CARLSBAD, Calif., Aug. 14, 2025 (GLOBE NEWSWIRE) -- AppTech Payments Corp. (“AppTech” or the “Company”) (NASDAQ: APCX), a fintech company innovating payment solutions for businesses, today announced financial results for the second quarter ended June 30, 2025. For the three months ended June, the Company reported an operating loss of $1.9 million, or $0.06 per share, compared to an operating loss of $2.9 million, or $0.12 per share, for the same period in 2024. This year-over-year improvement reflects the C ...

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 June 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 its Cha ...

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]

Core Insights - AppTech Payments Corp. has launched its Lending Integrations and Processing Platform, anticipating significant growth as partners onboard their networks of portfolio companies [1] - The company aims to exceed 250,000 transactions per month, capitalizing on a marketplace with millions of monthly transactions [1] - CEO Thomas DeRosa expressed confidence in achieving cash break-even by the end of the year, highlighting strong operational momentum and growth trajectory [2] Company Overview - AppTech Payments Corp. provides digital financial services through a scalable cloud-based platform for financial institutions, corporations, SMEs, and consumers [3]

Part I [Business](index=5&type=section&id=Item%201.%20Business) AppTech provides digital payment and banking solutions through its FinZeo™ platform, targeting financial institutions, technology companies, and SMEs - AppTech's core offering is the FinZeo™ platform, which provides Payments-as-a-Service (PaaS) and Banking-as-a-Service (BaaS) through a modular, cloud-based architecture[21](index=21&type=chunk) - The company's growth strategy involves four key elements: (1) new product development, (2) market penetration, (3) market expansion, and (4) leveraging IP, strategic acquisitions, and partnerships[50](index=50&type=chunk) - The target market includes forward-thinking financial institutions, technology companies, and Small to Medium Enterprises (SMEs) that need to modernize their financial service offerings[43](index=43&type=chunk) - The company's historical business is merchant transaction services, supporting over 150 merchants by processing payments for credit/debit cards, ACH, and other programs[58](index=58&type=chunk) Fintech Industry Growth Projections | Metric | Value/Rate | Period | Source | | :--- | :--- | :--- | :--- | | ACH Payments (2022) | 30 billion payments, $76.7 trillion value | 2022 | Federal Reserve Payments Study | | Fintech Industry Growth | 16.5% CAGR | 2024-2032 | Statista | | Digital Banking (Neobanking) | Projected $2.6 trillion value | by 2027 | Statista | [Risk Factors](index=11&type=section&id=Item%201A.%20Risk%20Factors) As a smaller reporting company, AppTech is exempt from providing specific risk factor disclosures - The company is not required to provide risk factor disclosures as it qualifies as a smaller reporting company under Exchange Act Rule 12b-2[67](index=67&type=chunk) [Unresolved Staff Comments](index=11&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) This section is not applicable to the company - Not applicable[68](index=68&type=chunk) [Cybersecurity](index=11&type=section&id=Item%201C.%20Cybersecurity) AppTech manages cybersecurity risks through third-party experts, advanced technologies, and incident response plans, overseen by IT and Software Engineering directors, with no material impact to date - The company engages external cybersecurity consultants and auditors to evaluate and test its risk management systems, ensuring strategies align with best practices[70](index=70&type=chunk) - Primary responsibility for cybersecurity rests with the company's Director of Information Technology and Director of Software Engineering, who work with a third-party provider[76](index=76&type=chunk) - To date, cybersecurity risks have not materially affected the company, although it has experienced threats such as denial of service and phishing attacks[75](index=75&type=chunk) - The company maintains cyber insurance to mitigate the financial impact of potential cybersecurity incidents[79](index=79&type=chunk) [Properties](index=13&type=section&id=Item%202.%20Properties) AppTech leases its corporate headquarters in Carlsbad, California, and additional office space in Austin, Texas, owning no real property - The company's corporate headquarters is a leased office space of approximately **3,000 square feet** in Carlsbad, CA. It also leases office space in Austin, TX and does not own any real property[83](index=83&type=chunk) [Legal Proceedings](index=13&type=section&id=Item%203.