Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2023 | Nov. 14, 2023 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2023 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2023 | |
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 Ave. 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 | 20,690,942 | |
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 $4.15 | |
Trading Symbol | APCXW | |
Security Exchange Name | NASDAQ |
CONSOLIDATED BALANCE SHEETS (UN
CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Current assets | ||
Cash and cash equivalent | $ 251 | $ 3,462 |
Accounts receivable | 253 | 51 |
Prepaid expenses | 324 | 183 |
Prepaid license fees - current | 0 | 729 |
Total current assets | 828 | 4,425 |
Prepaid license fees - long term | 0 | 2,700 |
Intangible assets | 209 | 311 |
Note receivable | 26 | 26 |
Right of use asset | 82 | 127 |
Security deposit | 9 | 9 |
Capitalized software development and license (net of accumulated amortization) | 1,289 | 4,921 |
TOTAL ASSETS | 2,443 | 12,519 |
Current liabilities | ||
Accounts payable | 552 | 347 |
Accrued liabilities | 340 | 1,870 |
Right of use liability | 78 | 64 |
Stock repurchase liability | 0 | 430 |
Convertible notes payable, net of $0 and $4 thousand debt discount | 0 | 676 |
Notes payable | 1 | 1,021 |
Notes payable related parties | 0 | 88 |
Deferred revenue | 557 | 0 |
Derivative liabilities | 0 | 433 |
Total current liabilities | 1,528 | 4,929 |
Long-term liabilities | ||
Right of use liability | 32 | 99 |
Notes payable, net of current portion | 67 | 67 |
Total long-term liabilities | 99 | 166 |
TOTAL LIABILITIES | 1,627 | 5,095 |
Commitments and contingencies (Note 8) | ||
Stockholders’ Equity | ||
Series A preferred stock; $0.001 par value; 10,526 shares authorized; 14 shares issued and outstanding on September 30, 2023 and December 31, 2022 | 0 | 0 |
Common stock, $0.001 par value; 105,263,158 shares authorized; 19,020,008 and 16,697,280 issued and outstanding at September 30, 2023 and December 31, 2022, respectively | 19 | 17 |
Additional paid-in capital | 157,159 | 147,881 |
Accumulated deficit | (156,362) | (140,474) |
Total stockholders’ equity | 816 | 7,424 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ 2,443 | $ 12,519 |
CONSOLIDATED BALANCE SHEETS (_2
CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Debt discount | $ 0 | $ 4 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,526 | 10,526 |
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 | 19,020,008 | 16,697,280 |
Common stock, shares outstanding | 19,020,008 | 16,697,280 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Income Statement [Abstract] | ||||
Revenues | $ 140 | $ 115 | $ 363 | $ 342 |
Cost of revenues | 44 | 54 | 159 | 167 |
Gross profit | 96 | 61 | 204 | 175 |
Operating expenses: | ||||
General and administrative, including stock based compensation of $958 thousand and $188 thousand for the three months ended, $2,002 thousand and $1,130 thousand for the nine months ended September 30, 2023 and 2022, respectively | 2,227 | 1,365 | 7,114 | 5,466 |
Research and development, including stock based compensation of $327 thousand and $1,262 thousand for the three months ended, $956 thousand and $4,922 thousand for the nine months ended September 30, 2023 and 2022, respectively | 751 | 1,513 | 2,774 | 5,539 |
Impairment of Intangible assets | 0 | 0 | 6,131 | 0 |
Excess fair value of equity issuance over assets received | 0 | 0 | 0 | 904 |
Total operating expenses | 2,978 | 2,878 | 16,019 | 11,909 |
Loss from operations | (2,882) | (2,817) | (15,815) | (11,734) |
Other income (expenses) | ||||
Interest income (expense) | (4) | (41) | (48) | (137) |
Change in fair value of derivative liability | 0 | 8 | 27 | 181 |
Other income (expenses) | (5) | 1 | 711 | 169 |
Total other income (expenses) | (9) | (32) | 690 | 213 |
Loss before provision for income taxes | (2,891) | (2,849) | (15,125) | (11,521) |
Provision for income taxes | 0 | 0 | 0 | 0 |
Net loss attributable to AppTech common shareholders | (2,891) | (2,849) | (15,125) | (11,521) |
Deemed dividend related to warrant resets | 0 | 0 | (763) | 0 |
Net loss | $ (2,891) | $ (2,849) | $ (15,888) | $ (11,521) |
CONSOLIDATED STATEMENTS OF OP_2
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Share-Based Payment Arrangement, Noncash Expense | $ 2,958 | $ 6,052 | ||
Basic net loss per common share | $ (0.15) | $ (0.17) | $ (0.86) | $ (0.72) |
Diluted net loss per common share | $ (0.15) | $ (0.17) | $ (0.86) | $ (0.72) |
Weighted-average number of shares used basic per share amounts | 18,801,754 | 16,596,333 | 18,402,919 | 16,106,528 |
Weighted-average number of shares used diluted per share amounts | 18,801,754 | 16,596,333 | 18,402,919 | 16,106,528 |
General and Administrative Expense [Member] | ||||
Share-Based Payment Arrangement, Noncash Expense | $ 958 | $ 188 | $ 2,002 | $ 1,130 |
Research and Development Expense [Member] | ||||
Share-Based Payment Arrangement, Noncash Expense | $ 327 | $ 1,262 | $ 956 | $ 4,922 |
CONSOLIDATED STATEMENTS OF STOC
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, 2021 | $ 0 | $ 12 | $ 124,225 | $ (124,193) | $ 44 |
Beginning balance, shares at Dec. 31, 2021 | 14 | 11,944,600 | |||
Net loss | (5,070) | (5,070) | |||
Common stock issued for forbearance | 3 | 3 | |||
Common stock issued for forbearance, shares | 2,104 | ||||
Stock based compensation | 2,732 | 2,732 | |||
Stock based compensation, shares | 310,223 | ||||
Common stock cancelled | |||||
Common stock cancelled, shares | (126,315) | ||||
Net proceeds from sale of offering shares | $ 4 | 13,391 | 13,395 | ||
Net proceeds from sale of offering, shares | 3,614,458 | ||||
Ending balance, value at Mar. 31, 2022 | $ 0 | $ 16 | 140,351 | (129,263) | 11,104 |
Ending balance, shares at Mar. 31, 2022 | 14 | 15,745,070 | |||
Beginning balance, value at Dec. 31, 2021 | $ 0 | $ 12 | 124,225 | (124,193) | 44 |
Beginning balance, shares at Dec. 31, 2021 | 14 | 11,944,600 | |||
Net loss | (11,521) | ||||
Ending balance, value at Sep. 30, 2022 | $ 0 | $ 16 | 146,471 | (135,714) | 10,773 |
Ending balance, shares at Sep. 30, 2022 | 14 | 16,633,563 | |||
Beginning balance, value at Mar. 31, 2022 | $ 0 | $ 16 | 140,351 | (129,263) | 11,104 |
Beginning balance, shares at Mar. 31, 2022 | 14 | 15,745,070 | |||
Net loss | (3,602) | (3,602) | |||
Stock based compensation | 2,120 | 2,120 | |||
Stock based compensation, shares | 140,681 | ||||
Patent acquisition | 407 | 407 | |||
Patent acquisition, shares | 225,000 | ||||
Anti-dilution provision | 2,123 | 2,123 | |||
Anti-dilution provision, shares | 451,957 | ||||
Ending balance, value at Jun. 30, 2022 | $ 0 | $ 16 | 145,001 | (132,865) | 12,152 |
Ending balance, shares at Jun. 30, 2022 | 14 | 16,562,708 | |||
Net loss | (2,849) | (2,849) | |||
Stock based compensation | 1,450 | 1,450 | |||
Stock based compensation, shares | 28,750 | ||||
Option Exercise | 20 | 20 | |||
Option Exercise, shares | 42,105 | ||||
Ending balance, value at Sep. 30, 2022 | $ 0 | $ 16 | 146,471 | (135,714) | 10,773 |
Ending balance, shares at Sep. 30, 2022 | 14 | 16,633,563 | |||
Beginning balance, value at Dec. 31, 2022 | $ 0 | $ 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 | 860 | 860 | |||
Stock based compensation, shares | 28,750 | ||||
Issuance of shares for prepaid services | 234 | 234 | |||
Issuance of shares for prepaid services, shares | 150,000 | ||||
Net proceeds from sale of offering shares | $ 2 | 4,488 | 4,490 | ||
Net proceeds from sale of offering, shares | 1,666,667 | ||||
Retained earnings change due to warrants' repricing | 763 | (763) | |||
Ending balance, value at Mar. 31, 2023 | $ 0 | $ 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 | $ 0 | $ 17 | 147,881 | (140,474) | 7,424 |
Beginning balance, shares at Dec. 31, 2022 | 14 | 16,697,280 | |||
Net loss | $ (15,125) | ||||
Option Exercise, shares | 10,528 | ||||
Ending balance, value at Sep. 30, 2023 | $ 0 | $ 19 | 157,159 | (156,362) | $ 816 |
Ending balance, shares at Sep. 30, 2023 | 14 | 19,020,008 | |||
