Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2024 | Aug. 13, 2024 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Jun. 30, 2024 | |
Document Fiscal Period Focus | Q2 | |
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 | 25,114,922 | |
Common Stock, $0.001 par value per share [Member] | ||
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 [Member] | ||
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 | Jun. 30, 2024 | Dec. 31, 2023 |
Current assets | ||
Cash and cash equivalents | $ 16 | $ 1,281 |
Accounts receivable | 15 | 30 |
Prepaid expenses | 297 | 205 |
Total current assets | 328 | 1,516 |
Note receivable | 26 | 26 |
Right of use asset | 48 | 66 |
Security deposit | 19 | 9 |
Intangible assets, net of accumulated amortization | 3,919 | 4,428 |
Goodwill | 1,161 | 1,161 |
Capitalized software development, net of accumulated amortization | 963 | 1,147 |
TOTAL ASSETS | 6,464 | 8,353 |
Current liabilities | ||
Accounts payable | 2,480 | 1,680 |
Accounts payable - related party | 102 | 119 |
Accrued liabilities | 1,675 | 1,958 |
Notes payable, net of discount of $10 and $0, respectively | 191 | 1 |
Deferred revenue | 150 | 244 |
Right of use liability | 63 | 78 |
Total current liabilities | 4,661 | 4,080 |
Long-term liabilities | ||
Right of use liability, net of current portion | 0 | 14 |
Notes payable, net of current portion | 63 | 65 |
Total long-term liabilities | 63 | 79 |
TOTAL LIABILITIES | 4,724 | 4,159 |
Commitments and contingencies (Note 7) | ||
Stockholders’ equity | ||
Preferred stock: 100,000 shares authorized at June 30, 2024 and December 31, 2023, respectively; Series A preferred stock: $0.001 par value;14 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively. | 0 | 0 |
Common stock, $0.001 par value; 105,263,158 shares authorized; 24,864,922 and 22,251,742 issued and outstanding at June 30, 2024 and December 31, 2023, respectively | 25 | 22 |
Additional paid-in capital | 167,423 | 163,921 |
Accumulated deficit | (165,708) | (159,749) |
Total stockholders’ equity | 1,740 | 4,194 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ 6,464 | $ 8,353 |
CONSOLIDATED BALANCE SHEETS (_2
CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - $ / shares | Jun. 30, 2024 | Dec. 31, 2023 |
Statement of Financial Position [Abstract] | ||
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 | 24,864,922 | 22,251,742 |
Common stock, shares outstanding | 24,864,922 | 22,251,742 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Income Statement [Abstract] | ||||
Revenues | $ 76 | $ 134 | $ 181 | $ 223 |
Cost of revenues | 14 | 62 | 25 | 115 |
Gross profit | 62 | 72 | 156 | 108 |
Operating expenses: | ||||
Selling, general and administrative, including stock based compensation of $462 and $811 for the three months ended June 30, 2024 and 2023, respectively, $909 and $1,043 for the six months ended June 30, 2024 and 2023, respectively | 2,320 | 2,816 | 4,803 | 4,887 |
Impairment of intangible assets | 0 | 6,131 | 0 | 6,131 |
Research and development, including stock based compensation of $91 and $2 for the three months ended June 30, 2024 and 2023, respectively, $131 and $630 for the six months ended June 30, 2024 and 2023, respectively | 633 | 498 | 1,276 | 2,023 |
Total operating expenses | 2,953 | 9,445 | 6,079 | 13,041 |
Loss from operations | (2,891) | (9,373) | (5,923) | (12,933) |
Other income (expenses) | ||||
Interest expense (income) | (32) | 3 | (35) | (43) |
Change in fair value of derivative liability | 0 | 0 | 0 | 27 |
Other income (expenses) | 1 | 287 | (1) | 715 |
Total other expenses | (31) | 290 | (36) | 699 |
Loss before provision for income taxes | (2,922) | (9,083) | (5,959) | (12,234) |
Provision for income taxes | 0 | 0 | 0 | 0 |
Net loss | (2,922) | (9,083) | (5,959) | (12,234) |
Deemed dividend related to warrant resets | 0 | 0 | 0 | (763) |
Net loss attributable to common stockholders | $ (2,922) | $ (9,083) | $ (5,959) | $ (12,997) |
Basic net loss per common share | $ (0.12) | $ (0.49) | $ (0.25) | $ (0.71) |
Diluted net loss per common share | $ (0.12) | $ (0.49) | $ (0.25) | $ (0.71) |
Weighted-average number of shares used basic per share amounts | 24,765,307 | 18,468,741 | 23,653,211 | 18,200,197 |
