Form 10-Q - Quarterly report [Sections 13 or 15(d)]

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024

o	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 Charter)

Delaware

7389

65-0847995

(State or other jurisdiction of

incorporation or organization)

(Primary Standard Industrial

Classification Code Number)

(I.R.S. Employer

Identification No.)

5876 Owens Avenue

Suite 100

Carlsbad, California 92008

(760) 707-5959

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.001 par value per share	APCX	Nasdaq Capital Market
Warrants, each whole warrant exercisable for one share of common stock at an exercise price of $4.15	APCXW	Nasdaq Capital Market

Securities registered pursuant to Section 12(g) of the Act:

None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	o	Accelerated filer	o

Non-accelerated filer	x	Smaller reporting company	x

		Emerging growth company	o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No x

As of November 14, 2024, the registrant had 27,646,185 shares of common stock issued and outstanding.

AppTech Payments Corp.

Form 10-Q

Table of Contents

		Page
	Part I

	Special Note Regarding Forward-Looking Statements and Projections	3

Item 1.	Consolidated Financial Statements (unaudited)	4

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	34

Item 4.	Controls and Procedures	34

	Part II

Item 1.	Legal Proceedings	35

Item 1A.	Risk Factors	36

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	36

Item 3.	Defaults Upon Senior Securities	36

Item 4.	Mine Safety Disclosures	36

Item 5.	Other Information	36

Item 6.	Exhibits	37

	Signatures	40

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS AND PROJECTIONS

Various statements in this Quarterly on Form 10-Q of AppTech Payments Corp. (we, our, AppTech or the Company) are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve substantial risks and uncertainties. All statements, other than statements of historical facts, included in this report regarding our strategy, future operations, future financial position, future revenues, projected costs, prospects, plans and objectives of management are forward-looking statements. These statements are subject to risks and uncertainties and are based on information currently available to our management. Words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “contemplates,” “predict,” “project,” “target,” “likely,” “potential,” “continue,” “ongoing,” “will,” “would,” “should,” “could,” or the negative of these terms and similar expressions or words, identify forward-looking statements. The events and circumstances reflected in our forward-looking statements may not occur and actual results could differ materially from those projected in our forward-looking statements. Meaningful factors that could cause actual results to differ include:

	·	delays and uncertainty associated with the boarding of clients onto our platform;
	·	substantial investment and costs associated with new potential revenue streams and their corresponding contractual obligations;
	·	a slowdown or reduction in our sales due to a reduction in end user demand, unanticipated competition, regulatory issues, or other unexpected circumstances;
	·	uncertainty regarding adverse macroeconomic conditions, including inflation, a recession, changes to fiscal and monetary policy, tighter credit, higher interest rates, consumer confidence and spending, and high unemployment;
	·	dependence on third-parties needed to facilitate our automated clearing house ("ACH") and merchant service capabilities;
	·	delay in or failure to obtain regulatory approval for any future products in additional countries, and;
	·	current and future laws and regulations.

All written and oral forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. We caution investors not to rely too heavily on the forward-looking statements we make or that are made on our behalf. We undertake no obligation and specifically decline any obligation, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Please see, however, any further disclosures we make on related subjects in any annual, quarterly or current reports that we may file with the Securities and Exchange Commission (SEC).

We encourage you to read the discussion and analysis of our financial condition and our financial statements contained in this Quarterly Report on Form 10-Q. There can be no assurance that we will in fact achieve the actual results or developments we anticipate or, even if we do substantially realize them, that they will have the expected consequences to, or effects on, us. Therefore, we can give no assurances that we will achieve the outcomes stated in those forward-looking statements and estimates.

Unless the context otherwise requires, throughout this Quarterly Report on Form 10-Q, the words “AppTech” “we,” “us,” the “registrant” or the “Company” refer to AppTech Payments Corp.

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

APPTECH PAYMENTS CORP.

CONSOLIDATED FINANCIAL STATEMENTS

INDEX TO UNAUDITED FINANCIAL STATEMENTS

(The financial statements have been condensed for presentation purposes)

	Pages

Consolidated Balance Sheets as of September 30, 2024 and December 31, 2023	5

Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2024 and 2023	6

Consolidated Statements of Stockholders’ Equity for the Three and Nine Months Ended September 30, 2024 and 2023	7

Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2024 and 2023	8

Notes to the Consolidated Financial Statements	9

APPTECH PAYMENTS CORP.

CONSOLIDATED BALANCE SHEETS

AS OF SEPTEMBER 30, 2024 AND DECEMBER 31, 2023

(UNAUDITED)

(in thousands, except shares and per share data)


	September 30, 2024			December 31, 2023
ASSETS
Current assets
Cash and cash equivalents	$	104		$	1,281
Accounts receivable		12			30
Prepaid expenses		196			205
Total current assets		312			1,516
Note receivable		–			26
Right of use asset		29			66
Security deposit		19			9
Intangible assets, net of accumulated amortization		3,664			4,428
Goodwill		1,161			1,161
Capitalized software development, net of accumulated amortization		1,429			1,147
TOTAL ASSETS	$	6,614		$	8,353
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	2,484		$	1,680
Accounts payable - related party		102			119
Accrued liabilities		1,691			1,958
Convertible note payable and accrued interest, net of discount of $428 and $0, respectively		687			–
Notes payable		1			1
Deferred revenue		150			244
Right of use liability		38			78
Total current liabilities		5,153			4,080
Long-term liabilities
Right of use liability, net of current portion		–			14
Notes payable, net of current portion		62			65
Total long-term liabilities		62			79
TOTAL LIABILITIES		5,215			4,159
Commitments and contingencies (Note 7)					–
Stockholders’ equity
Preferred stock: 100,000 shares authorized at September 30, 2024 and December 31, 2023, respectively; Series A preferred stock: $0.001 par value;14 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively.		–			–
Common stock, $0.001 par value; 105,263,158 shares authorized; 27,478,328 and 22,251,742 issued and outstanding at September 30, 2024 and December 31, 2023, respectively		27			22
Additional paid-in capital		169,120			163,921
Accumulated deficit		(167,748	)		(159,749	)
Total stockholders’ equity		1,399			4,194
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	6,614		$	8,353

See accompanying notes to the consolidated financial statements.

APPTECH PAYMENTS CORP.

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024 and 2023

(UNAUDITED)

(in thousands, except shares and per share data)


	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2024			2023			2024			2023
Revenues	$	43		$	140		$	224		$	363
Cost of revenues		24			44			49			159
Gross profit		19			96			175			204

Operating expenses:
Selling, general and administrative, including stock based compensation of $306 and $958 for the three months ended September 30, 2024 and 2023, respectively, $1,214 and $2,002 for the nine months ended September 30, 2024 and 2023, respectively		1,867			2,227			6,669			7,114
Impairment of intangible assets		–			–			–			6,131
Research and development, including stock based compensation of $6 and $327 for the three months ended September 30, 2024 and 2023, respectively, $138 and $956 for the nine months ended September 30, 2024 and 2023, respectively		2			751			1,278			2,774
Total operating expenses		1,869			2,978			7,947			16,019

Loss from operations		(1,850	)		(2,882	)		(7,772	)		(15,815	)

Other income (expenses)
Interest expense		(18	)		(4	)		(53	)		(48	)
Change in fair value of derivative liability		–			–			–			27
Debt discount amortization		(151	)		–			(151	)		–
Other income (expenses)		(6	)		(5	)		(8	)		711
Total other expenses		(175	)		(9	)		(212	)		690

Loss before provision for income taxes		(2,025	)		(2,891	)		(7,984	)		(15,125	)
Provision for income taxes		–			–			–			–
Net loss	$	(2,025	)	$	(2,891	)	$	(7,984	)	$	(15,125	)
Deemed dividend related to warrant resets		(15	)		–			(15	)		(763	)
Net loss attributable to common stockholders	$	(2,040	)	$	(2,891	)		(7,999	)		(15,888	)

Basic and diluted net loss per common share	$	(0.08	)	$	(0.15	)	$	(0.33	)	$	(0.86	)
Weighted-average number of shares used basic and diluted per share amounts		25,892,683			18,801,754			24,405,150			18,402,919

See accompanying notes to the consolidated financial statements.

APPTECH PAYMENTS CORP.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024 and 2023

(UNAUDITED)

(in thousands, except shares and per share data)


	Series A Preferred			Common Stock				Additional Paid-		Accumulated			Stockholders’
	Shares		Amount	Shares		Amount		in Capital		Deficit			Equity
Balance December 31, 2022	14	$	–	16,697,280	$	17	$	147,881	$	(140,474	)	$	7,424
Net loss	–		–	–		–		–		(3,151	)		(3,151	)
Stock based compensation	–		–	178,750		–		1,094		–			1,094
Repricing of warrants	–		–	–		–		763		(763	)		–
Net proceeds from sale of offering shares	–		–	1,666,667		2		4,488		–			4,490
Balance March 31, 2023	14	$	–	18,542,697	$	19	$	154,226	$	(144,388	)	$	9,857
Net loss	–		–	–		–		–		(9,083	)		(9,083	)
Stock based compensation	–		–	38,750		–		813		–			813
Balance June 30, 2023	14	$	–	18,581,447	$	19	$	155,039	$	(153,471	)	$	1,587
Net loss	–		–	–		–		–		(2,891	)		(2,891	)
Stock based compensation	–		–	53,750		–		1,285		–			1,285
Issuance of stock for prepaid services	–		–	145,000		–		153		–			153
Option exercise	–		–	10,528		–		15		–			15
Net proceeds from ATM offering	–		–	229,283		–		667		–			667
Balance September 30, 2023	14	$	–	19,020,008	$	19	$	157,159	$	(156,362	)	$	816

	Series A Preferred			Common Stock				Additional Paid-			Accumulated			Stockholders’
	Shares		Amount	Shares		Amount		in Capital			Deficit			Equity

Balance December 31, 2023	14	$	–	22,251,742	$	22	$	163,921		$	(159,749	)	$	4,194
Net loss	–		–	–		–		–			(3,037	)		(3,037	)
Stock based compensation	–		–	55,000		1		486			–			487
Net proceeds from sale of common shares	–		–	2,423,180		2		2,436			–			2,438
Balance March 31, 2024	14	$	–	24,729,922	$	25	$	166,843		$	(162,786	)	$	4,082
Net loss	–		–	–		–		–			(2,922	)		(2,922	)
Stock based compensation	–		–	105,000		–		553			–			553
Shares issued with Note Payable	–		–	30,000		–		27			–			27
Balance June 30, 2024	14	$	–	24,864,922	$	25	$	167,423		$	(165,708	)	$	1,740
Net loss	–		–	–		–		–			(2,025	)		(2,025	)
Stock based compensation	–		–	325,000		–		312			–			312
Shares issued with convertible note payable	–		–	100,000		–		96			–			96
Offering costs	–		–	–		–		(68	)		–			(68	)
Warrants issued with convertible note payable	–		–	–		–		334			–			334
Warrant repricing	–		–	–		–		15			(15	)		–
Warrant exercise, net of offering costs	–		–	1,666,667		2		1,008			–			1,010
Warrant exercise - cashless	–		–	521,739		–		–			–			–
Balance September 30, 2024	14	$	–	27,478,328	$	27	$	169,120		$	(167,748	)	$	1,399

See accompanying notes to the consolidated financial statements.