Beginning balance, value at Mar. 31, 2023 | $ 0 | $ 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 | $ 0 | $ 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 shares for prepaid services | 153 | 153 | |||
Issuance of shares 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 | $ 0 | $ 19 | $ 157,159 | $ (156,362) | $ 816 |
Ending balance, shares at Sep. 30, 2023 | 14 | 19,020,008 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (15,125) | $ (11,521) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Stock based compensation | 2,958 | 6,052 |
Common stock issued for forbearance | 0 | 3 |
Cancellation of stock repurchase liabilities | (430) | 0 |
Stock issued for excess fair value of equity over assets received | 0 | 904 |
Amortization of debt discount | 4 | 49 |
Amortization of intangible assets and software | 712 | 0 |
Impairment of intangible assets and software | 6,131 | 0 |
Gain on settlement of convertible note, warrants, and derivative liabilities | (250) | 0 |
Change in fair value of derivative liabilities | (27) | (181) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (202) | (58) |
Prepaid expenses | 614 | 66 |
Accounts payable | 205 | (872) |
Accrued liabilities | (1,685) | (190) |
Deferred revenue | 557 | 0 |
Right of use asset and liability, net | (7) | 1 |
Net cash used in operating activities | (6,545) | (5,747) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Capitalized prepaid software development and license | (50) | (1,748) |
Net cash used in investing activities | (50) | (1,748) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Payments on loans payable - related parties | (88) | 0 |
Repayments on notes payable | (1,021) | (50) |
Repayment of convertible note payable | (679) | 0 |
Net proceeds from public offering | 5,157 | 13,395 |
Proceeds received from exercise of stock options | 15 | 20 |
Net cash provided by financing activities | 3,384 | 13,365 |
Changes in cash and cash equivalents | (3,211) | 5,870 |
Cash, cash equivalents, beginning of period | 3,462 | 8 |
Cash, cash equivalents, end of period | 251 | 5,878 |
Supplemental disclosures of cash flow information: | ||
Cash paid for interest | 1,233 | 0 |
Non-cash investing and financing transactions | ||
Issuance stock for acquisition of intangible assets | 0 | 407 |
Cancellation of stock repurchase liabilities | 430 | 0 |
Issuance of stock for prepaid services | $ 0 | $ 250 |
ORGANIZATION AND DESCRIPTION OF
ORGANIZATION AND DESCRIPTION OF BUSINESS | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND DESCRIPTION OF BUSINESS | 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 is developing an embedded, highly secure digital payments and banking platform that powers 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. In 2017, the Company acquired assets from GlobalTel Media, Inc. The assets included patented, enterprise-grade software for advanced text messaging, four patents in text technology, and additional intellectual property for mobile payments. In 2020, AppTech entered into a strategic partnership with Infinios (formerly “NEC Payments”), to extend its product offering to include flexible, scalable, and secure payment acceptance and issuer payment processing that supports the digitization of business and consumer financial services and the migration of cash and other legacy payment types to contactless card and real time payment transactions. This partnership has since been terminated. In 2021, the Company announced its intent to launch an innovative and patented mobile text payment solution in addition to a suite of digital banking and payment acceptance products designed in the Business-to-Business (“B2B”) and Business-to-Consumer (“B2C”) payment and software space. On December 23, 2021, AppTech re-domiciled to Delaware and changed its name from “AppTech Corp.” to “AppTech Payments Corp.” AppTech stock trades under the symbol “APCX” and its warrants trade under the symbol “APCXW,” on the Nasdaq Capital Market ("NASDAQ"). The Company successfully completed its capital raise and uplisting onto NASDAQ (herein referred to as its “Offering”) on January 7, 2022. As part of the Offering, the Company executed a 9.5 to 1 3,614,458 one share of common stock and a warrant to purchase one share of common stock 4.15 542,168 3,614,458 13.4 In April 2022, the Company acquired HotHand Inc. (“HotHand”), a patent-holding company. These patents are focused on the delivery, purchase, or request of any products or services within specific geolocation and time parameters, provided by a consumer’s cell phone anywhere in the United States, and protect all mobile phone advertising, including in a store’s mobile application. In September 2022, the Company expanded its operations to Austin, Texas by establishing AppTech Holdings LLC. The goal of this expansion is primarily to pursue licensing revenue. In February 2023, the Company completed an underwritten public offering of its common stock and warrants, raising gross proceeds of approximately $ 5 66.5 In June 2023, the Company entered into licensing agreements with InstaCash and PayToMe.co. In August 2023, the Company entered into a sales agreement under which the Company may offer and 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. During the nine months ended September 30, 2023, the Company sold 229,283 667 Management's Plan The Company continues to have yearly losses from its limited revenues from operations. Management believes the present cash flows will not enable it to meet its commitments for twelve months from the date of filing. However, Management has an open S-3 filed with the SEC and it intends to obtain the necessary funding for the Company to meet its obligations for the twelve-month period from the date the financial statements are issued. The Company anticipates raising additional capital in the fourth quarter of 2023 to further fund operations. Based on the Company’s current operating plan, working capital levels, financial projections, and planned capital raise in the fourth quarter, Management anticipates that the Company will be able to meet its financial obligations for the next twelve months. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 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, 2023 and September 30, 2022. 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, 2022, filed with the SEC on March 20, 2023. The interim results for the three and nine months ended September 30, 2023 are not necessarily indicative of the results to be expected for the year ended December 31, 2023 or for any future interim periods. Basis of Consolidation The consolidated unaudited financial statements include the accounts of AppTech Payments Corp., and wholly owned subsidiary 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. Significant estimates include the estimated liabilities related to various vendors in which communications have ceased, contingent liabilities, and valuation of the derivative liabilities. Actual results could differ from those estimates. 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 (“FDIC”) 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. 93 73 12 For the three months of September 30, 2023, two customers represented a significant amount of total revenue, at 40 52 68 For the nine months of September 30, 2023 and September 30, 2022, two customers represented a significant amount of total revenue, at 61 20 69 11 Software Development Costs The Company capitalizes certain costs related to the development of its digital banking platform. Costs incurred during the development phase are capitalized only when we believe it is probable the development will result in new or additional functionality. The types of costs capitalized during the development phase include employee compensation and consulting fees for third party developers working on these projects. Costs related to the preliminary project planning phase and post implementation phase are expensed as incurred. The digital banking platform is amortized on a straight line basis over the estimated useful life of the asset. 