Weighted-average number of shares used diluted per share amounts | 24,765,307 | 18,468,741 | 23,653,211 | 18,200,197 |
CONSOLIDATED STATEMENTS OF OP_2
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Share-Based Payment Arrangement, Noncash Expense | $ 1,040 | $ 1,673 | ||
Selling General And Administrative [Member] | ||||
Share-Based Payment Arrangement, Noncash Expense | $ 462 | $ 811 | 909 | 1,043 |
Research And Development [Member] | ||||
Share-Based Payment Arrangement, Noncash Expense | $ 91 | $ 2 | $ 131 | $ 630 |
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, 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 | |||
Beginning balance, shares | 178,750 | ||||
Repricing of warrants | 763 | (763) | |||
Net proceeds from sale of common shares | $ 2 | 4,488 | 4,490 | ||
Beginning balance, shares | 1,666,667 | ||||
Ending balance, value at Mar. 31, 2023 | $ 19 | 154,226 | (144,388) | 9,857 | |
Beginning 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 | (12,234) | ||||
Ending balance, value at Jun. 30, 2023 | $ 19 | 155,039 | (153,471) | 1,587 | |
Beginning balance, shares at Jun. 30, 2023 | 14 | 18,581,447 | |||
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 | |||
Beginning balance, shares | 38,750 | ||||
Ending balance, value at Jun. 30, 2023 | $ 19 | 155,039 | (153,471) | 1,587 | |
Beginning balance, shares at Jun. 30, 2023 | 14 | 18,581,447 | |||
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 | ||
Beginning balance, shares | 55,000 | ||||
Net proceeds from sale of common shares | $ 2 | 2,436 | 2,438 | ||
Beginning balance, shares | 2,423,180 | ||||
Ending balance, value at Mar. 31, 2024 | $ 25 | 166,843 | (162,786) | 4,082 | |
Beginning 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 | (5,959) | ||||
Ending balance, value at Jun. 30, 2024 | $ 25 | 167,423 | (165,708) | 1,740 | |
Beginning balance, shares at Jun. 30, 2024 | 14 | 24,864,922 | |||
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 | |||
Beginning balance, shares | 105,000 | ||||
Shares issued with Note Payable | 27 | 27 | |||
Beginning balance, shares | 30,000 | ||||
Ending balance, value at Jun. 30, 2024 | $ 25 | $ 167,423 | $ (165,708) | $ 1,740 | |
Beginning balance, shares at Jun. 30, 2024 | 14 | 24,864,922 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (5,959) | $ (12,234) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Stock based compensation | 1,040 | 1,673 |
Cancellation of stock repurchase liabilities | 0 | (430) |
Impairment of intangible assets | 0 | 6,131 |
Gain on settlement of convertible note, warrants, and derivative liabilities | 0 | (250) |
Amortization of debt discount | 17 | 4 |
Amortization of intangible assets and software | 693 | 586 |
Change in fair value of derivative liabilities | 0 | (27) |
Changes in operating assets and liabilities: | ||
Accounts receivable | 16 | (391) |
Prepaid expenses | (102) | 454 |
Accounts payable | 781 | 129 |
Accrued liabilities | (283) | (1,447) |
Deferred revenue | (94) | 390 |
Right of use asset and liability, net | (10) | (4) |
Net cash used in operating activities | (3,901) | (5,416) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Net cash used in investing activities | 0 | 0 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from note payable | 200 | 0 |
Payments on loans payable - related parties | 0 | (88) |
Proceeds from sale of common stock | 2,438 | 4,490 |
Repayment of notes payable | (2) | (1,020) |
Repayment of convertible notes payable | 0 | (679) |
Net cash provided by financing activities | 2,636 | 2,703 |
Changes in cash and cash equivalents | (1,265) | (2,713) |
Cash and cash equivalents, beginning of year | 1,281 | 3,462 |
Cash and cash equivalents, end of year | 16 | 749 |
Supplemental disclosures of cash flow information: | ||
Cash paid for interest | 2 | 1,429 |
Cash paid for income taxes | 0 | 0 |
NON-CASH INVESTING AND FINANCING ACTIVITIES | ||
Issuance of stock for prepaid services | 111 | 234 |
Common stock issued with Note Payable | 27 | |
Cancellation of stock repurchase liabilities | $ 0 | $ 430 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2024 | Mar. 31, 2024 | Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Pay vs Performance Disclosure [Table] | ||||||