APPTECH PAYMENTS CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024 and 2023

(UNAUDITED)

(In thousands, except shares and per share data)


	September 30, 2024			September 30, 2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(7,984	)	$	(15,125	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock based compensation		1,352			2,958
Cancellation of stock repurchase liabilities		–			(430	)
Write off of note receivable		25			–
Impairment of intangible assets		–			6,131
Gain on settlement of convertible note, warrants, and derivative liabilities		–			(250	)
Amortization of debt discount		151			4
Amortization of intangible assets and software		1,039			712
Change in fair value of derivative liabilities		–			(27	)
Changes in operating assets and liabilities:
Accounts receivable		18			(202	)
Prepaid expenses		10			614
Accounts payable		785			205
Accrued liabilities		(254	)		(1,685	)
Deferred revenue		(94	)		557
Right of use asset and liability, net		(16	)		(7	)
Net cash used in operating activities		(4,968	)		(6,545	)
CASH FLOWS FROM INVESTING ACTIVITIES
Capitalized software development		(557	)		(50	)
Other assets		(10	)		–
Net cash used in investing activities		(567	)		(50	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from note payable		200			–
Payments on loans payable - related parties		–			(88	)
Proceeds on convertible note payable		910			–
Proceeds from sale of common stock		2,438			5,157
Proceeds from exercise of warrants		1,010			–
Repayment of notes payable		(200	)		(1,021	)
Repayment of convertible notes payable		–			(679	)
Proceeds received from exercise of stock options		–			15
Net cash provided by financing activities		4,358			3,384
Changes in cash and cash equivalents		(1,177	)		(3,211	)
Cash and cash equivalents, beginning of period		1,281			3,462
Cash and cash equivalents, end of period	$	104		$	251
Supplemental disclosures of cash flow information:
Cash paid for interest	$	32		$	1,233
Cash paid for income taxes	$	–		$	–
NON-CASH INVESTING AND FINANCING ACTIVITIES
Issuance of stock for prepaid services	$	68		$	268
Common stock issued with note payable	$	27		$	–
Common stock issued with convertible note payable	$	96		$	–
Warrants issued with the convertible note payable	$	334		$	–
Cancellation of stock repurchase liabilities	$	–		$	430

See accompanying notes to the consolidated financial statements.

APPTECH PAYMENTS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except per share data)

NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS

AppTech Payments Corp. ("AppTech" or the "Company), a Delaware corporation, is a Fintech Company headquartered in Carlsbad, California. AppTech utilizes innovative payment processing and digital banking technologies to complement its core merchant services capabilities. The Company’s patented and proprietary software will provide progressive and adaptable products that are available through a suite of synergistic offerings directly to merchants, banking institutions, and business enterprises.

AppTech has a highly secure digital payments platform that we acquired and are further developing digital banking products to power commerce experiences for clients and their customers. Based upon industry standards for payment and banking protocols, we will offer standalone products and fully integrated solutions that deliver innovative, unparalleled payments, banking, and financial services experiences. Our processing technologies can be taken off-the-shelf or tapped into via our RESTful APIs to build fully branded and customizable experiences while supporting tokenized, multi-channel, and multi-method transactions.

AppTech stock trades under the symbol “APCX” and its warrants trade under the symbol “APCXW,” on the Nasdaq Capital Market ("NASDAQ").

In June 2023, the Company entered into licensing agreements with InstaCash and PayToMe.co. As part of the arrangement with these parties, the Company negotiated preferred stock equal to 7.5% of each party’s total fully diluted capital stock. As of the date of this filing, the shares have not been issued to AppTech. InstaCash’s CEO also provides investor relation services to the Company. Additionally, PayToMe.co is a related party to AppTech. Senior members of the Company sit on PayToMe.co’s board of directors and AppTech’s Chief Financial Officer (“CFO”) is married to its founder and Chief Executive Officer (“CEO”).

In August 2023, the Company entered into a sales agreement under which it may sell shares of its common stock having an aggregate offering price of up to $18.0 million through “at-the-market” (ATM) offerings, pursuant to its shelf registration statement on Form S-3 on file with the SEC. As of this filing, and due to the baby shelf calculation, the Company cannot currently raise capital under the ATM.

On October 13, 2023, the Company entered into a Membership Interest Purchase Agreement (the “Purchase Agreement”) with Alliance Partners, LLC, a Nevada-based software development company doing business as FinZeo, and Chris Leyva (the “Seller”). Under this agreement, the Company acquired 100% of the Seller’s membership interest in Alliance Partners. The primary purpose of this acquisition was to gain control of FinZeo’s intellectual property, key personnel, and software platform, which are integral to boarding the Company’s potential customers. The total consideration for the transaction was $2.0 million in cash, with the Company also assuming certain short-term and long-term liabilities of Alliance Partners. The transaction closed on October 26, 2023.

Subsequent to the closing of the transaction, the payment terms were amended various times with the last amendment executed on June 20, 2024. For details regarding the payment schedule and the equity considerations provided to the Seller, refer to Note 8. Stockholders’ Equity - Equity Issued related to Acquisition section.

The remaining outstanding payable as of September 30, 2024 is $1.20 million and is secured by substantially all the Company’s assets.

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 intends to maintain adequate working capital and adhere to prudent financial forecasting.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying consolidated unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and the rules and regulations of the Securities and Exchange Commission (“SEC”). In the opinion of the Company’s management, the accompanying financial statements reflect all adjustments, consisting of normal, recurring adjustments, considered necessary for a fair presentation of the results for the interim periods ended September 30, 2024 and September 30, 2023. Although management believes that the disclosures in these unaudited financial statements are adequate to make the information presented not misleading, certain information and footnote disclosures normally included in financial statements that have been prepared in accordance with U.S. GAAP have been omitted pursuant to the rules and regulations of the SEC.

The accompanying consolidated unaudited financial statements should be read in conjunction with the Company’s financial statements and notes related thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on April 1, 2024. The interim results for the nine months ended September 30, 2024 are not necessarily indicative of the results to be expected for the year ending December 31, 2024 or for any future interim periods.

Basis of Consolidation

The consolidated unaudited financial statements include the accounts of AppTech Payments Corp., and wholly owned subsidiaries of which the Company is the primary beneficiary. All significant inter-company accounts and transactions are eliminated in consolidation.

Use of Estimates

The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

The Company makes critical estimates and assumptions in valuing: stock-based awards, intangible assets and the related goodwill impairment test. Actual results could differ from those estimates.

Prior Period Reclassifications

Certain prior period amounts have been reclassified to conform to the current period presentation. Specifically, the Company reclassified ‘Accounts Payable - Related Party’ from ‘Accounts Payable’ within the consolidated balance sheet. As a result, ‘Accounts Payable - Related Party’ is presented separately as of September 30, 2024 and December 31, 2023.

Concentration of Credit Risk

Cash and cash equivalents are maintained at financial institutions and, at times, balances may exceed federally insured limits of $250,000 per institution that pays Federal Deposit Insurance Corporation insurance premiums. The Company has never experienced any losses related to these balances.

The accounts receivable from merchant services are paid by the financial institutions on a monthly basis. As of September 30, 2024, 94% of the accounts receivable balance was generated from four customers represent 41%, 23%, 19%, and 11% respectively. As of December 31, 2023, 80% of the accounts receivable balance was generated from two customers.

For the nine months ended September 30, 2024, 77% of the revenue was generated from three customers, represent 42%, 21% and 14%, respectively. For the nine months ended September 30, 2023, two customers represented a significant amount of total revenue, at 61% and 20%, respectively. The loss of the customers would have a significant impact on the Company’s financials.

Revenue Recognition

The Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, codified as Accounting Standards Codification (“ASC”) 606 Revenue from Contracts with Customers, which provides a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers.

The Company provides merchant processing solutions for credit cards and electronic payments. In all cases, the Company acts as an agent between the merchant, which generates the credit card and electronic payments, and the bank, which processes such payments.

The Company’s revenue is generated on services priced as a percentage of transaction value or a specified fee transaction, depending on the card or transaction type. Revenue is recorded as services are performed, which is typically when the bank processes the merchant’s credit card and electronic payments. Consideration paid to channel partners is recorded as a reduction in revenues.

Licensing Revenue

The Company is actively pursuing strategic partnership agreements that licenses our portfolio of patents in return for a fee. The licensing fee is deferred and recognized evenly on a monthly basis over the term of the service period or contract.

Intangible Assets and Intellectual Property

Intellectual Property

The Company amortizes intellectual property based on the estimated period over which the economic benefits of the intangible assets are expected to be consumed. Typically, the Company amortizes its intellectual property, including patents and other identifiable intangible assets, on a straight-line basis. The amortization periods generally range from three years to fifteen years, depending on the nature of the asset and its expected useful life.

Capitalized Software Development Costs

The Company capitalizes certain costs related to the development of its digital payment and banking platform, including employee compensation and consulting fees for third-party developers, only when it is probable that the development will result in new or additional functionality. Costs incurred during the preliminary project planning phase and post-implementation phase are expensed as incurred. The identifiable intangible assets, such as acquired technology, intellectual property, and non-competes, are recorded at their acquisition-date fair value using a combination of the income and cost approaches. The capitalized software development costs are amortized on a straight-line basis over the estimated useful life of the asset.

Goodwill

The Company accounts for goodwill in accordance with ASC 350, Intangibles – Goodwill and Other (“ASC 350”). ASC 350 requires that goodwill and other intangibles with indefinite lives should be tested for impairment annually or on an interim basis if events or circumstances indicate that the fair value of an asset has decreased below its carrying value.

Research and Development

In accordance with ASC 730, Research and Development (“R&D”) costs are expensed when incurred. R&D costs include costs of acquiring patents and other unproven technologies, contractor fees and other costs associated with the development of our technology platform, contract and other outside services. Total R&D costs for the nine months ended September 30, 2024 and 2023 were approximately $1.3 million and $2.8 million, respectively.

Per Share Information

Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the year. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the year, increased by the potentially dilutive common shares that were outstanding during the year. Dilutive securities include stock options, warrants granted, and convertible preferred stock.

The number of common stock equivalents not included in diluted income per share was 14,360,863 and 7,436,726 for the nine months ended September 30, 2024 and 2023, respectively. The weighted average number of common stock equivalents is not included in diluted income (loss) per share, because the effects are anti-dilutive.


	September 30, 2024		September 30, 2023

Series A preferred stock		1,148		1,148
Warrants		9,156,627		5,823,036
Options		5,203,088		1,612,542
Total		14,360,863		7,436,726

Stock Based Compensation

The Company recognizes as compensation expense all share-based payment awards made to employees, directors, and consultants, including grants of stock, stock options, and warrants, based on their estimated fair values. For stock awards, fair value is determined based on the closing price of the Company’s common stock on the grant date and is recognized over the service period required for the employees, directors, and consultants to earn the awards. For stock options and warrants, fair value is estimated using an appropriate valuation model at the grant date, considering the terms and conditions under which the awards were granted. The expense is similarly recognized over the period during which the service conditions are expected to be met. Additionally, the Company has several grant agreements that include options awarded based on contingent performance. For these performance-based option grants, the Company records the fair market value of the options at the time the performance criteria are fully met.

New Accounting Pronouncements

The FASB issues ASUs to amend the authoritative literature in ASC. There have been a number of ASUs to date that amend the original text of ASC. The Company believes those issued to date either (i) provide supplemental guidance, (ii) are technical corrections, (iii) are not applicable to the Company or (iv) are not expected to have a significant impact on the Company.