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 customers are recorded as a reduction to revenues. Licensing Revenue The Company is actively pursuing strategic partnership agreements that licenses its 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. Fair Value Measurements The Company follows FASB ASC 820, Fair Value Measurements and Disclosures (“ASC 820”) to measure and disclose the fair value of its financial instruments. ASC 820 establishes a framework for measuring fair value in U.S. GAAP and expands disclosures about fair value measurements and establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The three levels of fair value hierarchy defined by ASC 820 are described below: Level 1 Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. Level 2 Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 3 Pricing inputs that are generally unobservable inputs and not corroborated by market data. Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument. The carrying amounts reported in the Company’s financial statements for cash, accounts payable and accrued expenses approximate their fair value because of the immediate or short-term maturity of these financial instruments. Transactions involving related parties cannot be presumed to be carried out on an arms-length basis, as the requisite conditions of competitive, free-marketing dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm’s-length transactions unless such representations can be substantiated. As of September 30, 2023, the carrying value of the Company's financial instruments approximate their fair value. The following table presents financial instruments that are measured and recognized at fair value as of December 31, 2022 on recurring basis (in thousands): Schedule of fair value measurements December 31, 2022 Level 1 Level 2 Level 3 Total Carrying Derivative liabilities $ – $ – $ 433 $ 433 See Note 6 for discussion of valuation and roll forward related to derivative liabilities. Intangible Assets and Patents Our intangible assets only consist of patents. We amortize the patents on a straight-line basis from 3 years to 15 years 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 the SMS short code texting platform, contract and other outside services. Total R&D costs for the nine months ended September 30, 2023 and 2022 was approximately $ 2.8 5.5 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, convertible debt and convertible preferred stock. The number of common stock equivalents not included in diluted income per share was 8,118,273 5,999,940 Schedule of anti-dilutive shares Nine Months Ended September 30, 2023 September 30, 2022 Series A preferred stock 1,149 1,149 Convertible debt – 174,060 Warrants 5,823,036 4,275,464 Options 1,612,542 1,039,868 Restricted stock units 681,546 509,399 Total 8,118,273 5,999,940 Derivative Liability The Company issued debts that consist of the issuance of convertible notes with variable conversion provisions. In addition, the Company issued warrants with variable anti-dilution provisions. The conversion terms of the convertible notes and warrants are variable based on certain factors, such as the future price of the Company’s common stock. The number of shares of common stock to be issued is based on the future price of the Company’s common stock. The number of shares of common stock issuable upon conversion of the promissory note is indeterminate. Pursuant to ASC 815-15 Embedded Derivatives, the fair values of the variable conversion option and warrants and shares to be issued were recorded as derivative liabilities on the issuance date and at each reporting period. 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 estimated fair values. Fair value is generally determined based on the closing price of the Company’s common stock on the date of grant and is recognized over the service period. The Company has several consulting agreements that have share based payment awards based on performance. These agreements typically require the Company to issue common stock to the consultants on a monthly basis. The Company records the fair market value of the common stock issuable at each month end when the performance is complete based upon the closing market price of the Company’s common stock. 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. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | NOTE 3 – INTANGIBLE ASSETS Capitalized Development Cost and Prepaid Licenses The Company capitalizes certain costs related to the development of its digital payment and banking platform. Costs incurred during the development phase are capitalized only when we believe it is probable the development will result in new or additional functionality. The types of costs capitalized during the development phase include employee compensation and consulting fees for third party developers working on these projects. Costs related to the preliminary project planning phase and post implementation phase are expensed as incurred. The capitalized development costs are amortized on a straight line basis over the estimated useful life of the asset. The Company has capitalized approximately $ 5.2 0.9 1.8 During the nine months ended September 30, 2023, the Company wrote-off approximately $ 6.1 Patents In April 2022, the Company fully executed a Definitive Agreement to acquire HotHand Inc. (“HotHand”), a patent-holding company. HotHand did not have any operations, so the transaction was an asset acquisition of its portfolio of thirteen patents including USPTO 7,693,752; USPTO 8,554,632; USPTO 8,799,102; USPTO 9,436,956; USPTO 10,102,556; USPTO 10,127,592; USPTO 10,600,094; USPTO 10,621,639; USPTO 10,846,726; USPTO 10,846,727; USPTO 10,909,593; USPTO 11,107,140; USPTO 11,345,715. These patents are focused on the delivery, purchase, or request of any products or services within specific geolocation and time parameters, provided by a consumer’s cell phone anywhere in the United States. Additionally, HotHand’s family of patents includes a patent that protects advertising on a store’s mobile application when the cell phone is in the store and the ads shown are being triggered by geolocation tagging. AppTech is currently integrating the HotHand Intellectual Property (“IP”) into an elite digital platform. In addition to offering an embedded, highly secure, and patent-backed product, AppTech will offer licensing agreements for its IP. HotHand was acquired for 225,000 Schedule of patents as an intangible assets September 30, 2023 Balance as of December 31, 2021 $ – Acquisition of patents 407 Amortization of patents (96 ) Balance as of December 31, 2022 311 Acquisition of patents – Amortization of patents (102 ) Balance as of September 30, 2023 $ 209 |
ACCRUED LIABILITIES
ACCRUED LIABILITIES | 9 Months Ended |
Sep. 30, 2023 | |
Other Liabilities Disclosure [Abstract] | |
ACCRUED LIABILITIES | NOTE 4 – ACCRUED LIABILITIES Accrued liabilities as of September 30, 2023 and December 31, 2022 consist of the following (in thousands): Schedule of accrued liabilities September 30, 2023 December 31, 2022 Accrued interest – third parties $ – $ 1,436 Accrued payroll 213 311 Accrued residuals 22 31 Anti-dilution provision 72 72 Other 33 20 Total accrued liabilities $ 340 $ 1,870 Accrued Residuals The Company pays commissions to independent agents ("Channel Partners") which refer merchant accounts. The amounts payable to Channel Partners is based upon a percentage of the amounts processed on a monthly basis by these merchant accounts. Anti-dilution Provision The agreement between the Company and Infinios, formerly NEC Payments B.S.C., has an anti-dilution provision. To remain in compliance, the Company accrued 73,848 shares of its common stock at $17.46 per share for a total value of $1.3 million as of December 31, 2021. Further, in connection with the capital raise discussed in Note 1, the Company issued an additional 378,109 shares of its common stock at $2.20 per share for a value of $832 thousand or a total value of $2.1 million. The 451,957 total shares were issued in May 2022. The anti-dilution provision expired in January 2023. Further, i n connection with the shares to be issued as part of the HotHand acquisition, and to be in compliance with its anti-dilution provision with Infiinios, 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 have not been issued to Infinios as of |