%20Legal%20Proceedings) AppTech resolved three legal matters: NCR litigation dismissed, Infinios arbitration settled with liabilities extinguished, and a former employee lawsuit settled for **$172 thousand** - NCR Litigation: A lawsuit filed against NCR Payment Solutions was dismissed by both parties on March 11, 2024, with no impact on the company's financial statements[84](index=84&type=chunk) - Infinios Financial Services Litigation: An arbitration was settled, resulting in the extinguishment of an anti-dilution liability (**$72 thousand**) and a payable (**$249 thousand**) with no payments exchanged between the parties[86](index=86&type=chunk) - Litigation with Former Employees: A lawsuit with three former employees was settled in March 2025 for **$172 thousand**. This amount was accrued for at December 31, 2024[87](index=87&type=chunk) [Mine Safety Disclosures](index=13&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section is not applicable to the company - Not applicable[88](index=88&type=chunk) Part II [Market for Registrant's Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities](index=14&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Shareholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) AppTech's common stock and warrants trade on NASDAQ, with **33.3 million** shares outstanding as of March 31, 2025, and no cash dividends ever declared - The company's common stock and warrants are listed on the NASDAQ under the symbols "APCX" and "APCXW" respectively, following an uplisting on January 7, 2022[90](index=90&type=chunk) - The company has not declared or paid any cash dividends on its common stock since its inception[92](index=92&type=chunk) Stockholder Data as of March 31, 2025 | Security | Shares Outstanding | Number of Holders | | :--- | :--- | :--- | | Common Stock | 33,283,329 | 5,611 stockholders of record | | Preferred Stock | 14 | 11 shareholders | [Reserved](index=14&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved and contains no information - Item 6 is reserved[95](index=95&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=14&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) AppTech's 2024 revenue decreased by **45%** to **$276 thousand**, while net loss significantly narrowed to **$8.9 million** due to reduced operating expenses, though recurring losses raise going concern doubts [Results of Operations](index=16&type=section&id=Results%20of%20Operations) In 2024, revenue decreased **45%** to **$276 thousand**, gross profit fell **29%**, but total operating expenses halved, leading to a **50%** improvement in loss from operations and a **52%** reduction in net loss Consolidated Results of Operations (Years ended December 31) | ($ in thousands) | 2024 | 2023 | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | $276 | $504 | (45%) | | Gross profit | $224 | $317 | (29%) | | General and administrative | $7,794 | $9,873 | (21%) | | Research and development | $1,977 | $3,498 | (43%) | | Impairment of Intangible assets | $– | $6,131 | (100%) | | Loss from operations | ($9,547) | ($19,185) | (50%) | | Net loss | ($8,933) | ($18,512) | (52%) | - The **45%** decrease in revenue was principally driven by the cancellation of a licensing arrangement and a reduction in legacy processing revenue[112](index=112&type=chunk) - General and administrative expenses decreased by **21%** due to lower salaries from a restructuring plan and a **$1.24 million** decrease in stock-based compensation[115](index=115&type=chunk) - Other income increased by **81%** to **$1.26 million**, primarily driven by a **$1.245 million** gain from the extinguishment of debt in 2024[119](index=119&type=chunk) [Liquidity and Capital Resources](index=18&type=section&id=Liquidity%20and%20Capital%20Resources) AppTech's cash decreased to **$868 thousand** in 2024, despite improved operating cash flow and **$8.2 million** raised from financing, with recurring losses raising substantial doubt about its going concern ability - The company has experienced recurring operating losses and its current financial condition raises substantial doubt about its ability to continue as a going concern[123](index=123&type=chunk) - Management is actively pursuing additional funding and implementing comprehensive expense reduction strategies to enhance financial stability[123](index=123&type=chunk)[124](index=124&type=chunk) Cash and Cash Equivalents | ($ in thousands) | Dec 31, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $868 | $1,281 | Summary of Cash Flows (Years ended December 31) | ($ in thousands) | 2024 | 2023 | | :--- | :--- | :--- | | Net cash used in operating activities | ($7,457) | ($8,859) | | Net cash used in investing activities | ($1,159) | ($500) | | Net cash provided by financing activities | $8,203 | $7,178 | [Critical Accounting Policies and Estimates](index=20&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) AppTech's critical accounting policies involve significant estimates for goodwill and intangible asset valuation and impairment testing, with management concluding no significant goodwill impairment risk - Significant estimates are related to the valuation of goodwill and identifiable intangible assets from business combinations[131](index=131&type=chunk) - Goodwill is tested for impairment annually, or more frequently if indicators suggest impairment. The test compares the carrying amount of a reporting unit to its fair value, which is estimated using methods like Discounted Cash Flow (DCF)[138](index=138&type=chunk) - Management concluded that the fair value of the goodwill from the FinZeo acquisition significantly exceeds its carrying amount, and there is no significant risk of impairment[140](index=140&type=chunk) - Long-lived assets, such as capitalized software, are reviewed for impairment when events indicate the carrying amount may not be recoverable[141](index=141&type=chunk) [Qualitative and Quantitative Disclosures About Market Risk](index=22&type=section&id=Item%207A.