NOTE 3 – INTANGIBLE ASSETS

Intellectual Property

The Company has two patent portfolios, which include:

Mobile Payment Technology This portfolio consists of four mobile technology patents that range from System & Method for Delivering Web Content to a Mobile Device, Computer to Mobile Two-Way Chat System & Method, and Mobile to Mobile payment.

Geolocation Technology This portfolio consists of 13 patents that are focused on the delivery, purchase, or request of any products or services within specific geolocation and time parameters, provided by a consumer’s mobile phone anywhere in the United States. This portfolio houses the patent that protects all advertising on a mobile phone, including in a store’s mobile application. We amortize the patents on a straight-line basis from three years to 15 years, which approximates the way the economic benefits of the intangible asset will be consumed.

As of September 30, 2024 and December 31, 2023, the gross value of patents is $407 thousand. As of September 30, 2024 and December 31, 2023, cumulative amortization is approximately $334 thousand and $232 thousand, respectively.

On October 26, 2023, the Company acquired FinZeo, a Nevada based LLC. The gross value of acquired intangible assets is $4.4 million. As of September 30, 2024 and December 31, 2023, cumulative amortization is approximately $809 thousand and $147 thousand, respectively. The estimated aggregate amortization of the intellectual property for each of the five succeeding fiscal years is approximately $882 thousand.

Intellectual Property as of September 30, 2024 and December 31, 2023 are as follows:


Intellectual Property	September 30, 2024			December 31, 2023
Beginning Balance	$	4,428		$	311
Acquisition of intangible assets		–			4,400
Amortization expenses		(764	)		(283	)
Ending Balance	$	3,664		$	4,428

Capitalized Software Development Costs

The Company capitalizes certain costs related to the development of its digital payment and banking platform.

During the nine months of September 30, 2024, the Company capitalized software development cost at $557 thousand.

As of September 30, 2024, the gross value of capitalized software development cost is approximately $2.1 million. As of September 30, 2024 and December 31, 2023, cumulative amortization is approximately $695 thousand and $419 thousand, respectively. The estimated aggregate amortization of the capitalized software development cost for each of the four succeeding fiscal years is approximately $480 thousand.


	September 30, 2024			December 31, 2023
Beginning Balance	$	1,147		$	4,921
Additions		557			–
Impairment		–			(3,072	)
Amortization expenses		(275	)		(702	)
Ending Balance	$	1,429		$	1,147

See Note 7 - Commitments and Contingencies for discussions of Infinios Financial Services (formerly NEC Payments B.S.C.) and the write-off of capitalized software development costs.

Goodwill

On October 26, 2023, the Company completed the acquisition of Alliance Partners, LLC, a Nevada limited liability company. The difference between the fair value of the purchase price and the net assets acquired (including the assembled workforce) is recorded as goodwill. As of September 30, 2024, the Company recorded goodwill of approximately $1.2 million.

See Note 1 - Purchase of Alliance Partners, LLC.

NOTE 4 – ACCRUED LIABILITIES

Accrued liabilities as of September 30, 2024 and December 31, 2023 are as follows:

Schedule of accrued liabilities
	September 30, 2024		December 31, 2023
Accrued payroll	$	241	$	189
Anti-dilution provision		72		72
Payables due to related party		1,200		1,500
Other		178		197
Total accrued liabilities	$	1,691	$	1,958

Related parties noted below are either members of management, board of directors, significant shareholders, or individuals that have significant influence over the Company.

Anti-dilution provision

In connection with the shares to be issued as part of the HotHand acquisition, and anti-dilution provision with Infinios, the Company accrued an additional 39,706 shares of its common stock at $1.81 per share for a total of $72 thousand. The shares will be canceled and returned to the Company treasury after the Settlement Agreement is fulfilled and have not been issued to Infinios as of September 30, 2024.

See Note 7 - Commitment and Contingencies.

Payables due to related party

The remaining outstanding payable as of September 30, 2024, is $1.20 million for the purchase of FinZeo. See Note 1. Purchase of Alliance Partners, LLC (Business Combinations).

NOTE 5 – NOTES PAYABLE

The following is a summary of notes payable outstanding as of September 30, 2024 and December 31, 2023.

Notes Payable

In 2020, the Company entered into a 30-year unsecured note payable with the U.S. Small Business Administration office for $68 thousand in proceeds and with interest at 3.75% per annum. All payments of principal and interest are deferred for thirty months from the date of the note. Payments totaling $4 thousand are due each year through the maturity date of July 1, 2050.

On June 10, 2024, the Company entered into a 60-day unsecured note agreement with Black Ice Advisors, LLC, a third-party lender, for proceeds of $200 thousand. The note bears interest of $24 thousand, due along with the principal amount within 60 days of receipt of funds, resulting in a total payable amount of $224 thousand. Additionally, the Company issued 30,000 shares of AppTech Common Stock to the lender on June 17, 2024. The implied annual interest rate for this note is 73.0%. The maturity date of the note is August 10, 2024. The note agreement includes a default provision where the Company’s failure to pay the total amount of $224,000 by the due date will result in an additional 140% of the outstanding principal and interest, payable in free-trading AppTech Common Stock valued at the average bid price from the past 7 trading days, or a late fee of $500 per day, at the Company’s discretion. On August 12, 2024, the note and accrued interest, totaling $230,000, were repaid. Refer to Note 8 – Stockholders’ Equity /Stock Issued for Note Payable.

As of September 30, 2024 and December 31, 2023, the balance of all note payable outstanding was $63 thousand and $66 thousand, with accrued interest of $0 and $0, respectively.

Convertible Note

On July 10, 2024, the Company closed a private placement offering (the “Private Placement Offering”) consisting of a 6% convertible debenture (the “Debenture”) with a principal amount of $1,100,000 and a warrant (the “Warrant”) to purchase up to 750,000 shares of the Company’s common stock. The Debenture was sold to the investor (the “Purchaser”) for $1,000,000, reflecting an original issue discount of 10%, pursuant to a Securities Purchase Agreement executed on the same date. The Warrant, which expires five years from its date of issuance, is exercisable at any time by the holder for up to 750,000 shares of common stock at an initial exercise price of $1.16 (the “Exercise Price”), subject to adjustments as further discussed below. The fair value of the warrants was determined to be $0.85 per share as further discussed in Note 8 - Stockholder’s Equity.

Net proceeds from the Private Placement Offering were $910,000, after accounting for a $20,000 non-accountable fee withheld pursuant to the Purchase Agreement and $70,000 paid to a registered broker-dealer, for the Company’s benefit. The offering includes dilutive issuance protection and prohibits variable rate transactions until the Debenture is fully paid. 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 a fair value of $0.96 per share.

The Debenture matures twelve months from its date of issuance and bears interest at a rate of 6% per annum, payable on the maturity date. The Debenture is convertible, at the option of the holder, into such number of shares of common stock of the Company equal to the principal amount of the Debenture plus all accrued and unpaid interest, at an initial conversion price of $1.07 (the “Conversion Price”), subject to adjustment for stock splits, stock dividends, recapitalizations, and similar events. Additionally, the Conversion Price may be reduced at the option of the holder if the Company issues or grants any option to purchase common stock or other convertible securities at an effective price lower than the then-current Conversion Price.

The Debenture includes a redemption feature allowing the Company to prepay the Debenture at 110% of the principal amount and 110% of accrued interest. Additionally, if the Company raises $1.5 million or more in aggregate funds from public offerings or private placements (excluding insider investments), 50% of the proceeds from such fundraising activities must be used for the repayment of the Debenture, unless otherwise waived by the Purchaser. Default provisions are also included, providing for specific penalties and remedies in the event of non-compliance with the terms of the Debenture.

The Warrant Shares, the Commitment Shares and the shares of our 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 us and Armistice Capital Master Fund discussed in Note 8. The exercise price of the Warrant was reduced to $0.70 per share. The conversion price of the debenture was also reduced to $0.70 as a result of this transaction triggering the conversion price adjustment provisions within the debenture. As a result of the adjustment provision within the warrants being triggered, the Company revalued the warrants both before and after the reset event, and the change in fair value of $15 thousand was recorded to additional paid-in capital and accumulated deficit as a reset.

Effective as of August 29, 2024, the Warrant was exercised cashless pursuant to the terms of the Warrant, resulting in the issuance of 521,739 freely tradable shares of our common stock.

As of September 30, 2024, the outstanding balance on the convertible note payable was $1.1 million, with accrued interest of $15 thousand. The total discount on the Debenture related to the debt component amounted to $552 thousand, composed of the following components: (i) Original Issue Discount (OID) of $100 thousand; (ii) the relative fair market value of Warrants of $334 thousand; (iii) costs allocated to debt component of the transaction of $57 thousand, and (iv) allocation of the value of the common shares issued at $61 thousand, with the remainder of the additional costs allocated to equity.

The total allocation of costs, including a portion of the value of the common shares, to equity was $68 thousand. The remaining unamortized discount balance on the convertible note was $428 thousand, following amortization expenses of $124 thousand recorded during the period.

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 20 months.

The rent expense was $56 thousand and $55 thousand for the nine months ended September 30, 2024 and 2023, respectively.

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.

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. During 2021 and 2022, the Company paid Infinios $1.8 million and issued to an Infinios’ affiliate 2,347,905 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 assets included in Capitalized software development and license and Prepaid license fees, as they were 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 alleged damages of $598,525, and asserted 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 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. As of date of financial statements, amounts have yet to be paid.

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.

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 100,000 shares of preferred stock with a par value of $0.001 per share. As of September 30, 2024 and December 31, 2023, there were fourteen (14) 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. Holders of Series A preferred stock have a right to convert each share of Series A into 82 shares of common stock.

Common Stock

The Company is authorized to issue 105,263,158 shares of $0.001 par value as of September 30, 2024 and December 31, 2023. There were 27,478,328 and 22,251,742, respectively, shares of common stock outstanding as of September 30, 2024 and December 31, 2023. The holders of common stock are entitled to one vote per share 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 common stock are entitled to any dividends that may be declared by the board of directors out of funds legally available, therefore subject to the prior rights of holders of any outstanding shares of preferred stock and any contractual restrictions against the payment of dividends on common stock. In the event of liquidation or dissolution of the Company, holders of common stock are entitled to share ratably in all assets remaining after payment of liabilities and the liquidation preferences of any outstanding shares of preferred stock. Holders of common stock have no preemptive or other subscription rights and no right to convert their common stock into any other securities.

Public Offerings

In February 2023, the Company announced the closing of its previously announced $5.0 million registered direct offering (the “Registered Direct Offering”) with a single institutional investor to sell 1,666,667 shares of its common stock (the “Shares”) and warrants to purchase up to 1,666,667 shares (the “Warrants”) in a concurrent private placement (the “Private Placement”). The combined purchase price for one Share and one Warrant was $3.00. Each of the Warrants has an exercise price of $4.64 per share of common stock and are exercisable on and after August 1, 2023. The Warrants expire five years from the date on which they become exercisable. The aggregate gross proceeds from the Registered Direct Offering and the concurrent Private Placement were approximately $5.0 million before deducting placement agent fees and other estimated offering expenses. The offering that was completed in February 2023, caused a reset to the exercise price of existing warrants from the S-1 offering that had a strike price of $5.19 and a future offerings floor price of $4.15. Accordingly, the floor price was reset to $4.15 in February 2023. 4,156,626 warrants were reset and $763 thousand was recorded to additional paid-in capital and accumulated deficit as a result of the reset.