NOTES PAYABLE AND CONVERTIBLE N
NOTES PAYABLE AND CONVERTIBLE NOTES PAYABLE | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE AND CONVERTIBLE NOTES PAYABLE | NOTE 5 – NOTES PAYABLE AND CONVERTIBLE NOTES PAYABLE The Company funded operations through cash flows generated from operations and the issuance of loans and notes payable. The following is a summary of loans and notes payable outstanding as of September 30, 2023 and December 31, 2022. Related parties noted below are either members of management, board of directors, significant shareholders or individuals in which have significant influence over the Company. Convertible Notes Payable In 2020, the Company entered into a securities agreement with an investor pursuant to which the Company agreed to sell to the investor a $300 thousand con er at any time into shares of the Company’s common stock at $9.50 for the one hundred and eighty (180) days immediately following the issue date and thereafter shall equal the lower of: 1) the lowest closing price of the common stock during the preceding twenty-five (25) trading day, ending on the last complete trading day prior to the issue date of the Note. 2) seventy-five (75) percent of the lowest trading price for the common stock during the twenty-five (25) consecutive trading days preceding the conversion date with a minimum trading volume of one thousand (1,000) shares. In the event of a default of the Note, the Holder, in its sole discretion may elect to use a conversion price equal to the lower of: 1) the lowest trading price of the common stock on the trading day immediately preceding the issue date or 2) seventy-five (75) percent of either the lowest trading price or the closing bid price, whichever is lower during any trading day in which the event of default has not been cured. The embedded conversion feature of this Note was deemed to require bifurcation and liability classification, at fair value. Pursuant to the securities agreement, the Company also sold warrants to the investors to purchase up to an aggregate of 21,052 shares of common stock exercisable at $14.25 and expire in five (5) years. The fair value of the derivative liability and warrants as of the date of issuance was in excess of the Note (see Note 6 for valuation) resulting in full discount of the Note. The conversion feature and warrants have various reset provisions for which lower the exercise price and share and warrants issuable. 0 280 0 119 See Note 6– Derivative Liabilities. In 2014, the Company issued $400 thousand in convertible notes payable. On March 30, 2022, the Company entered into forbearance agreements in exchange for not enforcing the terms of the original agreements. In November 2022, the parties agreed to extend the terms of the forbearance agreements for an additional six months. As of December 31, 2022, the balance of the convertible note was $400 thousand, the accrued interest related to the convertible notes was $278 thousand. In February 2023, the Company paid off the note and accrued interest in its entirety. Notes Payable In 2020, 68 68 $ 0 6 A significant shareholder funded the Company’s operations through notes payable primarily in 2009 and 2010. On May 2, 2021, the Company entered into a debt reduction and confirmation agreement with the significant shareholder that is no longer a related party. The Company entered into a forbearance agreement in exchange for not enforcing the terms of the agreement. In November 2022, the parties agreed to extend the terms of the forbearance agreement for an additional six months. As of December 31, 2022, the balance of the notes payable was $ 597 as $ 83 The Company entered into several notes payable with third parties. The Company entered into forbearance agreements in exchange for not enforcing the terms of the agreement. The interest rate on the note payable is 0% to 18% per annum. The expiration date of the agreement ranged from September 27, 2022 to October 4, 2022. In November 2022, the parties agreed to extend the terms of the forbearance agreement for an additional six months. As of December 31, 2022, the balance of the notes payable was $ 423 538 Note Payable - Related Party As of December 31, 2022, the balance of the related party notes payable was $ 88 68 |
DERIVATIVE LIABILITIES
DERIVATIVE LIABILITIES | 9 Months Ended |
Sep. 30, 2023 | |
Derivative Liabilities | |
DERIVATIVE LIABILITIES | NOTE 6– DERIVATIVE LIABILITIES The Company issued debts that consist of the issuance of convertible notes with variable conversion provisions. In addition, the Company issued warrants with variable conversion provisions. The conversion terms of the convertible notes and warrants are variable based on certain factors, such as the future price of the Company’s common stock. The number of shares of common stock to be issued is based on the future price of the Company’s common stock. The number of shares of common stock issuable upon conversion of the promissory note is indeterminate. Pursuant to ASC 815-15, the fair values of the variable conversion option and warrants were recorded as derivative liabilities on the issuance date and revalued for the nine months ended September 30, 2023 and December 31, 2022. There was no material change upon revaluing the derivative liability prior to extinguishment. At the end of September 30, 2023, the derivative liabilities were zero as the Company settled the convertible note and also extinguished its warrants related to its derivative liability as a result of the settlement. See Note 8. Based on the convertible notes described in Note 5, 390 27 166 Schedule of derivative liabilities Derivative Liability Derivative Total Balance as of December 31, 2022 $ 266 $ 167 $ 433 Change in fair value 1 (28 ) (27 ) Extinguishment of the derivative liability (267 ) (139 ) (406 ) Balance as of September 30, 2023 $ – $ – $ – During the nine months ended September 30, 2023, the fair value of the derivative liability convertible notes is estimated using a Monte Carlo pricing model with the following assumptions: Schedule of assumptions for derivatives Market value of common stock $ 1.49 Expected volatility 52.6% Expected term (in years) 0.25 Risk-free interest rate 4.42% During the nine months ended September 30, 2023, the fair value of the derivative liability – warrants is estimated using a Monte Carlo pricing model with the following assumptions: Market value of common stock $ 1.49 Expected volatility 71.1% Expected term (in years) 2.64 Risk-free interest rate 4.28% |
RIGHT OF USE ASSET
RIGHT OF USE ASSET | 9 Months Ended |
Sep. 30, 2023 | |
Right Of Use Asset | |