%20Qualitative%20and%20Quantitative%20Disclosures%20about%20Market%20Risk) As a smaller reporting company, AppTech is exempt from providing market risk disclosures - The company is not required to provide this information because it qualifies as a "smaller reporting company"[151](index=151&type=chunk) [Financial Statements and Supplementary Data](index=22&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) The company's consolidated financial statements and related schedules are indexed on page 24 of the report - The consolidated financial statements and related schedules are indexed on page 24 and are incorporated by reference[152](index=152&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=22&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants regarding accounting and financial disclosure - None[153](index=153&type=chunk) [Controls and Procedures](index=22&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls were ineffective as of December 31, 2024, due to a material weakness in financial reporting policies leading to post-close adjustments - Management concluded that disclosure controls and procedures were not effective as of December 31, 2024[154](index=154&type=chunk) - A material weakness was identified in internal control over financial reporting, attributed to "insufficient formal financial reporting policies and procedures resulting in material post-close adjustments"[157](index=157&type=chunk) - There were no material changes in internal controls over financial reporting during the fourth quarter of 2024[158](index=158&type=chunk) [Other Information](index=23&type=section&id=Item%209B.%20Other%20Information) No undisclosed Form 8-K information or Rule 10b5-1 trading arrangement changes occurred during the quarter ended December 31, 2024 - No information was required to be disclosed on Form 8-K that was not already reported for the quarter ended December 31, 2024[160](index=160&type=chunk) [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=23&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This section is not applicable to the company - Not applicable[161](index=161&type=chunk) Part III This part incorporates information by reference from the company's 2025 Proxy Statement, covering directors, executive officers, corporate governance, executive compensation, and security ownership [Directors, Executive Officers and Corporate Governance](index=24&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, executive officers, and corporate governance is incorporated by reference from the company's 2025 Proxy Statement - All information required by this item is incorporated by reference from the registrant's 2025 Proxy Statement[163](index=163&type=chunk)[164](index=164&type=chunk)[165](index=165&type=chunk) [Executive Compensation](index=24&type=section&id=Item%2011.%20Executive%20Compensation) Information on executive and director compensation is incorporated by reference from the company's 2025 Proxy Statement - All information required by this item is incorporated by reference from the registrant's 2025 Proxy Statement[167](index=167&type=chunk)[168](index=168&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=24&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Security ownership information is incorporated from the 2025 Proxy Statement, with a table detailing equity compensation plans showing **1.84 million** securities to be issued and **508 thousand** available - Information on security ownership of certain beneficial owners and management is incorporated by reference from the 2025 Proxy Statement[169](index=169&type=chunk) Equity Compensation Plan Information as of December 31, 2024 | Plan Category | Number of Securities to be Issued Upon Exercise | Weighted Average Exercise Price | Number of Securities Remaining Available for Future Issuance | | :--- | :--- | :--- | :--- | | Equity compensation plans approved by security holders | 1,841,157 | $1.13 | 508,167 | | Total | 1,841,157 | $1.13 | 508,167 | [Certain Relationships and Related Transactions, and Director Independence](index=25&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information on related party transactions and director independence is incorporated by reference from the company's 2025 Proxy Statement - All information required by this item is incorporated by reference from the registrant's 2025 Proxy Statement[172](index=172&type=chunk)[173](index=173&type=chunk) [Principal Accountant Fees and Services](index=25&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information on principal accountant fees and services is incorporated by reference from the company's 2025 Proxy Statement - All information required by this item is incorporated by reference from the registrant's 2025 Proxy Statement[174](index=174&type=chunk) Part IV [Exhibits and Financial Statements Schedules](index=26&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statements%20Schedules) This section lists documents filed with the Form 10-K, including financial statements and exhibits, noting the omission of inapplicable financial statement schedules - This item lists the financial statements, financial statement schedules (omitted as not applicable), and exhibits filed with the report[177](index=177&type=chunk)[179](index=179&type=chunk) [Form 10-K Summary](index=26&type=section&id=Item%2016.