In August 2023, the Company entered into a sales agreement under which it may sell shares of its common stock having an aggregate offering price of up to $18.0 million through “at-the-market” offerings (ATM), pursuant to its shelf registration statement on Form S-3 on file with the SEC. In total, as of the end of September 30, 2024, the Company sold 898,780 shares of common stock, for which we received net proceeds of $2.1 million, after deducting commissions, fees and expenses.

In October 2023, the Company entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) with a certain accredited and institutional investor (the “Purchaser”) pursuant to which the Company has agreed to issue and sell to Purchaser an aggregate of: (i) 1,666,667 shares (the “Shares”) of the Company’s common stock, par value $0.001 per share (the “Common Stock”) and (ii) warrants (the “Purchase Warrants”) to purchase up to 1,666,667 shares of Common Stock, exercisable at $2.74 per share (the “Offering”). The offering price per Share and associated Purchase Warrants was $2.10. The October Warrants will expire five years from the date on which they become exercisable. On October 26, 2023, the Company closed the Offering and raised $3.5 million in gross proceeds from the Offering.

On March 26, 2024, AppTech Payments Corp. entered into an underwriting agreement with EF Hutton LLC, as representative of the several underwriters, relating to the public offering of 2,000,000 shares of common stock, par value $0.001 per share, at a purchase price per share to the public of $1.00. Pursuant to the Underwriting Agreement, the Company granted the Underwriters a 45-day option to purchase up to an additional 300,000 shares of Common Stock at the Offering Price, less any underwriting discounts and commissions.

As of September 30, 2024, approximately $60.7 million remains available under the shelf registration statement Form S-3 (File No. 333-265526) previously filed and declared effective by the Securities and Exchange Commission (SEC) on July 15, 2022. SEC regulations limit the amount of funds we can raise during any 12-month period pursuant to our effective shelf registration statement on Form S-3. We are currently limited by the Baby Shelf Rule as of the filing of this Report, until such time as our public float exceeds $75 million.

Stock Issued for Services

During the nine months ended September 30, 2024 and 2023, the Company granted 485,000 and 330,000 shares of common stock, respectively, to several consultants in connection with business development and professional services. The Company valued the common stock issuances at $467 thousand and $711 thousand, respectively, based upon the closing market price of the Company’s common stock on the date of the agreement.

Stock Issued with Note Payable

During the nine months ended September 30, 2024, the Company issued 30,000 shares of common stock in connection with a note payable. The 2024 issuance was valued at $27 thousand, based on the closing market price of the Company’s common stock on the agreement date. The issuance of the shares was part of the consideration for the note payable. The value of the shares issued was recorded as a debt discount and was amortized over the note’s life. The interest expense related to this amortization is $27 thousand and is included in the Company’s financial statements for the period. On August 12, 2024, the note and accrued interest, totaling $230,000, were repaid. Refer to Note 5 - Note Payables.

Stock Issued for Convertible Note

See Note 5 - Note Payable - Convertible Note.

Equity Issued related to Acquisition

On October 26, 2023, the Company completed the acquisition of FinZeo. The Seller received cash and stock as part of the purchase price. See Note 1 - Purchase of Alliance Partners, LLC.

As of September 30, 2024, the payment terms under the Purchase Agreement with Alliance Partners, LLC, were amended as follows: 1) $150,000 due on or before July 11, 2024; 2) Remaining payments are deferred until either February 1, 2025, or until the Company generates $400,000 in monthly revenue from the FinZeo products (after cost of sales, excluding operating expenses). Once either condition is met, the payment schedule will resume with payments every 30 days, in amounts ranging from $75,000 to $375,000.

In consideration for modifying the payment schedule, Chris Leyva received a total of 15,000 shares of AppTech Payments Corp. and 55,000 options to purchase shares of the Company’s stock.

Stock Options

The Company grants stock options as part of employee compensation and recognizes these options’ expense over the vesting period. If an employee does not meet certain conditions such as sales targets or leaves the Company before the options vest, these options are forfeited as they occur.

On December 7, 2021, the board authorized the Company’s Equity Incentive Plan to facilitate the grant of equity incentives to employees (including our named executive officers), directors, independent contractors, merchants, referral partners, channel partners, and employees of our company. This plan is essential for attracting, retaining, and motivating these key personnel, which is critical to our long-term success. In May 2023, shareholders approved an additional 700,000 shares for the Company’s Equity Incentive Plan, bringing the total authorized shares to 1,752,632. In May 2024, shareholders approved an additional 950,000 shares under a newly adopted 2024 Equity Incentive Plan (the "2024 Plan"), which replaced the previous plan in its entirety. As a result, a total of 2,702,632 shares of common stock were authorized under the 2024 Plan, with 451,864 shares available for issuance as of September 30, 2024.

In June 2024, the Company canceled 1 million contingent options related to the termination of a former employee.

On March 20, 2024, the Company extended the expiration term of vested and outstanding stock options to 10 years from the original grant date for current employees and consultants. The fair value was calculated both on the modification date and prior to the modification. During the nine months ended September 30, 2024, the Company recorded the option modification expense of $325 thousand.

During the nine months ended September 30, 2024, the Company granted 3,509,750 options to purchase of common stock. These grants included:

	1.	1,000,000 options to a consultant, with vesting contingent upon reaching specified sales milestones. The fair value of these options, which are non-plan with a one-year life, will be recognized as an expense when vesting appears probable. These options have an exercise price of $1.58 per share and a fair value of $0.64 per share on the issuance date. The Company did not record any stock based compensation expense during the nine months ended September 30, 2024 as these were not determined to be probable of vesting.

	2.	On April 4, 2024, the Company granted 406,000 options to current employees and consultants with an exercise price of $0.95, a ten-year expiration term, and a fair value on the grant date of $0.86. The Company recognized $349 thousand related to this grant. The options were fully vested upon on the grant date.

	3.	During the nine months ended September 30, 2024, the Company granted 141,250 options to the board of directors and consultants. These options have a ten-year expiration period, with exercise prices ranging from $1.70 to $2.165 per share. The fair value of these options, as determined on the grant date, ranged from $0.76 to $1.53 per share.

	4.	On July 3, 2024, the Company granted 510,000 options under the equity plan and approximately 1.5 million options outside of the plan to employees and consultants. These options, which expire ten years from the grant date, have an exercise price of $0.97 per share and a fair value of $0.87 per share on the issuance date. The vesting of these options is contingent upon reaching specified company milestones. The fair value of these options will be recognized as an expense when the vesting becomes probable.

The following table summarizes option activity:

Schedule of option activity
	Number of shares			Weighted Average exercise price		Weighted Average remaining years
Outstanding December 31, 2023		2,725,564		$	1.84		4.07
Issued		3,509,750			1.15
Exercised		–			–
Cancelled		(1,032,226	)		2.25
Outstanding as of September 30, 2024		5,203,088		$	1.30		7.25
Outstanding as of September 30, 2024, vested		1,740,591		$	1.23		7.87

The unvested options includes a total of 3.5 million options contingent upon reaching specified sales milestones. The remaining expense to be recognized, exclusive of the contingent performance-based options, is $0 thousand as of September 30, 2024.

During the nine months ended September 30, 2024, the Company recorded $885 thousand in option expenses, which includes the modification expense of $325 thousand and the company-wide grant of 406,000 options valued at $349 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:

Schedule of fair value assumptions
Market value of common stock on issuance date			$0.72 - $3.12
Exercise price			$0.70 - $3.12
Expected volatility			102% - 144%
Expected term (in years)			1.0 - 10.0
Risk-free interest rate			3.58% - 5.00%
Expected dividend yields			–

Warrants

As of September 30, 2024, the Company has 9,156,627 warrants outstanding. The following table summarizes warrant activity:

Schedule of warrant activity
	Number of shares			Weighted Average exercise price			Weighted Average remaining years
Outstanding December 31, 2023		7,489,960		$	3.52			3.83
Cancelled		–			–
Exercised		(2,416,667	)	$	(0.70	)
Issued		4,083,334		$	0.78
Outstanding as of September 30, 2024		9,156,627		$	2.67			3.68

See Note 5 for warrants issued with convertible note.

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 1,666,667 warrants to purchase shares of AppTech Payments Corp. (the "Company") common stock on a cash basis at a reduced exercise price of $0.70 per share. This exercise generated gross proceeds of $1,166,667 for the Company. After deducting fees and expenses, including a 7% cash fee and other associated legal expenses, the Company received net proceeds of approximately $1,010,000.

As part of the inducement transaction, the Company issued new warrants ("New Warrants") to the Selling Stockholder for the purchase of an additional 3,333,334 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 $0.67 per warrant, using the Black-Scholes option-pricing model. The inputs used were similar to those used for the options as disclosed above. The total fair value of the 3,333,334 new Warrants, approximately $2.2 million, 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.

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 $4.64 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.

Release S-1

On September 27, 2024, the Company filed a registration statement on Form S-1 with the Securities and Exchange Commission (the “SEC”), which relates to the resale by Armistice Capital Master Fund Ltd. (the “Selling Stockholder”) of up to 5,000,001 shares of common stock, par value $0.001 per share (the “Common Stock”), of AppTech Payments Corp. (the “Company”). The shares consist of (i) up to 1,666,667 shares issuable upon exercise of warrants at an exercise price of $0.70 per share, issued on February 2, 2023 (the “February 2023 Warrants”), and (ii) up to 3,333,334 shares issuable upon exercise of warrants at an exercise price of $0.70 per share, issued on August 30, 2024 (the “New Warrants”).

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 at a price of $0.56 per share, based on the prior closing stock price. The shares vested immediately.

Infinios Financial Services Case Update (formerly NEC Payments B.S.C.)

Refer to Note 8 - Commitments and Contingencies.

Nasdaq

On May 9, 2024, AppTech Payments Corp. (the “Company”) received a deficiency notice from Nasdaq, indicating that the Company's common stock had traded below the minimum bid price of $1.00 for thirty consecutive business days, as required by Nasdaq Listing Rule 5550(a)(2). The Company was initially given until November 5, 2024, to regain compliance; however, as the Company has not achieved compliance and does not meet the $5 million minimum stockholders' equity required for an additional extension, the Company is ineligible for a second 180-day compliance period.

Separately, on August 21, 2024, the Company was notified by Nasdaq of a deficiency in meeting the $2.5 million minimum stockholders' equity requirement under Nasdaq Listing Rule 5550(b)(1), based on our Form 10-Q filing for the period ended June 30, 2024. The Company submitted an updated compliance plan to Nasdaq on October 25, 2024, detailing steps to regain and maintain compliance. However, Nasdaq has determined that this deficiency, in conjunction with the bid price deficiency, constitutes an additional basis for delisting.

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 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 30-45 days from the request. The Company’s appeal to the delisting action is now stayed pending the Panel's decision.

Convertible Note Payable - Debenture Conversion

On October 22, 2024, the Company received a Notice of Conversion from Peak One Opportunity Fund, LP to convert $100 thousand at a conversion price of $0.70 for 142,857 shares of common stock, decreasing the outstanding principal amount of the Debenture to $1 million. See Note 5 - Note Payables - Convertible Note

Potential Private Offering

In October, the Company received $600 thousand from a potential investor. The Company and the potential investor are actively engaged in finalizing the full terms of the investment, with the goal of an additional investment and concluding the agreement by the end of November 2024.

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.

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.

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.

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.

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.

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.

Management’s Plan to Address Going Concern Considerations

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.

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.