RIGHT OF USE ASSET | NOTE 7 - RIGHT OF USE ASSET Lease Agreement In January 2020, the Company entered into a lease agreement commencing February 8, 2020 for its current 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. The following are the expected lease payments as of September 30, 2023, including the total amount of related imputed interest (in thousands): Years ending December 31: Schedule of right of use asset 2023 $ 22 2024 90 2025 8 Operating Lease Total 120 Less: Imputed interest (10 ) Total $ 110 The rent expense was $ 55 $ 64 In September 2022, the Company opened a new office in Austin’s emerging tech hub to expand operations and foster growth. The total amount payable for one year lease under the lease agreement is $11 thousand. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 8 - COMMITMENTS AND CONTINGENCIES Litigation Convertible Note and Warrant Lawsuit On July 14, 2021, EMA Financial LLC, a Delaware limited liability company (“EMAF”), filed a complaint in the United States District Court for the Southern District of New York against the Company. In its complaint, EMAF alleged that AppTech breached the terms of a convertible note and a related warrant agreement purchased by EMAF pursuant to a securities purchase agreement between the parties. On September 2, 2021, EMAF filed a motion for summary judgment. AppTech filed a motion to dismiss EMAF’s complaint in its entirety. On September 13, 2022, the court denied AppTech’s motion to dismiss, and granted EMAF’s motion for summary judgment in part and denied in part. In particular, the court granted EMAF’s motion for summary judgment for its claim of breach of contract but denied its request for damages. On December 8, 2022, the United States District Court for the Southern District of New York entered an order denying AppTech’s motion to dismiss and granted EMAF’s motion for summary judgment and awarded damages to EMAF for $1.2 million. On December 15, 2022, AppTech appealed the judgment to the United States Court of Appeals for the Second Circuit. In January 2023, the Company secured a cash backed bond for $ 1.3 On, or about, April 23, 2023, EMAF and AppTech entered into a settlement and release agreement providing for, among other things, a settlement amount of $ 880 250 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 alleging Breach of Contract, Breach of Implied Covenant of Good Faith and Fair Dealing, Specific Performance and Accounting. The case is currently stayed in the Southern District of California as the parties take jurisdictional discovery. NCR has filed a motion to dismiss, motion to transfer venue and motion to compel arbitration. The court set a briefing schedule and our opposition to those motions were due in March 2023. There was a hearing in early April and the Company is awaiting a decision from the court. Significant Contracts See Note 1 for information on the capital raises completed in January 2022, February 2023, and August 2023. 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. On February 19, 2021, the Company paid to Infinios the $ 100 708 efined by the Digital Banking Platform Operating Agreement. On March 25, 2021, the Company issued 1,895,948 67.5 2.8 1 On May 4, 2023, the Company notified Infinios of its intent to terminate its relationship and commenced a good-faith negotiation with Infinios. The termination terms were not completely agreed upon as of the date of the Company’s 8-K dated June 7, 2023, as the negotiations between the Company and Infinios continued. 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. See Note 3 Intangible Assets - Capitalized Development Cost and Prepaid Licenses. On or about October 4, 2023, Infinios filed a demand for arbitration and a Statement of Claim before the International Centre for Dispute Resolution, Case No. 01-23-0004-3881 (the “Arbitration Claim”). In the Arbitration Claim, Infinios alleges damages of $598,525, and asserts a demand for the grant and registration of shares. On November 13, 2023, the Company filed an Answer to the Arbitration Claim, along with Counterclaims. While the Company will continue to pursue consensual means of resolving this dispute, it intends to vigorously defend the claims in the Arbitration Claim, and prosecute the causes of action in its Counterclaims. Instacash and PayToMe.co In June 2023, the Company entered into a licensing agreement with InstaCash and PayToMe.co. |
STOCKHOLDERS_ EQUITY
STOCKHOLDERS’ EQUITY | 9 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
STOCKHOLDERS’ EQUITY | NOTE 9 – STOCKHOLDERS’ EQUITY ATM Offering In August 2023, the Company entered into a sales agreement under which the Company may offer and 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. During the nine months ended September 30, 2023, the Company sold 229,283 667 Common Stock During the nine months ended September 30, 2023 and 2022, the Company issued 330,000 345,742 711 566 During the nine months ended September 30, 2023 and 2022, the Company granted 86,250 133,912 126 194 As of September 30, 2023, the Company reserved 10,800 shares of common stock for HotHand's shareholders in relation to incomplete HotHand shareholder contact information and or unexecuted APCX shareholder issuance agreements. These said shares will remain in escrow until each party is identified and new issuance agreement is fully executed. Stock Options During the nine months ended September 30, 2023, options to purchase 763,726 1.81 1,149 The fair value of the options for the nine months ended September 30, 2023 is estimated using a Black-Scholes option pricing model with the following range of assumptions: Schedule of black-scholes option pricing model Market value of common stock on issuance date $1.77 - $3.12 Exercise price $1.77 - $3.12 Expected volatility 162% - 172% Expected term (in years) 2.0 - 2.5 Risk-free interest rate 4.15% - 4.52% Expected dividend yields – The following table summarizes option activity: Schedule of option activity Number of Weighted Weighted Outstanding December 31, 2022 1,089,868 $ 7.00 1.91 Issued 763,726 $ 1.81 Exercised (10,528 ) $ 1.43 Cancelled (230,526 ) $ 7.21 Outstanding as of September 30, 2023 1,612,540 $ 1.33 2.66 Outstanding as of September 30, 2023, vested 1,543,448 $ 1.30 2.66 The Company recorded $ 2.5 122 On December 7, 2021, the board authorized the Company’s Equit 1,752,632 430,390 In May 2023, the shareholders approved the Company's proposed resolution to re-price its options. The options were repriced to $0.7152 and $1.4304 for employees and non-employees respectively. The Company recorded the modification expense of $ 711 Warrants In 2020, the Company entered into a security purchase agreement with an investor pursuant to which the Company agreed to sell the investor a $300 thousand convertible note bearing interest at 12% per annum. The Company also sold warrants to the investors to purchase up to an aggregate of 21,052 shares of common stock, with an exercise term of five (5) years, at a per share price of $14.25 which may be exercised by cashless exercise. The number of warrants adjusted in the period ending March 31, 2022 due to a reset event on January 7, 2022 changed the exercise price from $9.50 to $2.52 and increased the number of warrants from 31,578 to 119,095. The warrants were deemed a derivative liability and recorded as a debt discount at their date of issuance. As of September 30, 2023, the derivative liabilities are zero as the Company settled the convertible note and also extinguished its warrants related to its derivative liability as a result of the settlement. On February 2, 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 1,666,667 5 The offering that was completed in February 2023, caused a reset to the exercise price of existing warrants from $5.19 to $4.15. In total, 4,156,626 warrants were reset and $763 thousand was recorded as a result of the reset. In April 2023, AppTech and EMAF each filed a Stipulation withdrawing the Cross-Appeal, which was then closed in 2023. The related convertible note, warrants, and derivative liabilities were extinguished. In total, the Company has 5,823,036 See Note 1 for information on warrants issued during the Offering and note 6 for additional information on the derivative liability. