AppTech Payments (APCX) - 2025 Q2 - Quarterly Report

PART I – FINANCIAL INFORMATION Special Note Regarding Forward-Looking Statements and Projections 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][13][16] - The company explicitly states it undertakes no obligation to update or revise any forward-looking statements[13] Item 1. Financial Statements (Unaudited) This section presents the unaudited condensed consolidated financial statements, including Balance Sheets, Statements of Operations, Stockholders' Equity, and Cash Flows Consolidated Balance Sheets 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 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] - Net loss decreased for both the three-month and six-month periods ended June 30, 2025, indicating improved operational efficiency or reduced expenses[23] Consolidated Statements of Stockholders' Equity 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] - 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] Consolidated Statements of Cash Flows 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] - 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] Notes to the Consolidated Financial Statements This section provides detailed explanations and additional information supporting the consolidated financial statements NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS 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] - The company acquired Alliance Partners, LLC on October 13, 2023, to obtain its intellectual property, personnel, and software platform, now known as FinZeo[32] - 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][34][35] NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 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] - 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] - Research and development costs, totaling $1,690 thousand for the six months ended June 30, 2025, are expensed as incurred[49] 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