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.

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.

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 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.

Former Employees

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.

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 adopted or terminated any Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement, as each term is defined in Item 408(a) of Regulation S-K.

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)

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)

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

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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 14, 2024	By:	/s/ Luke D’Angelo
	Name:	Luke D’Angelo
	Title:	Chief Executive Officer

Date: November 14, 2024	By:	/s/ Meilin Yu
	Name:	Meilin Yu
	Title:	Chief Financial Officer and Treasurer

Exhibit 31.1

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Luke D’Angelo, certify that:

I have reviewed this report on Form 10-Q of AppTech Payments Corp.;

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 14, 2024	/s/ Luke D’Angelo
	Luke D’Angelo
	Chief Executive Officer, Chairman and Director

Exhibit 31.2

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Meilin Yu, certify that:

I have reviewed this report on Form 10-Q of AppTech Payments Corp.;

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 14, 2024	/s/ Meilin Yu
	Meilin Yu
	Chief Financial Officer and Treasurer

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of AppTech Payments Corp. on Form 10-Q for the period ended September 30, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Luke D’Angelo, Chairman of the Board and Chief Executive Officer, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership.

Date: November 14, 2024	/s/ Luke D’Angelo
	Luke D’Angelo
	Chief Executive Officer, Chairman and Director

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of AppTech Payments Corp. on Form 10-Q for the period ended September 30, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Meilin Yu, Chief Financial Officer of AppTech Payments Corp., certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership.

Date: November 14, 2024	/s/ Meilin Yu
	Meilin Yu
	Chief Financial Officer and Treasurer

Cover - shares	9 Months Ended
Cover - shares	Sep. 30, 2024	Nov. 14, 2024
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Sep. 30, 2024
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2024
Current Fiscal Year End Date	--12-31
Entity File Number	001-39158
Entity Registrant Name	AppTech Payments Corp.
Entity Central Index Key	0001070050
Entity Tax Identification Number	65-0847995
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	5876 Owens Avenue
Entity Address, Address Line Two	Suite 100
Entity Address, City or Town	Carlsbad
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	92008
City Area Code	760
Local Phone Number	707-5959
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		27,646,185
Common Stock, $0.001 par value per share
Title of 12(b) Security	Common Stock, $0.001 par value per share
Trading Symbol	APCX
Security Exchange Name	NASDAQ
Warrants, each whole warrant exercisable for one share of common stock at an exercise price of $4.15
Title of 12(b) Security	Warrants, each whole warrant exercisable for one share of common stock at an exercise price of $4.15
Trading Symbol	APCXW
Security Exchange Name	NASDAQ

CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Current assets
Cash and cash equivalents	$ 104	$ 1,281
Accounts receivable	12	30
Prepaid expenses	196	205
Total current assets	312	1,516
Note receivable	0	26
Right of use asset	29	66
Security deposit	19	9
Intangible assets, net of accumulated amortization	3,664	4,428
Goodwill	1,161	1,161
Capitalized software development, net of accumulated amortization	1,429	1,147
TOTAL ASSETS	6,614	8,353
Current liabilities
Accounts payable	2,484	1,680
Accounts payable - related party	102	119
Accrued liabilities	1,691	1,958
Convertible note payable and accrued interest, net of discount of $428 and $0, respectively	687	0
Notes payable	1	1
Deferred revenue	150	244
Right of use liability	38	78
Total current liabilities	5,153	4,080
Long-term liabilities
Right of use liability, net of current portion	0	14
Notes payable, net of current portion	62	65
Total long-term liabilities	62	79
TOTAL LIABILITIES	5,215	4,159
Commitments and contingencies (Note 7)
Stockholders’ equity
Preferred stock: 100,000 shares authorized at September 30, 2024 and December 31, 2023, respectively; Series A preferred stock: $0.001 par value;14 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively.	0	0
Common stock, $0.001 par value; 105,263,158 shares authorized; 27,478,328 and 22,251,742 issued and outstanding at September 30, 2024 and December 31, 2023, respectively	27	22
Additional paid-in capital	169,120	163,921
Accumulated deficit	(167,748)	(159,749)
Total stockholders’ equity	1,399	4,194
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$ 6,614	$ 8,353

CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Statement of Financial Position [Abstract]
Convertible note payable and accrued interest, net of discount	$ 428	$ 0
Preferred stock, shares authorized	100,000	100,000
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares issued	14	14
Preferred stock, shares outstanding	14	14
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	105,263,158	105,263,158
Common stock, shares issued	27,478,328	22,251,742
Common stock, shares outstanding	27,478,328	22,251,742

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Income Statement [Abstract]
Revenues	$ 43,000	$ 140,000	$ 224,000	$ 363,000
Cost of revenues	24,000	44,000	49,000	159,000
Gross profit	19,000	96,000	175,000	204,000
Operating expenses:
Selling, general and administrative, including stock based compensation of $306 and $958 for the three months ended September 30, 2024 and 2023, respectively, $1,214 and $2,002 for the nine months ended September 30, 2024 and 2023, respectively	1,867,000	2,227,000	6,669,000	7,114,000
Impairment of intangible assets	0	0	0	6,131,000
Research and development, including stock based compensation of $6 and $327 for the three months ended September 30, 2024 and 2023, respectively, $138 and $956 for the nine months ended September 30, 2024 and 2023, respectively	2,000	751,000	1,278,000	2,774,000
Total operating expenses	1,869,000	2,978,000	7,947,000	16,019,000
Loss from operations	(1,850,000)	(2,882,000)	(7,772,000)	(15,815,000)
Other income (expenses)
Interest expense	(18,000)	(4,000)	(53,000)	(48,000)
Change in fair value of derivative liability	0	0	0	27,000
Debt discount amortization	(151,000)	0	(151,000)	0
Other income (expenses)	(6,000)	(5,000)	(8,000)	711,000
Total other expenses	(175,000)	(9,000)	(212,000)	690,000
Loss before provision for income taxes	(2,025,000)	(2,891,000)	(7,984,000)	(15,125,000)
Provision for income taxes	0	0	0	0
Net loss	(2,025,000)	(2,891,000)	(7,984,000)	(15,125,000)
Deemed dividend related to warrant resets	(15,000)	0	(15,000)	(763,000)
Net loss attributable to common stockholders	$ (2,040,000)	$ (2,891,000)	$ (7,999,000)	$ (15,888,000)
Basic net loss per common share	$ (0.08)	$ (0.15)	$ (0.33)	$ (0.86)
Diluted net loss per common share	$ (0.08)	$ (0.15)	$ (0.33)	$ (0.86)
Weighted-average number of shares used basic per share amounts	25,892,683	18,801,754	24,405,150	18,402,919
Weighted-average number of shares used diluted per share amounts	25,892,683	18,801,754	24,405,150	18,402,919

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Selling General And Administrative [Member]
Share-Based Payment Arrangement, Noncash Expense	$ 306	$ 958	$ 1,214	$ 2,002
Research And Development [Member]
Share-Based Payment Arrangement, Noncash Expense	$ 6	$ 327	$ 138	$ 956

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED) - USD ($) $ in Thousands	Series A Preferred Stocks [Member]	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Total
Beginning balance, value at Dec. 31, 2022		$ 17	$ 147,881	$ (140,474)	$ 7,424
Beginning balance, shares at Dec. 31, 2022	14	16,697,280
Net loss				(3,151)	(3,151)
Stock based compensation			1,094		1,094
Stock based compensation, shares		178,750
Repricing of warrants			763	(763)
Net proceeds from sale of common shares		$ 2	4,488		4,490
Net proceeds from sale of common shares, shares		1,666,667
Ending balance, value at Mar. 31, 2023		$ 19	154,226	(144,388)	9,857
Ending balance, shares at Mar. 31, 2023	14	18,542,697
Beginning balance, value at Dec. 31, 2022		$ 17	147,881	(140,474)	7,424
Beginning balance, shares at Dec. 31, 2022	14	16,697,280
Net loss					(15,125)
Ending balance, value at Sep. 30, 2023		$ 19	157,159	(156,362)	816
Ending balance, shares at Sep. 30, 2023	14	19,020,008
Beginning balance, value at Mar. 31, 2023		$ 19	154,226	(144,388)	9,857
Beginning balance, shares at Mar. 31, 2023	14	18,542,697
Net loss				(9,083)	(9,083)
Stock based compensation			813		813
Stock based compensation, shares		38,750
Ending balance, value at Jun. 30, 2023		$ 19	155,039	(153,471)	1,587
Ending balance, shares at Jun. 30, 2023	14	18,581,447
Net loss				(2,891)	(2,891)
Stock based compensation			1,285		1,285
Stock based compensation, shares		53,750
Issuance of stock for prepaid services			153		153
Issuance of stock for prepaid services, shares		145,000
Option exercise			15		15
Option exercise, shares		10,528
Net proceeds from ATM offering			667		667
Net proceeds from ATM offering, shares		229,283
Ending balance, value at Sep. 30, 2023		$ 19	157,159	(156,362)	816
Ending balance, shares at Sep. 30, 2023	14	19,020,008
Beginning balance, value at Dec. 31, 2023		$ 22	163,921	(159,749)	4,194
Beginning balance, shares at Dec. 31, 2023	14	22,251,742
Net loss				(3,037)	(3,037)
Stock based compensation		$ 1	486		487
Stock based compensation, shares		55,000
Net proceeds from sale of common shares		$ 2	2,436		2,438
Net proceeds from sale of common shares, shares		2,423,180
Ending balance, value at Mar. 31, 2024		$ 25	166,843	(162,786)	4,082
Ending balance, shares at Mar. 31, 2024	14	24,729,922
Beginning balance, value at Dec. 31, 2023		$ 22	163,921	(159,749)	4,194
Beginning balance, shares at Dec. 31, 2023	14	22,251,742
Net loss					(7,984)
Ending balance, value at Sep. 30, 2024		$ 27	169,120	(167,748)	1,399
Ending balance, shares at Sep. 30, 2024	14	27,478,328
Beginning balance, value at Mar. 31, 2024		$ 25	166,843	(162,786)	4,082
Beginning balance, shares at Mar. 31, 2024	14	24,729,922
Net loss				(2,922)	(2,922)
Stock based compensation			553		553
Stock based compensation, shares		105,000
Shares issued with convertible note payable			27		27
Shares issued with Note Payable, shares		30,000
Ending balance, value at Jun. 30, 2024		$ 25	167,423	(165,708)	1,740
Ending balance, shares at Jun. 30, 2024	14	24,864,922
Net loss				(2,025)	(2,025)
Stock based compensation			312		312
Stock based compensation, shares		325,000
Shares issued with convertible note payable			96		96
Shares issued with Note Payable, shares		100,000
Offering costs			(68)		(68)
Warrants issued with convertible note payable			334		334
Warrant repricing			15	(15)
Warrant exercise, net of offering costs		$ 2	1,008		1,010
Warrant exercise, shares		1,666,667
Warrant exercise - cashless
Warrant exercise - cashless, shares		521,739
Ending balance, value at Sep. 30, 2024		$ 27	$ 169,120	$ (167,748)	$ 1,399
Ending balance, shares at Sep. 30, 2024	14	27,478,328