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 10 – SUBSEQUENT EVENTS In August 2023, the Company entered into a sales agreement under which the Company may offer and 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. During the month ended October 31, 2023, the Company sold 246,317 shares of common stock under the ATM, for which the Company received net proceeds of $669 thousand after deducting commissions, fees and expenses. On October 13, 2023, the Company entered into a Membership Interest Purchase Agreement (the “Membership Interest Purchase Agreement”) with Alliance Partners, LLC, a Nevada limited liability company (“Alliance Partners”), and Chris Leyva (the “Seller”), pursuant to which the Company agreed, upon the terms and subject to the conditions of the Membership Interest Purchase Agreement, to purchase all of the Seller’s interest in, to and under the membership interests of Alliance Partners (the “Transaction”). As consideration for the purchase of the membership interests of Alliance Partners, the Company has agreed to pay the Seller a total consideration of $2.0 million in cash and assume the obligations and liabilities of Alliance Partners, subject to the satisfaction of certain customary closing conditions. The Company closed the Transaction on October 26, 2023 (the “Closing Date”). Pursuant to the terms of the Membership Interest Purchase Agreement, the Company paid $500,000 to the Seller. Subsequent to the Closing Date, on or before January 7, 2024, the Company shall pay $750,000 to the Seller, and on or before April 7, 2024, the Company shall pay $750,000 to the Seller. On October 24, 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 is $2.10. On October 26, 2023, the Company closed the Offering and raised $3.5 million in gross proceeds from the Offering. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | 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, 2023 and September 30, 2022. 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, 2022, filed with the SEC on March 20, 2023. The interim results for the three and nine months ended September 30, 2023 are not necessarily indicative of the results to be expected for the year ended December 31, 2023 or for any future interim periods. |
Basis of Consolidation | Basis of Consolidation The consolidated unaudited financial statements include the accounts of AppTech Payments Corp., and wholly owned subsidiary of which the Company is the primary beneficiary. All significant inter-company accounts and transactions are eliminated in consolidation. |
Use of Estimates | 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. Significant estimates include the estimated liabilities related to various vendors in which communications have ceased, contingent liabilities, and valuation of the derivative liabilities. Actual results could differ from those estimates. |
Concentration of Credit Risk | 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 (“FDIC”) 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. 93 73 12 For the three months of September 30, 2023, two customers represented a significant amount of total revenue, at 40 52 68 For the nine months of September 30, 2023 and September 30, 2022, two customers represented a significant amount of total revenue, at 61 20 69 11 |
Software Development Costs | Software Development Costs The Company capitalizes certain costs related to the development of its digital banking platform. Costs incurred during the development phase are capitalized only when we believe it is probable the development will result in new or additional functionality. The types of costs capitalized during the development phase include employee compensation and consulting fees for third party developers working on these projects. Costs related to the preliminary project planning phase and post implementation phase are expensed as incurred. The digital banking platform is amortized on a straight line basis over the estimated useful life of the asset. |
Revenue Recognition | 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 customers are recorded as a reduction to revenues. |
Licensing Revenue | Licensing Revenue The Company is actively pursuing strategic partnership agreements that licenses its 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. |
Fair Value Measurements | Fair Value Measurements The Company follows FASB ASC 820, Fair Value Measurements and Disclosures (“ASC 820”) to measure and disclose the fair value of its financial instruments. ASC 820 establishes a framework for measuring fair value in U.S. GAAP and expands disclosures about fair value measurements and establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The three levels of fair value hierarchy defined by ASC 820 are described below: Level 1 Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. Level 2 Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 3 Pricing inputs that are generally unobservable inputs and not corroborated by market data. Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument. The carrying amounts reported in the Company’s financial statements for cash, accounts payable and accrued expenses approximate their fair value because of the immediate or short-term maturity of these financial instruments. Transactions involving related parties cannot be presumed to be carried out on an arms-length basis, as the requisite conditions of competitive, free-marketing dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm’s-length transactions unless such representations can be substantiated. As of September 30, 2023, the carrying value of the Company's financial instruments approximate their fair value. The following table presents financial instruments that are measured and recognized at fair value as of December 31, 2022 on recurring basis (in thousands): Schedule of fair value measurements December 31, 2022 Level 1 Level 2 Level 3 Total Carrying Derivative liabilities $ – $ – $ 433 $ 433 See Note 6 for discussion of valuation and roll forward related to derivative liabilities. |
Intangible Assets and Patents | Intangible Assets and Patents Our intangible assets only consist of patents. We amortize the patents on a straight-line basis from 3 years to 15 years |
Research and Development | 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 the SMS short code texting platform, contract and other outside services. Total R&D costs for the nine months ended September 30, 2023 and 2022 was approximately $ 2.8 5.5 |
Per Share Information | 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, convertible debt and convertible preferred stock. The number of common stock equivalents not included in diluted income per share was 8,118,273 5,999,940 Schedule of anti-dilutive shares Nine Months Ended September 30, 2023 September 30, 2022 Series A preferred stock 1,149 1,149 Convertible debt – 174,060 Warrants 5,823,036 4,275,464 Options 1,612,542 1,039,868 Restricted stock units 681,546 509,399 Total 8,118,273 5,999,940 |
Derivative Liability | Derivative Liability The Company issued debts that consist of the issuance of convertible notes with variable conversion provisions. In addition, the Company issued warrants with variable anti-dilution provisions. The conversion terms of the convertible notes and warrants are variable based on certain factors, such as the future price of the Company’s common stock. The number of shares of common stock to be issued is based on the future price of the Company’s common stock. The number of shares of common stock issuable upon conversion of the promissory note is indeterminate. Pursuant to ASC 815-15 Embedded Derivatives, the fair values of the variable conversion option and warrants and shares to be issued were recorded as derivative liabilities on the issuance date and at each reporting period. |
Stock Based Compensation | 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 estimated fair values. Fair value is generally determined based on the closing price of the Company’s common stock on the date of grant and is recognized over the service period. The Company has several consulting agreements that have share based payment awards based on performance. These agreements typically require the Company to issue common stock to the consultants on a monthly basis. The Company records the fair market value of the common stock issuable at each month end when the performance is complete based upon the closing market price of the Company’s common stock. |
New Accounting Pronouncements | 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. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Schedule of fair value measurements | Schedule of fair value measurements December 31, 2022 Level 1 Level 2 Level 3 Total Carrying Derivative liabilities $ – $ – $ 433 $ 433 |