%20Form%2010-K%20Summary) This section is not applicable to the company - Not applicable[178](index=178&type=chunk) [Financial Statements](index=27&type=section&id=Financial%20Statements) The consolidated financial statements present AppTech's financial position, operations, and cash flows, with the auditor's report highlighting recurring losses and going concern doubts [Report of Independent Registered Public Accounting Firm](index=28&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) The auditor issued an unqualified opinion on the financial statements but included a "Going Concern" paragraph due to AppTech's limited revenues and recurring losses - The auditor issued an opinion that the consolidated financial statements are presented fairly in conformity with U.S. GAAP[182](index=182&type=chunk) - The audit report contains a "Going Concern" paragraph, noting that the company's limited revenues and recurring operating losses raise substantial doubt about its ability to continue as a going concern[183](index=183&type=chunk) - The auditor determined there were no critical audit matters arising from the current period audit[187](index=187&type=chunk) [Consolidated Balance Sheets](index=29&type=section&id=Consolidated%20Balance%20Sheets) As of December 31, 2024, total assets increased to **$9.0 million**, total liabilities decreased to **$3.5 million**, and total stockholders' equity rose to **$5.5 million** Consolidated Balance Sheet Highlights (as of December 31) | ($ in thousands) | 2024 | 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $868 | $1,281 | | Total current assets | $2,420 | $1,516 | | Total Assets | $8,986 | $8,353 | | Total current liabilities | $3,440 | $4,080 | | Total Liabilities | $3,519 | $4,159 | | Total stockholders' equity | $5,467 | $4,194 | [Consolidated Statements of Operations](index=30&type=section&id=Consolidated%20Statements%20of%20Operations) In 2024, revenues decreased to **$276 thousand**, but a significant reduction in operating expenses led to a net loss of **$8.9 million**, a substantial improvement from the prior year Consolidated Statement of Operations Highlights (Years ended December 31) | ($ in thousands, except per share data) | 2024 | 2023 | | :--- | :--- | :--- | | Revenues | $276 | $504 | | Gross profit | $224 | $317 | | Total operating expenses | $9,771 | $19,502 | | Loss from operations | ($9,547) | ($19,185) | | Net loss | ($8,933) | ($18,512) | | Basic and diluted net loss per common share | ($0.35) | ($1.01) | [Notes to the Consolidated Financial Statements](index=34&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) The notes detail AppTech's business, going concern issues, accounting policies for revenue, business combinations, intangible assets, goodwill, debt instruments, and stockholders' equity activity - The company acquired Alliance Partners, LLC ("FinZeo") on October 13, 2023, to acquire its intellectual property, personnel, and software platform[206](index=206&type=chunk) - The financial statements were prepared on a going concern basis, but recurring losses and limited revenues raise substantial doubt about the company's ability to continue[209](index=209&type=chunk) - In 2024, the company issued a **$1.1 million** convertible debenture and warrants, which were subsequently converted into common stock and exercised, leaving no further obligations to the purchaser[258](index=258&type=chunk)[262](index=262&type=chunk) - As of December 31, 2024, the company had **15,906,627** warrants and **5,446,785** stock options outstanding[293](index=293&type=chunk)[300](index=300&type=chunk) - The company has a net deferred tax asset of **$8.6 million** as of Dec 31, 2024, which is fully offset by a **100%** valuation allowance[304](index=304&type=chunk)

Financial Performance - AppTech Payments Corp. reported an operating loss of $2.1 million ($0.08 per share) in Q4 2024, an improvement from a $3.4 million loss in Q4 2023 ($0.18 per share) [1] - The total operating loss for the full year 2024 was $8.8 million ($0.35 per share), compared to $18.5 million ($1.01 per share) in 2023, indicating a significant reduction in losses [1] Organizational Changes - A new investor group committed $5 million to AppTech, leading to significant organizational changes, including the establishment of voting control of the Board of Directors and the replacement of key executives, including the CEO and CFO [2] - The new CFO, Felipe Corrado, expressed optimism about the organizational and operational improvements made in Q4, highlighting a bolstered capital position, reduced expenses, and a narrowed focus on potentially profitable customers [2] Company Overview - AppTech Payments Corp. provides digital financial services for financial institutions, corporations, small and midsized enterprises (SMEs), and consumers through a scalable cloud-based platform [3]