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (7,984)	$ (15,125)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock based compensation	1,352	2,958
Cancellation of stock repurchase liabilities	0	(430)
Write off of note receivable	25	0
Impairment of intangible assets	0	6,131
Gain on settlement of convertible note, warrants, and derivative liabilities	0	(250)
Amortization of debt discount	151	4
Amortization of intangible assets and software	1,039	712
Change in fair value of derivative liabilities	0	(27)
Changes in operating assets and liabilities:
Accounts receivable	18	(202)
Prepaid expenses	10	614
Accounts payable	785	205
Accrued liabilities	(254)	(1,685)
Deferred revenue	(94)	557
Right of use asset and liability, net	(16)	(7)
Net cash used in operating activities	(4,968)	(6,545)
CASH FLOWS FROM INVESTING ACTIVITIES
Capitalized software development	(557)	(50)
Other assets	(10)	0
Net cash used in investing activities	(567)	(50)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from note payable	200	0
Payments on loans payable - related parties	0	(88)
Proceeds on convertible note payable	910	0
Proceeds from sale of common stock	2,438	5,157
Proceeds from exercise of warrants	1,010	0
Repayment of notes payable	(200)	(1,021)
Repayment of convertible notes payable	0	(679)
Proceeds received from exercise of stock options	0	15
Net cash provided by financing activities	4,358	3,384
Changes in cash and cash equivalents	(1,177)	(3,211)
Cash and cash equivalents, beginning of period	1,281	3,462
Cash and cash equivalents, end of period	104	251
Supplemental disclosures of cash flow information:
Cash paid for interest	32	1,233
Cash paid for income taxes	0	0
NON-CASH INVESTING AND FINANCING ACTIVITIES
Issuance of stock for prepaid services	68	268
Common stock issued with note payable	27	0
Common stock issued with convertible note payable	96	0
Warrants issued with the convertible note payable	334	0
Cancellation of stock repurchase liabilities	$ 0	$ 430

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended						9 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Thousands	Sep. 30, 2024	Jun. 30, 2024	Mar. 31, 2024	Sep. 30, 2023	Jun. 30, 2023	Mar. 31, 2023	Sep. 30, 2024	Sep. 30, 2023
Pay vs Performance Disclosure [Table]
Net Income (Loss)	$ (2,025)	$ (2,922)	$ (3,037)	$ (2,891)	$ (9,083)	$ (3,151)	$ (7,984)	$ (15,125)

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Sep. 30, 2024
Insider Trading Arrangements [Line Items]
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

ORGANIZATION AND DESCRIPTION OF BUSINESS

9 Months Ended

Sep. 30, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

ORGANIZATION AND DESCRIPTION OF BUSINESS

NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS

AppTech stock trades under the symbol “APCX” and its warrants trade under the symbol “APCXW,” on the Nasdaq Capital Market ("NASDAQ").

The remaining outstanding payable as of September 30, 2024 is $1.20 million and is secured by substantially all the Company’s assets.

Management’s Plan to Address Going Concern Considerations

Management intends to maintain adequate working capital and adhere to prudent financial forecasting.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Sep. 30, 2024

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

Basis of Consolidation

Use of Estimates

The Company makes critical estimates and assumptions in valuing: stock-based awards, intangible assets and the related goodwill impairment test. Actual results could differ from those estimates.

Prior Period Reclassifications

Concentration of Credit Risk

Revenue Recognition

Licensing Revenue

Intangible Assets and Intellectual Property

Intellectual Property

Capitalized Software Development Costs

Goodwill

Research and Development

Per Share Information


	September 30, 2024		September 30, 2023

Series A preferred stock		1,148		1,148
Warrants		9,156,627		5,823,036
Options		5,203,088		1,612,542
Total		14,360,863		7,436,726

Stock Based Compensation

New Accounting Pronouncements

INTANGIBLE ASSETS

9 Months Ended

Sep. 30, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

INTANGIBLE ASSETS

NOTE 3 – INTANGIBLE ASSETS

Intellectual Property

The Company has two patent portfolios, which include:

Intellectual Property as of September 30, 2024 and December 31, 2023 are as follows:


Intellectual Property	September 30, 2024			December 31, 2023
Beginning Balance	$	4,428		$	311
Acquisition of intangible assets		–			4,400
Amortization expenses		(764	)		(283	)
Ending Balance	$	3,664		$	4,428

Capitalized Software Development Costs

The Company capitalizes certain costs related to the development of its digital payment and banking platform.

During the nine months of September 30, 2024, the Company capitalized software development cost at $557 thousand.


	September 30, 2024			December 31, 2023
Beginning Balance	$	1,147		$	4,921
Additions		557			–
Impairment		–			(3,072	)
Amortization expenses		(275	)		(702	)
Ending Balance	$	1,429		$	1,147

See Note 7 - Commitments and Contingencies for discussions of Infinios Financial Services (formerly NEC Payments B.S.C.) and the write-off of capitalized software development costs.

Goodwill

See Note 1 - Purchase of Alliance Partners, LLC.

ACCRUED LIABILITIES

9 Months Ended

Sep. 30, 2024

Payables and Accruals [Abstract]

ACCRUED LIABILITIES

NOTE 4 – ACCRUED LIABILITIES

Accrued liabilities as of September 30, 2024 and December 31, 2023 are as follows:

Schedule of accrued liabilities
	September 30, 2024		December 31, 2023
Accrued payroll	$	241	$	189
Anti-dilution provision		72		72
Payables due to related party		1,200		1,500
Other		178		197
Total accrued liabilities	$	1,691	$	1,958

Related parties noted below are either members of management, board of directors, significant shareholders, or individuals that have significant influence over the Company.

Anti-dilution provision

See Note 7 - Commitment and Contingencies.

Payables due to related party

The remaining outstanding payable as of September 30, 2024, is $1.20 million for the purchase of FinZeo. See Note 1. Purchase of Alliance Partners, LLC (Business Combinations).

NOTES PAYABLE

9 Months Ended

Sep. 30, 2024

Debt Disclosure [Abstract]

NOTES PAYABLE

NOTE 5 – NOTES PAYABLE

The following is a summary of notes payable outstanding as of September 30, 2024 and December 31, 2023.

Notes Payable

As of September 30, 2024 and December 31, 2023, the balance of all note payable outstanding was $63 thousand and $66 thousand, with accrued interest of $0 and $0, respectively.

Convertible Note

Effective as of August 29, 2024, the Warrant was exercised cashless pursuant to the terms of the Warrant, resulting in the issuance of 521,739 freely tradable shares of our common stock.

See Note 9 - Subsequent Event - Convertible Note Payable - Debenture Conversion.

RIGHT OF USE ASSET

9 Months Ended

Sep. 30, 2024

Right Of Use Asset

RIGHT OF USE ASSET

NOTE 6 – RIGHT OF USE ASSET

Lease Agreement

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 20 months.

The rent expense was $56 thousand and $55 thousand for the nine months ended September 30, 2024 and 2023, respectively.

COMMITMENTS AND CONTINGENCIES

9 Months Ended

Sep. 30, 2024

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

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.

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.)

Terminated Employees

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.

STOCKHOLDERS’ EQUITY

9 Months Ended

Sep. 30, 2024

Equity [Abstract]

STOCKHOLDERS’ EQUITY

NOTE 8 – STOCKHOLDERS’ EQUITY

Series A Preferred Stock

Common Stock

Public Offerings

In August 2023, the Company entered into a sales agreement under which it may sell shares of its common stock having an aggregate offering price of up to $18.0 million through “at-the-market” offerings (ATM), pursuant to its shelf registration statement on Form S-3 on file with the SEC. In total, as of the end of September 30, 2024, the Company sold 898,780 shares of common stock, for which we received net proceeds of $2.1 million, after deducting commissions, fees and expenses.

Stock Issued for Services

Stock Issued with Note Payable

Stock Issued for Convertible Note

See Note 5 - Note Payable - Convertible Note.

Equity Issued related to Acquisition

On October 26, 2023, the Company completed the acquisition of FinZeo. The Seller received cash and stock as part of the purchase price. See Note 1 - Purchase of Alliance Partners, LLC.

In consideration for modifying the payment schedule, Chris Leyva received a total of 15,000 shares of AppTech Payments Corp. and 55,000 options to purchase shares of the Company’s stock.

Stock Options

In June 2024, the Company canceled 1 million contingent options related to the termination of a former employee.

During the nine months ended September 30, 2024, the Company granted 3,509,750 options to purchase of common stock. These grants included:

	1.	1,000,000 options to a consultant, with vesting contingent upon reaching specified sales milestones. The fair value of these options, which are non-plan with a one-year life, will be recognized as an expense when vesting appears probable. These options have an exercise price of $1.58 per share and a fair value of $0.64 per share on the issuance date. The Company did not record any stock based compensation expense during the nine months ended September 30, 2024 as these were not determined to be probable of vesting.

	2.	On April 4, 2024, the Company granted 406,000 options to current employees and consultants with an exercise price of $0.95, a ten-year expiration term, and a fair value on the grant date of $0.86. The Company recognized $349 thousand related to this grant. The options were fully vested upon on the grant date.

	3.	During the nine months ended September 30, 2024, the Company granted 141,250 options to the board of directors and consultants. These options have a ten-year expiration period, with exercise prices ranging from $1.70 to $2.165 per share. The fair value of these options, as determined on the grant date, ranged from $0.76 to $1.53 per share.

	4.	On July 3, 2024, the Company granted 510,000 options under the equity plan and approximately 1.5 million options outside of the plan to employees and consultants. These options, which expire ten years from the grant date, have an exercise price of $0.97 per share and a fair value of $0.87 per share on the issuance date. The vesting of these options is contingent upon reaching specified company milestones. The fair value of these options will be recognized as an expense when the vesting becomes probable.

The following table summarizes option activity:

Schedule of option activity
	Number of shares			Weighted Average exercise price		Weighted Average remaining years
Outstanding December 31, 2023		2,725,564		$	1.84		4.07
Issued		3,509,750			1.15
Exercised		–			–
Cancelled		(1,032,226	)		2.25
Outstanding as of September 30, 2024		5,203,088		$	1.30		7.25
Outstanding as of September 30, 2024, vested		1,740,591		$	1.23		7.87

Schedule of fair value assumptions
Market value of common stock on issuance date			$0.72 - $3.12
Exercise price			$0.70 - $3.12
Expected volatility			102% - 144%
Expected term (in years)			1.0 - 10.0
Risk-free interest rate			3.58% - 5.00%
Expected dividend yields			–

Warrants

As of September 30, 2024, the Company has 9,156,627 warrants outstanding. The following table summarizes warrant activity:

Schedule of warrant activity
	Number of shares			Weighted Average exercise price			Weighted Average remaining years
Outstanding December 31, 2023		7,489,960		$	3.52			3.83
Cancelled		–			–
Exercised		(2,416,667	)	$	(0.70	)
Issued		4,083,334		$	0.78
Outstanding as of September 30, 2024		9,156,627		$	2.67			3.68

See Note 5 for warrants issued with convertible note.

Issuance of New Warrants (Inducement Transaction)

Cashless Exercise of Peak One Warrants

Refer to Note 5 - Note Payables.

Release S-1

See Note 9 - Subsequent Events for additional subsequent events.

SUBSEQUENT EVENTS

9 Months Ended

Sep. 30, 2024

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

NOTE 9 – SUBSEQUENT EVENTS

Issuance of Common Stock Purchase Warrants

Issuance of restricted stock

In October 2024, the Company granted 25,000 shares of restricted stock to a consultant at a price of $0.56 per share, based on the prior closing stock price. The shares vested immediately.

Infinios Financial Services Case Update (formerly NEC Payments B.S.C.)