Schedule of anti-dilutive shares | Schedule of anti-dilutive shares Nine Months Ended September 30, 2023 September 30, 2022 Series A preferred stock 1,149 1,149 Convertible debt – 174,060 Warrants 5,823,036 4,275,464 Options 1,612,542 1,039,868 Restricted stock units 681,546 509,399 Total 8,118,273 5,999,940 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of patents as an intangible assets | Schedule of patents as an intangible assets September 30, 2023 Balance as of December 31, 2021 $ – Acquisition of patents 407 Amortization of patents (96 ) Balance as of December 31, 2022 311 Acquisition of patents – Amortization of patents (102 ) Balance as of September 30, 2023 $ 209 |
ACCRUED LIABILITIES (Tables)
ACCRUED LIABILITIES (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of accrued liabilities | Schedule of accrued liabilities September 30, 2023 December 31, 2022 Accrued interest – third parties $ – $ 1,436 Accrued payroll 213 311 Accrued residuals 22 31 Anti-dilution provision 72 72 Other 33 20 Total accrued liabilities $ 340 $ 1,870 |
DERIVATIVE LIABILITIES (Tables)
DERIVATIVE LIABILITIES (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Derivative Liabilities | |
Schedule of derivative liabilities | Schedule of derivative liabilities Derivative Liability Derivative Total Balance as of December 31, 2022 $ 266 $ 167 $ 433 Change in fair value 1 (28 ) (27 ) Extinguishment of the derivative liability (267 ) (139 ) (406 ) Balance as of September 30, 2023 $ – $ – $ – |
Schedule of assumptions for derivatives | Schedule of assumptions for derivatives Market value of common stock $ 1.49 Expected volatility 52.6% Expected term (in years) 0.25 Risk-free interest rate 4.42% During the nine months ended September 30, 2023, the fair value of the derivative liability – warrants is estimated using a Monte Carlo pricing model with the following assumptions: Market value of common stock $ 1.49 Expected volatility 71.1% Expected term (in years) 2.64 Risk-free interest rate 4.28% |
RIGHT OF USE ASSET (Tables)
RIGHT OF USE ASSET (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Right Of Use Asset | |
Schedule of right of use asset | Schedule of right of use asset 2023 $ 22 2024 90 2025 8 Operating Lease Total 120 Less: Imputed interest (10 ) Total $ 110 |
STOCKHOLDERS_ EQUITY (Tables)
STOCKHOLDERS’ EQUITY (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
Schedule of black-scholes option pricing model | Schedule of black-scholes option pricing model Market value of common stock on issuance date $1.77 - $3.12 Exercise price $1.77 - $3.12 Expected volatility 162% - 172% Expected term (in years) 2.0 - 2.5 Risk-free interest rate 4.15% - 4.52% Expected dividend yields – |
Schedule of option activity | Schedule of option activity Number of Weighted Weighted Outstanding December 31, 2022 1,089,868 $ 7.00 1.91 Issued 763,726 $ 1.81 Exercised (10,528 ) $ 1.43 Cancelled (230,526 ) $ 7.21 Outstanding as of September 30, 2023 1,612,540 $ 1.33 2.66 Outstanding as of September 30, 2023, vested 1,543,448 $ 1.30 2.66 |
ORGANIZATION AND DESCRIPTION _2
ORGANIZATION AND DESCRIPTION OF BUSINESS (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 9 Months Ended | ||||
Jan. 07, 2022 | Dec. 13, 2021 | Aug. 31, 2023 | Feb. 28, 2023 | Sep. 30, 2023 | Nov. 13, 2023 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Reverse split | 9.5 to 1 | |||||
Sale of stock unit | $ 4.15 | |||||
Subsequent Event [Member] | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Remains available amount of shelf registration | $ 66,500 | |||||
Offering [Member] | Units [Member] | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Stock issued new, shares | 3,614,458 | |||||
Common stock unit, description | one share of common stock and a warrant to purchase one share of common stock | |||||
Proceeds from sale of equity | $ 13,400 | |||||
Offering [Member] | Warrants [Member] | E F Hutton [Member] | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Warrants issued, shares | 542,168 | |||||
Offering [Member] | Offering Warrants [Member] | E F Hutton [Member] | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Warrants issued, shares | 3,614,458 | |||||
Underwritten Public Offering [Member] | Units [Member] | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Gross proceeds from sale of equity | $ 5,000 | |||||
ATM Offering [Member] | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Stock issued new, shares | 229,283 | 229,283 | ||||
Proceeds from sale of equity | $ 667 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details - Fair Value Measurements) - Fair Value, Recurring [Member] - Derivative Liabilities [Member] $ in Thousands | Dec. 31, 2022 USD ($) |
Platform Operator, Crypto-Asset [Line Items] | |
Total Carrying Value | $ 433 |
Fair Value, Inputs, Level 1 [Member] | |
Platform Operator, Crypto-Asset [Line Items] | |
Total Carrying Value | 0 |
Fair Value, Inputs, Level 2 [Member] | |
Platform Operator, Crypto-Asset [Line Items] | |
Total Carrying Value | 0 |
Fair Value, Inputs, Level 3 [Member] | |
Platform Operator, Crypto-Asset [Line Items] | |
Total Carrying Value | $ 433 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details - Antidilutive Shares) - shares | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 8,118,273 | 5,999,940 |
Series A Preferred Stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 1,149 | 1,149 |
Convertible Debt [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 0 | 174,060 |
Warrants [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 5,823,036 | 4,275,464 |
Options [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 1,612,542 | 1,039,868 |
Restricted Stock Units [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 681,546 | 509,399 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Product Information [Line Items] | |||||
Research and Development Expense | $ 751 | $ 1,513 | $ 2,774 | $ 5,539 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 8,118,273 | 5,999,940 | |||
Patents [Member] | |||||
Product Information [Line Items] | |||||
Intangible asset useful life | 3 years to 15 years | ||||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | One Customer [Member] | |||||
Product Information [Line Items] | |||||
Concentration Risk, Percentage | 93% | 73% | |||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Another Customer [Member] | |||||
Product Information [Line Items] | |||||
Concentration Risk, Percentage | 12% | ||||
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | One Customer [Member] | |||||
Product Information [Line Items] | |||||
Concentration Risk, Percentage | 40% | 68% | 61% | 69% | |
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Another Customer [Member] | |||||
Product Information [Line Items] | |||||
Concentration Risk, Percentage | 52% | 20% | 11% |
INTANGIBLE ASSETS (Details)
INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Finite-Lived Intangible Assets [Line Items] | |||
Amortization of patents | $ (712) | $ 0 | |
Patents [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Beginning balance | 311 | $ 0 | $ 0 |
Acquisition of patents | 0 | 407 | |
Amortization of patents | (102) | (96) | |
Ending balance | $ 209 | $ 311 |
INTANGIBLE ASSETS (Details Narr
INTANGIBLE ASSETS (Details Narrative) - USD ($) $ in Millions | 9 Months Ended | |||
Apr. 18, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Software development costs | $ 5.2 | |||
Amortization expenses | $ 0.9 | $ 1.8 | ||
Hot Hand [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Stock Issued During Period, Shares, Acquisitions | 225,000 | |||
Infinios Project [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Capitalized assets | $ 6.1 |
ACCRUED LIABILITIES (Details)
ACCRUED LIABILITIES (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Other Liabilities Disclosure [Abstract] | ||
Accrued interest – third parties | $ 0 | $ 1,436 |
Accrued payroll | 213 | 311 |
Accrued residuals | 22 | 31 |
