated actions to reduce debt and is pursuing additional funding[37](index=37&type=chunk)[38](index=38&type=chunk) - For Q1 2025, **74%** of revenue was generated from two customers, and as of March 31, 2025, **81%** of accounts receivable was from two customers, indicating significant concentration risk[44](index=44&type=chunk)[45](index=45&type=chunk) - Subsequent to the quarter end, the company anticipates being delisted from Nasdaq and transitioning to the OTCQB market due to failure to meet the minimum bid price requirement[85](index=85&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=18&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's FinZeo™ Fintech platform, reporting Q1 2025 revenue growth of 107% driven by ISO and lending activities, alongside decreased general and administrative expenses but increased R&D, while liquidity remains a major concern due to recurring losses, prompting operational restructuring and a search for new funding [Business Overview](index=18&type=section&id=Business%20Overview) The company operates in the financial technology sector with its FinZeo™ platform, a modular cloud-based architecture providing Payments-as-a-Service (PaaS) for digital payment acceptance and Banking-as-a-Service (BaaS) for financial institutions, designed for white-label integration by ISOs and ISVs - AppTech's core offering is the FinZeo™ platform, an all-in-one Fintech solution providing Payments-as-a-Service (PaaS) and Banking-as-a-Service (BaaS)[92](index=92&type=chunk) - PaaS solutions include ACH, credit/debit card processing, eCheck, and text-to-pay, delivered via integrated solutions or APIs[93](index=93&type=chunk) - BaaS offerings feature an automated underwriting portal to expedite business onboarding for financial institutions, ISOs, and ISVs[94](index=94&type=chunk)[95](index=95&type=chunk) [Results of Operations](index=19&type=section&id=Results%20of%20Operations) Comparing Q1 2025 to Q1 2024, revenue increased 107% to $217 thousand, primarily from ISO and lending activities, while cost of revenue rose significantly due to revenue sharing, general and administrative expenses fell by $516 thousand, and research and development expenses increased by $136 thousand for platform enhancements Comparison of Operations for the Three Months Ended March 31 (in thousands) | Item | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Revenue | $217 | $105 | +107% | | Cost of Revenue | $128 | $11 | +$117 | | General and Administrative | $1,965 | $2,481 | -$516 | | Research and Development | $780 | $644 | +$136 | [Liquidity and Capital Resources](index=20&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity is strained, with cash and cash equivalents decreasing to $417 thousand at March 31, 2025, and recurring operating losses raising substantial doubt about its ability to continue as a going concern, prompting management to restructure operations, reduce headcount, and actively pursue additional funding - Cash and cash equivalents stood at **$417 thousand** as of March 31, 2025, down from **$868 thousand** at December 31, 2024[112](index=112&type=chunk) - The company has experienced recurring operating losses, raising substantial doubt about its ability to continue as a going concern[113](index=113&type=chunk) - Management's plan to address the going concern issue includes operational restructuring, headcount reduction, and pursuing additional funding[114](index=114&type=chunk) Cash Flow Summary (in thousands) | | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(1,801) | $(2,164) | | Net cash provided by financing activities | $1,350 | $2,436 | [Critical Accounting Policies and Estimates](index=21&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) The company identifies equity-based compensation and goodwill impairment as critical accounting policies requiring significant estimates and judgments, with fair value of stock options estimated using the Black-Scholes model and goodwill tested annually for impairment based on future cash flows and discount rates, concluding no impairment as of the reporting date - Equity-Based Compensation: Fair value of stock options is estimated using the Black-Scholes model, which requires subjective assumptions for inputs like expected volatility and term[124](index=124&type=chunk) - Goodwill Impairment: Goodwill is tested for impairment annually by comparing the carrying amount to fair value, which is determined using estimates of future cash flows, discount rates, and long-term growth rates[125](index=125&type=chunk) - Management concluded that the fair value of goodwill from the FinZeo acquisition significantly exceeds its carrying amount, and there is no significant risk of impairment[127](index=127&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=22&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, AppTech is not required to provide the information for this item - The company is a "smaller reporting company" and is not required to provide quantitative and qualitative disclosures about market risk[132](index=132&type=chunk) [Controls and Procedures](index=22&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of March 31, 2025, with no material changes to internal control over financial reporting during the quarter, while acknowledging the inherent limitations of any control system - Based on an evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of March 31, 2025[133](index=133&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, internal controls[134](index=134&type=chunk) Part II [Legal Proceedings](index=24&type=section&id=Item%201.%20Legal%20Proceedings) The company was involved in litigation with three former employees regarding severance payments, which was settled in March 2025 for $172 thousand, with payments made in March and May 2025 - In March 2025, the Company settled a lawsuit with three former employees over severance payments for a total of **$172 thousand**[137](index=137&type=chunk) [Risk Factors](index=24&type=section&id=Item%201A.%20Risk%20Factors) As a smaller reporting company, AppTech is not required to provide the information for this item - As a smaller reporting company, the company is not required to provide risk factor disclosures in its Form 10-Q[138](index=138&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=24&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This item is not applicable for the reporting period - Not applicable[139](index=139&type=chunk) [Other Information](index=24&type=section&id=Item%205.%20Other%20Information) During the quarter ended March 31, 2025, no director or officer of the company adopted or terminated any Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement - No director or officer adopted or terminated any Rule 10b5-1 trading arrangement during the quarter[141](index=141&type=chunk) [Exhibits](index=25&type=section&id=Item%206.%20Exhibits) The report includes certifications from the Chief Executive Officer and Chief Financial Officer under Sections 302 and 906 of the Sarbanes-Oxley Act of 2002, as well as Inline XBRL documents - Exhibits filed with the report include CEO and CFO certifications pursuant to the Sarbanes-Oxley Act and Inline XBRL data files[143](index=143&type=chunk)

Core Insights - AppTech Payments Corp. has launched its CoreBanking solution integrated with the FINZEO Platform, marking its entry into digital banking and retail financial services [1][2] - The CoreBanking solution aims to enhance operational efficiency for banks, allowing them to enter new markets and eliminate outdated technologies [2][4] - AppTech anticipates significant revenue growth, projecting $40,000 in revenue in its first week and monthly revenue exceeding $500,000 by the end of 2025 [4] Product Features - CoreBanking offers a range of services including Digital Onboarding, FedWire, FedACH, Compliance, Virtual Bank Accounts, Risk Management, Ledger, FedNow, and Physical and Virtual Cards [2][4] - The integration with the FINZEO platform allows banks to leverage AppTech's existing client base for transaction fees and deposits, facilitating faster realization of benefits [3][4] Growth Strategy - AppTech's management team has been restructured, and technology has been upgraded to drive revenue growth through the last three quarters of 2025 [4] - The company is focused on expanding its client base, particularly in community banking, and plans to roll out additional partnerships and product launches in April [4]