Refer to Note 8 - Commitments and Contingencies.

Nasdaq

Convertible Note Payable - Debenture Conversion

Potential Private Offering

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

9 Months Ended

Sep. 30, 2024

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

Basis of Consolidation

Basis of Consolidation

Use of Estimates

Use of Estimates

The Company makes critical estimates and assumptions in valuing: stock-based awards, intangible assets and the related goodwill impairment test. Actual results could differ from those estimates.

Prior Period Reclassifications

Prior Period Reclassifications

Concentration of Credit Risk

Concentration of Credit Risk

Revenue Recognition

Revenue Recognition

Licensing Revenue

Licensing Revenue

Intangible Assets and Intellectual Property

Intangible Assets and Intellectual Property

Intellectual Property

Capitalized Software Development Costs

Goodwill

Research and Development

Research and Development

Per Share Information

Per Share Information


	September 30, 2024		September 30, 2023

Series A preferred stock		1,148		1,148
Warrants		9,156,627		5,823,036
Options		5,203,088		1,612,542
Total		14,360,863		7,436,726

Stock Based Compensation

Stock Based Compensation

New Accounting Pronouncements

New Accounting Pronouncements

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

9 Months Ended

Sep. 30, 2024

Accounting Policies [Abstract]

Schedule of weighted average number of common stock equivalents


	September 30, 2024		September 30, 2023

Series A preferred stock		1,148		1,148
Warrants		9,156,627		5,823,036
Options		5,203,088		1,612,542
Total		14,360,863		7,436,726

INTANGIBLE ASSETS (Tables)

9 Months Ended

Sep. 30, 2024

Intellectual Property [Member]

Finite-Lived Intangible Assets [Line Items]

Schedule of capitalized development cost


Intellectual Property	September 30, 2024			December 31, 2023
Beginning Balance	$	4,428		$	311
Acquisition of intangible assets		–			4,400
Amortization expenses		(764	)		(283	)
Ending Balance	$	3,664		$	4,428

Capitalized Development Costs [Member]

Finite-Lived Intangible Assets [Line Items]

Schedule of capitalized development cost


	September 30, 2024			December 31, 2023
Beginning Balance	$	1,147		$	4,921
Additions		557			–
Impairment		–			(3,072	)
Amortization expenses		(275	)		(702	)
Ending Balance	$	1,429		$	1,147

ACCRUED LIABILITIES (Tables)

9 Months Ended

Sep. 30, 2024

Payables and Accruals [Abstract]

Schedule of accrued liabilities

Schedule of accrued liabilities
	September 30, 2024		December 31, 2023
Accrued payroll	$	241	$	189
Anti-dilution provision		72		72
Payables due to related party		1,200		1,500
Other		178		197
Total accrued liabilities	$	1,691	$	1,958

STOCKHOLDERS’ EQUITY (Tables)

9 Months Ended

Sep. 30, 2024

Equity [Abstract]

Schedule of option activity

Schedule of option activity
	Number of shares			Weighted Average exercise price		Weighted Average remaining years
Outstanding December 31, 2023		2,725,564		$	1.84		4.07
Issued		3,509,750			1.15
Exercised		–			–
Cancelled		(1,032,226	)		2.25
Outstanding as of September 30, 2024		5,203,088		$	1.30		7.25
Outstanding as of September 30, 2024, vested		1,740,591		$	1.23		7.87

Schedule of fair value assumptions

Schedule of fair value assumptions
Market value of common stock on issuance date			$0.72 - $3.12
Exercise price			$0.70 - $3.12
Expected volatility			102% - 144%
Expected term (in years)			1.0 - 10.0
Risk-free interest rate			3.58% - 5.00%
Expected dividend yields			–

Schedule of warrant activity

Schedule of warrant activity
	Number of shares			Weighted Average exercise price			Weighted Average remaining years
Outstanding December 31, 2023		7,489,960		$	3.52			3.83
Cancelled		–			–
Exercised		(2,416,667	)	$	(0.70	)
Issued		4,083,334		$	0.78
Outstanding as of September 30, 2024		9,156,627		$	2.67			3.68

ORGANIZATION AND DESCRIPTION OF BUSINESS (Details Narrative) - Alliance Partners LLC [Member] - USD ($)	Oct. 13, 2023	Sep. 30, 2024
Restructuring Cost and Reserve [Line Items]
Remaining outstanding payable		$ 1,200,000
Membership Interest Purchase Agreement [Member]
Restructuring Cost and Reserve [Line Items]
Total consideration	$ 2,000,000.0

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details - Antidilutive shares) - shares	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive shares	14,360,863	7,436,726
Series A Preferred Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive shares	1,148	1,148
Warrant [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive shares	9,156,627	5,823,036
Options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive shares	5,203,088	1,612,542

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023
Product Information [Line Items]
Research and development expense	$ 2,000	$ 751,000	$ 1,278,000	$ 2,774,000
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount			14,360,863	7,436,726
Accounts Receivable [Member] \| Customer Concentration Risk [Member] \| Four Customers [Member]
Product Information [Line Items]
Concentration risk, percentage			94.00%
Accounts Receivable [Member] \| Customer Concentration Risk [Member] \| Customer One [Member]
Product Information [Line Items]
Concentration risk, percentage			41.00%
Accounts Receivable [Member] \| Customer Concentration Risk [Member] \| Customer Two [Member]
Product Information [Line Items]
Concentration risk, percentage			23.00%
Accounts Receivable [Member] \| Customer Concentration Risk [Member] \| Customer Three [Member]
Product Information [Line Items]
Concentration risk, percentage			19.00%
Accounts Receivable [Member] \| Customer Concentration Risk [Member] \| Customer Four [Member]
Product Information [Line Items]
Concentration risk, percentage			11.00%
Accounts Receivable [Member] \| Customer Concentration Risk [Member] \| Two Customers [Member]
Product Information [Line Items]
Concentration risk, percentage					80.00%
Revenue Benchmark [Member] \| Customer Concentration Risk [Member] \| Customer One [Member]
Product Information [Line Items]
Concentration risk, percentage			42.00%	61.00%
Revenue Benchmark [Member] \| Customer Concentration Risk [Member] \| Customer Two [Member]
Product Information [Line Items]
Concentration risk, percentage			21.00%	20.00%
Revenue Benchmark [Member] \| Customer Concentration Risk [Member] \| Customer Three [Member]
Product Information [Line Items]
Concentration risk, percentage			14.00%
Revenue Benchmark [Member] \| Customer Concentration Risk [Member] \| Customers One Two And Three [Member]
Product Information [Line Items]
Concentration risk, percentage			77.00%

INTANGIBLE ASSETS (Details - Intellectual property) - USD ($) $ in Thousands	9 Months Ended		12 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023
Finite-Lived Intangible Assets [Line Items]
Amortization expenses	$ (1,039)	$ (712)
Intellectual Property [Member]
Finite-Lived Intangible Assets [Line Items]
Beginning balance	4,428	$ 311	$ 311
Acquisition of intangible assets	0		4,400
Amortization expenses	(764)		(283)
Ending balance	$ 3,664		$ 4,428

INTANGIBLE ASSETS (Details - Capitalized development cost) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023
Finite-Lived Intangible Assets [Line Items]
Additions			$ 557
Impairment	$ 0	$ 0	0	$ 6,131
Amortization expenses			(1,039)	(712)
Capitalized Development Cost [Member]
Finite-Lived Intangible Assets [Line Items]
Beginning balance			1,147	$ 4,921	$ 4,921
Additions			557		0
Impairment			0		(3,072)
Amortization expenses			(275)		(702)
Ending balance	$ 1,429		$ 1,429		$ 1,147

INTANGIBLE ASSETS (Details Narrative) - USD ($)	9 Months Ended
INTANGIBLE ASSETS (Details Narrative) - USD ($)	Sep. 30, 2024	Dec. 31, 2023	Oct. 26, 2023	Dec. 31, 2022
Finite-Lived Intangible Assets [Line Items]
Capitalized software development cost	$ 557,000
Goodwill	1,161,000	$ 1,161,000
Fin Zeo [Member]
Finite-Lived Intangible Assets [Line Items]
Gross value of acquired intangible assets			$ 4,400,000
Alliance Partners LLC [Member]
Finite-Lived Intangible Assets [Line Items]
Goodwill	1,200,000
Patents [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	407,000	407,000
Cumulative amortization	334,000	232,000
Intellectual Property [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	3,664,000	4,428,000		$ 311,000
Cumulative amortization	809,000	147,000
Estimated aggregate amortization for each of five fiscal years	882,000
Capitalized Development Costs [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	2,100,000
Cumulative amortization	695,000	$ 419,000
Finite-Lived Intangible Asset, Expected Amortization, Year Four	$ 480,000

ACCRUED LIABILITIES (Details - Due to related parties) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Total accrued liabilities	$ 1,691	$ 1,958
Accrued Payroll [Member]
Total accrued liabilities	241	189
Antidilution Provision [Member]
Total accrued liabilities	72	72
Payables Due To Related Party [Member]
Total accrued liabilities	1,200	1,500
Other Accrued Liabilities [Member]
Total accrued liabilities	$ 178	$ 197

ACCRUED LIABILITIES (Details Narrative) - USD ($)	Sep. 30, 2024	Dec. 31, 2023
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Accounts Payable, Current	$ 2,484,000	$ 1,680,000
Fin Zeo [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Accounts Payable, Current	$ 1,200,000
Infinios [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Shares to be issued to Infinios	39,706
Shares to be issued to Infinios, value	$ 72,000

NOTES PAYABLE (Details Narrative) - USD ($)				9 Months Ended
NOTES PAYABLE (Details Narrative) - USD ($)	Jul. 10, 2024	Jun. 10, 2024	Dec. 31, 2020	Sep. 30, 2024	Sep. 30, 2023	Aug. 29, 2024	Aug. 12, 2024	Dec. 31, 2023
Short-Term Debt [Line Items]
Proceeds from notes payable				$ 200,000	$ 0
Interest Payable				15,000
Accrued interest paid							$ 230,000
Outstanding balance convertible note payable				1,100,000
Discount on debenture				428,000				$ 0
[custom:AllocationOfEquity-0]				68,000
Amortization				124,000
Related To Debt Component [Member]
Short-Term Debt [Line Items]
Discount on debenture				552,000
Remaining Unamortized Discount Balance [Member]
Short-Term Debt [Line Items]
Discount on debenture				428,000
Peak One Warrant [Member]
Short-Term Debt [Line Items]
Number of shares issued						521,739
Armistice Capital Master Fund Ltd [Member]
Short-Term Debt [Line Items]
Conversion price	$ 0.70
Share Price	$ 0.70
Fair Value Adjustment of Warrants	$ 15,000
Convertible Note [Member]
Short-Term Debt [Line Items]
Interest rate	6.00%
Conversion price	$ 1.07
Net proceeds from the private placement offering	$ 910,000
Non-accountable fee	20,000
Payment for fees	$ 70,000
Convertible debt, description	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 a fair value of $0.96 per share.
Private Placement [Member] \| Convertible Note [Member]
Short-Term Debt [Line Items]
Principal amount	$ 1,100,000
Interest rate	6.00%
Number of share warrant purchase	750,000
Debenture sold to investor	$ 1,000,000
Original issue discount	10.00%
Conversion price	$ 1.16
Fair value of warrants price per share	$ 0.85
All Notes Payable [Member]
Short-Term Debt [Line Items]
Interest Payable				0				0
Note payable				$ 63,000				$ 66,000
US Small Business Administration [Member] \| Unsecured Note Payable 30 Year [Member]
Short-Term Debt [Line Items]
Principal amount			$ 68,000
Debt stated interest rate			3.75%
Debt annual periodic payment			$ 4,000
Debt maturity date			Jul. 01, 2050
Black Ice Advisors LLC [Member] \| Unsecured Note Payable 60 Day [Member]
Short-Term Debt [Line Items]
Debt maturity date		Aug. 10, 2024
Proceeds from notes payable		$ 200,000
Interest Payable		24,000
Notes payable		$ 224,000
Black Ice Advisors LLC [Member] \| Unsecured Note Payable 60 Day [Member] \| Rule 144 Restricted App Tech Common Stock [Member]
Short-Term Debt [Line Items]
Stock issued shares, other		30,000