Anti-dilution provision | 72 | 72 |
Other | 33 | 20 |
Total accrued liabilities | $ 340 | $ 1,870 |
NOTES PAYABLE AND CONVERTIBLE_2
NOTES PAYABLE AND CONVERTIBLE NOTES PAYABLE (Details Narrative) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
Notes payable | $ 1 | $ 1,021 |
Accrued interest related notes payable | 340 | 1,870 |
Notes payable to related party | 0 | 88 |
Related Party 1 [Member] | ||
Debt Instrument [Line Items] | ||
Accrued interest | 68 | |
Convertible Notes Payable [Member] | ||
Debt Instrument [Line Items] | ||
Convertible note payable | 0 | 280 |
Accrued interest | 0 | 119 |
Notes Payable [Member] | ||
Debt Instrument [Line Items] | ||
Accrued interest | 0 | 6 |
Notes payable | $ 68 | 68 |
Significant Shareholder [Member] | ||
Debt Instrument [Line Items] | ||
Notes payable | 597 | |
Accrued interest related notes payable | 83 | |
Third Parties [Member] | ||
Debt Instrument [Line Items] | ||
Notes payable | 423 | |
Accrued interest related notes payable | $ 538 |
DERIVATIVE LIABILITIES (Details
DERIVATIVE LIABILITIES (Details - Fair Value of Derivatives) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Offsetting Assets [Line Items] | ||
Derivative Liability, Beginning balance | $ 433 | |
Derivative Liability, Change in fair value | (27) | $ (166) |
Derivative Liability, Extinguishment of derivative liability | (406) | |
Derivative Liability, Ending balance | 0 | 433 |
Derivative Liability Convertible Notes [Member] | ||
Offsetting Assets [Line Items] | ||
Derivative Liability, Beginning balance | 266 | |
Derivative Liability, Change in fair value | 1 | |
Derivative Liability, Extinguishment of derivative liability | (267) | |
Derivative Liability, Ending balance | 0 | 266 |
Derivative Liability Warrants [Member] | ||
Offsetting Assets [Line Items] | ||
Derivative Liability, Beginning balance | 167 | |
Derivative Liability, Change in fair value | (28) | |
Derivative Liability, Extinguishment of derivative liability | (139) | |
Derivative Liability, Ending balance | $ 0 | $ 167 |
DERIVATIVE LIABILITIES (Detai_2
DERIVATIVE LIABILITIES (Details -Assumptions for Derivatives) | 9 Months Ended |
Sep. 30, 2023 | |
Measurement Input, Share Price [Member] | Convertible Notes [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Derivative liability warrants | 1.49 |
Measurement Input, Share Price [Member] | Warrants [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Derivative liability warrants | 1.49 |
Measurement Input, Price Volatility [Member] | Convertible Notes [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Derivative liability warrants | 52.6% |
Measurement Input, Price Volatility [Member] | Warrants [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Derivative liability warrants | 71.1% |
Measurement Input, Expected Term [Member] | Convertible Notes [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Derivative liability warrants | 0.25 |
Measurement Input, Expected Term [Member] | Warrants [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Derivative liability warrants | 2.64 |
Measurement Input, Risk Free Interest Rate [Member] | Convertible Notes [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Derivative liability warrants | 4.42% |
Measurement Input, Risk Free Interest Rate [Member] | Warrants [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Derivative liability warrants | 4.28% |
DERIVATIVE LIABILITIES (Detai_3
DERIVATIVE LIABILITIES (Details Narrative) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Derivative Liabilities | ||
[custom:DerivativeLossOnDerivative1] | $ 390 | |
Unrealized Gain (Loss) on Derivatives | $ 27 | $ 166 |
RIGHT OF USE ASSET (Details)
RIGHT OF USE ASSET (Details) $ in Thousands | Sep. 30, 2023 USD ($) |
Right Of Use Asset | |
2023 | $ 22 |
2024 | 90 |
2025 | 8 |
Operating Lease Total | 120 |
Less: Imputed interest | (10) |
Total | $ 110 |
RIGHT OF USE ASSET (Details Nar
RIGHT OF USE ASSET (Details Narrative) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Right Of Use Asset | ||
Rent expense | $ 55 | $ 64 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||
Apr. 23, 2023 | Feb. 28, 2021 | Feb. 19, 2021 | Mar. 31, 2023 | Mar. 31, 2022 | Sep. 30, 2023 | Dec. 31, 2022 | |
Cash and Cash Equivalents [Line Items] | |||||||
Settlement amount | $ 880 | ||||||
Extinguishment gain | $ 250 | ||||||
Stock issued new, value | $ 4,490 | $ 13,395 | |||||
Capitalized software | $ 5,200 | ||||||
Infinios Financial Services [Member] | |||||||
Cash and Cash Equivalents [Line Items] | |||||||
Payment of engagement fee | $ 100 | ||||||
Payment of initial funding fee | $ 708 | ||||||
Stock issued new, shares | 1,895,948 | ||||||
Stock issued new, value | $ 67,500 | ||||||
Capitalized software | 2,800 | ||||||
Capitalized licensing fees | $ 1,000 | ||||||
Cash Backed Bond [Member] | |||||||
Cash and Cash Equivalents [Line Items] | |||||||
Secured a cash | $ 1,300 |
TOCKHOLDERS EQUITY (DEFICIT) (D
TOCKHOLDERS EQUITY (DEFICIT) (Details - Black-Scholes option assumptions) - Stock Options [Member] Pure in Thousands | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Market value of common stock on issuance date | $1.77 - $3.12 |
Exercise price | $1.77 - $3.12 |
Expected volatility | 162% - 172% |
Expected term (in years) | 2.0 - 2.5 |
Risk-free interest rate | 4.15% - 4.52% |
Expected dividend yields | 0% |
STOCKHOLDERS EQUITY (DEFICIT) (
STOCKHOLDERS EQUITY (DEFICIT) (Details - Option activity) - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Equity [Abstract] | ||
Options outstanding, balance | 1,612,540 | 1,089,868 |
Weighted average exercise price, options outstanding | $ 1.33 | $ 7 |
Weighted average remaining years, options outstanding | 2 years 7 months 28 days | 1 year 10 months 28 days |
Options issued, shares | 763,726 | |
Weighted average exercise price, options issued | $ 1.81 | |
Options exercised, shares | (10,528) | |
Weighted average exercise price, options exercised | $ 1.43 | |
Options cancelled, shares | (230,526) | |
Weighted average exercise price, options cancelled | $ 7.21 | |
Options vested, shares | 1,543,448 | |
Weighted average exercise price, options vested | $ 1.30 | |
Weighted average remaining years, options vested | 2 years 7 months 28 days |
STOCKHOLDERS_ EQUITY (Details N
STOCKHOLDERS’ EQUITY (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Feb. 02, 2023 | Aug. 31, 2023 | Sep. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 07, 2021 | |
Subsidiary, Sale of Stock [Line Items] | |||||||
Stock issued for services, value | $ 153,000 | $ 234,000 | |||||
Options granted, shares | 763,726 | ||||||
Weighted average exercise price, options granted | $ 1.81 | ||||||
Options granted, value | 1,149,000 | $ 1,149,000 | |||||
Share-based compensation expense | 2,500,000 | ||||||
Share-based compensation expense not yet recognized | $ 122,000 | 122,000 | |||||
Share-based compensation modification expense | $ 711 | ||||||
Warrants outstanding | 5,823,036 | 5,823,036 | |||||
Equity Incentive Plan [Member] | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Stock authorized for issuance under the plan | 1,752,632 | ||||||
Stock available for issuance, shares | 430,390 | 430,390 | |||||
Several Consultants [Member] | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Stock issued for services, shares | 330,000 | 345,742 | |||||
Stock issued for services, value | $ 711,000 | $ 566,000 | |||||
Board Of Directors [Member] | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Stock issued for services, shares | 86,250 | 133,912 | |||||
Stock issued for services, value | $ 126,000 | $ 194,000 | |||||
ATM Offering [Member] | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Stock issued new, shares | 229,283 | 229,283 | |||||
Proceeds from the sale of equity | $ 667,000 | ||||||
Registered Direct Offering [Member] | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Stock issued new, shares | 1,666,667 | ||||||
Warrants issued, shares | 1,666,667 | ||||||
Gross proceeds from sale of equity | $ 5,000,000 |