RIGHT OF USE ASSET (Details Narrative) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Oct. 31, 2023
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Rent expense	$ 56	$ 55
Lease Agreement [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Lease term			20 months

COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($)	1 Months Ended	9 Months Ended	12 Months Ended
	Jun. 30, 2023	Sep. 30, 2024	Dec. 31, 2022	Dec. 31, 2021
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Commitment description		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.
Infinios Capitalized Software Development [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Asset impairment charge	$ 6,100,000
Infinios Financial Services [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Payment of engagement fee			$ 1,800,000	$ 1,800,000
Stock issued new, shares			2,347,905	2,347,905

STOCKHOLDERS' EQUITY (Details - Option activity) - Equity Option [Member] - $ / shares	9 Months Ended	12 Months Ended
	Sep. 30, 2024	Dec. 31, 2023
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Options outstanding, Beginning balance	2,725,564
Weighted average exercise price, Beginning	$ 1.84
Weighted average remaining years	7 years 3 months	4 years 25 days
Options Issued	3,509,750
Weighted average exercise price, Issued	$ 1.15
Options Exercised	0
Weighted average exercise price, Exercised	$ 0
Options Cancelled	(1,032,226)
Weighted average exercise price, Cancelled	$ 2.25
Options outstanding, Ending balance	5,203,088	2,725,564
Weighted average exercise price, Ending	$ 1.30	$ 1.84
Options Vested	1,740,591
Weighted average exercise price, Vested	$ 1.23
Weighted average remaining years, Vested	7 years 10 months 13 days

STOCKHOLDERS' EQUITY (Details - Assumptions) - Stock Options [Member]	9 Months Ended
	Sep. 30, 2024
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Market value of common stock on issuance date	$0.72 - $3.12
Exercise price	$0.70 - $3.12
Expected volatility, minimum	102.00%
Expected volatility, maximum	144.00%
Expected term (in years)	1.0 - 10.0
Risk-free interest rate, minimum	3.58%
Risk-free interest rate, maximum	5.00%
Expected dividend yields	0.00%

STOCKHOLDERS' EQUITY (Details - Warrant activity - Warrants [Member] - $ / shares	9 Months Ended	12 Months Ended
	Sep. 30, 2024	Dec. 31, 2023
Offsetting Assets [Line Items]
Number of shares, Outstanding at beginning	7,489,960
Weighted average exercise price, Outstanding at beginning	$ 3.52
Weighted average remaining years	3 years 8 months 4 days	3 years 9 months 29 days
Number of shares, Cancelled	0
Weighted average exercise price, Cancelled	$ 0
Number of shares, Exercised	(2,416,667)
Weighted average exercise price, Exercised	$ (0.70)
Number of shares, Issued	4,083,334
Weighted average exercise price, Issued	$ 0.78
Number of shares, Outstanding at ending	9,156,627	7,489,960
Weighted average exercise price, Outstanding at ending	$ 2.67	$ 3.52

STOCKHOLDERS’ EQUITY (Details Narrative) - USD ($)								1 Months Ended		3 Months Ended				9 Months Ended
STOCKHOLDERS’ EQUITY (Details Narrative) - USD ($)	Sep. 27, 2024	Aug. 30, 2024	Jul. 03, 2024	Apr. 04, 2024	Mar. 26, 2024	Oct. 31, 2023	Oct. 26, 2023	Aug. 31, 2023	Feb. 28, 2023	Sep. 30, 2024	Mar. 31, 2024	Sep. 30, 2023	Mar. 31, 2023	Sep. 30, 2024	Sep. 30, 2023	Aug. 12, 2024	Jun. 30, 2024	May 31, 2024	Dec. 31, 2023	May 31, 2023
Class of Stock [Line Items]
Preferred stock, shares authorized										100,000				100,000					100,000
Preferred stock, par value										$ 0.001				$ 0.001					$ 0.001
Preferred stock, shares issued										14				14					14
Preferred stock, shares outstanding										14				14					14
Common stock, shares authorized										105,263,158				105,263,158					105,263,158
Common stock, par value										$ 0.001				$ 0.001					$ 0.001
Common stock, shares outstanding										27,478,328				27,478,328					22,251,742
Adjustment to APIC for warrants										$ 2,200,000
Proceeds from sale of common stock														$ 2,438,000	$ 5,157,000
Debt instrument unamortized discount										428,000				428,000					$ 0
Interest expense										$ 18,000		$ 4,000		53,000	$ 48,000
Accrued interest paid																$ 230,000
Stock option plan expense														$ 325,000
Options granted, shares														3,509,750
Option expense														$ 885,000
Stock issued new, value											$ 2,438,000		$ 4,490,000
Sale of stock description transaction	the Company filed a registration statement on Form S-1 with the Securities and Exchange Commission (the “SEC”), which relates to the resale by Armistice Capital Master Fund Ltd. (the “Selling Stockholder”) of up to 5,000,001 shares of common stock, par value $0.001 per share (the “Common Stock”), of AppTech Payments Corp. (the “Company”). The shares consist of (i) up to 1,666,667 shares issuable upon exercise of warrants at an exercise price of $0.70 per share, issued on February 2, 2023 (the “February 2023 Warrants”), and (ii) up to 3,333,334 shares issuable upon exercise of warrants at an exercise price of $0.70 per share, issued on August 30, 2024 (the “New Warrants”).
Warrants [Member]
Class of Stock [Line Items]
Class of Warrant or Right, Outstanding										9,156,627				9,156,627					7,489,960
Fair value of new warrants										$ 2.67				$ 2.67					$ 3.52
Sales Milestones [Member]
Class of Stock [Line Items]
Options unvested										3,500,000				3,500,000
Equity Option [Member]
Class of Stock [Line Items]
Option exercise price										$ 1.30				$ 1.30					$ 1.84
Options, fair value per share														$ 1.23
Shares granted														3,509,750
Share-basic compensation amount remaining to be recognized										$ 0				$ 0
Consultant [Member]
Class of Stock [Line Items]
Options granted, shares														1,000,000
Option exercise price										$ 1.58				$ 1.58
Options, fair value per share														$ 0.64
Current Employees And Consultants [Member]
Class of Stock [Line Items]
Option exercise price				$ 0.95
Shares granted				406,000
Fair value granted, per share				$ 0.86
Share-based payment				$ 349,000
Board Of Directors And Consultants [Member]
Class of Stock [Line Items]
Shares granted														141,250
Board Of Directors And Consultants [Member] \| Minimum [Member]
Class of Stock [Line Items]
Option exercise price										1.70				$ 1.70
Fair value granted, per share														0.76
Board Of Directors And Consultants [Member] \| Maximum [Member]
Class of Stock [Line Items]
Option exercise price										$ 2.165				2.165
Fair value granted, per share														$ 1.53
Employees And Consultants [Member]
Class of Stock [Line Items]
Option exercise price			$ 0.97
Options, fair value per share			$ 0.87
Shares granted			1,500,000
Company Wide Grant [Member] \| Equity Option [Member]
Class of Stock [Line Items]
Shares granted														406,000
Employee Severance [Member]
Class of Stock [Line Items]
Canceled options related to termination of former employee																	$ 1,000,000
Equity Incentive Plan [Member]
Class of Stock [Line Items]
Number of shares authorized										2,702,632				2,702,632				950,000		1,752,632
Number of shares available for issuance										451,864				451,864
Equity Plan [Member]
Class of Stock [Line Items]
Shares granted			510,000
Alliance Partners LLC [Member]
Class of Stock [Line Items]
Equity issued related to acquisition description														1) $150,000 due on or before July 11, 2024; 2) Remaining payments are deferred until either February 1, 2025, or until the Company generates $400,000 in monthly revenue from the FinZeo products (after cost of sales, excluding operating expenses). Once either condition is met, the payment schedule will resume with payments every 30 days, in amounts ranging from $75,000 to $375,000.
Note Payable [Member]
Class of Stock [Line Items]
Interest expense														$ 27,000
Shelf Registration Statement [Member]
Class of Stock [Line Items]
Remaining amount for shelf registration										$ 60,700,000				60,700,000
Modification Expense [Member]
Class of Stock [Line Items]
Option expense														325,000
Company Wide Grant [Member]
Class of Stock [Line Items]
Option expense														$ 349,000
Registered Direct Offering [Member]
Class of Stock [Line Items]
Proceeds from sale of equity									$ 5,000,000
Adjustment to APIC for warrants									$ 763,000
Securities Purchase Agreement [Member]
Class of Stock [Line Items]
Proceeds from sale of equity							$ 3,500,000
Warrant Inducement Agreement [Member] \| App Tech Payments [Member]
Class of Stock [Line Items]
Stock issued new, shares		1,666,667
Exercise price		$ 0.70
Stock issued new, value		$ 1,166,667
Net proceeds from warrants		$ 1,010,000
Additional shares		3,333,334
Fair value of new warrants		$ 0.67
Modification Agreement [Member]
Class of Stock [Line Items]
Exercise price									$ 4.64
Series A Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock conversion basis														Holders of Series A preferred stock have a right to convert each share of Series A into 82 shares of common stock.
Common Stock Shares [Member] \| Registered Direct Offering [Member]
Class of Stock [Line Items]
Stock issued new, shares									1,666,667
Warrants [Member] \| Registered Direct Offering [Member]
Class of Stock [Line Items]
Stock issued new, shares									1,666,667
Warrants [Member] \| Securities Purchase Agreement [Member]
Class of Stock [Line Items]
Stock issued new, shares						1,666,667
Common Stock [Member]
Class of Stock [Line Items]
Stock issued for services, shares														485,000	330,000
Stock issued for services, value														$ 467,000	$ 711,000
Shares issued										30,000				30,000
Debt instrument unamortized discount										$ 27,000				$ 27,000
Stock issued related to acquisition, shares														55,000
Common Stock [Member] \| Chris Leyva [Member]
Class of Stock [Line Items]
Stock issued related to acquisition, shares														15,000
Common Stock [Member] \| ATM Offering [Member]
Class of Stock [Line Items]
Stock issued new, shares								898,780
Proceeds from sale of common stock								$ 2,100,000
Common Stock [Member] \| Securities Purchase Agreement [Member]
Class of Stock [Line Items]
Stock issued new, shares						1,666,667
Common Stock [Member] \| Underwriting Agreement [Member]
Class of Stock [Line Items]
Stock issued new, shares					2,000,000
Common Stock [Member] \| Underwriting Agreement [Member] \| Overallotment Shares [Member]
Class of Stock [Line Items]
Stock issued new, shares					300,000

AppTech Payments (NASDAQ:APCXW)
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