Net Income (Loss) | $ (2,922) | $ (3,037) | $ (9,083) | $ (3,151) | $ (5,959) | $ (12,234) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Jun. 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
ORGANIZATION AND DESCRIPTION OF BUSINESS | 6 Months Ended |
Jun. 30, 2024 | |
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 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 a 7.5% preferred share equity interest. 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. The shares have not been issued as of the date of this filing. 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, 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 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 Footnote 8. Stockholders’ Equity - Equity Issued related to Acquisition The remaining outstanding payable as of June 30, 2024 is $ 1.35 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. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2024 | |
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 June 30, 2024 and June 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 six months ended June 30, 2024 are not necessarily indicative of the results to be expected for the year ended 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 June 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 June 30, 2024, 81 96 For the six months ended June 30, 2024, 82 86 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 six months ended June 30, 2024 and 2023 were approximately $ 1.3 2.0 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 10,702,946 6,705,196 Schedule of weighted average number of common stock equivalents June 30, 2024 June 30, 2023 Series A preferred stock 1,148 1,148 Warrants 7,489,960 5,823,036 Options 3,211,838 881,012 Total 10,702,946 6,705,196 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. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 6 Months Ended |
Jun. 30, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | NOTE 3 – INTANGIBLE ASSETS Intellectual Property The Company has two patent portfolios, which include: Mobile Payment Technology Geolocation Technology As of June 30, 2024 and December 31, 2023, the gross value of patents is $ 407 300 232 On October 26, 2023, the Company acquired FinZeo, a Nevada based LLC. The gross value of acquired intangible assets is $ 4.4 588 147 882 Intellectual Property as of June 30, 2024 and December 31, 2023 are as follows: Schedule of capitalized development cost Intellectual Property June 30, 2024 December 31, 2023 Beginning Balance $ 4,428 $ 311 Acquisition of intangible assets – 4,400 Amortization expenses (509 ) (283 ) Ending Balance $ 3,919 $ 4,428 Capitalized Software Development Costs The Company capitalizes certain costs related to the development of its digital payment and banking platform. As of June 30, 2024, the gross value of capitalized software development cost is approximately $ 1.6 603 419 368 Schedule of capitalized development cost Capitalized Software Development Cost June 30, 2024 December 31, 2023 Beginning Balance $ 1,147 $ 4,921 Impairment – (3,072 ) Amortization expenses (184 ) (702 ) Ending Balance $ 963 $ 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 deve 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 June 30, 2024, the Company recorded goodwill of approximately $ 1.2 See Note 1 - Purchase of Alliance Partners, LLC. |
ACCRUED LIABILITIES
ACCRUED LIABILITIES | 6 Months Ended |
Jun. 30, 2024 | |
Payables and Accruals [Abstract] | |
ACCRUED LIABILITIES | NOTE 4 – ACCRUED LIABILITIES Accrued liabilities as of June 30, 2024 and December 31, 2023 are as follows: Schedule of accrued liabilities June 30, 2024 December 31, 2023 Accrued payroll $ 188 $ 189 Anti-dilution provision 72 72 Payables due to related party 1,350 1,500 Other 65 197 Total accrued liabilities $ 1,675 $ 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 Infiinios, the Company accrued an additional 39,706 72 thousand See Note 7 - Commitment and Contingencies Payables due to related party The remaining outstanding payable as of June 30, 2024, is $ 1.35 Purchase of Alliance Partners, LLC (Business Combinations). |
NOTES PAYABLE
NOTES PAYABLE | 6 Months Ended |
Jun. 30, 2024 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE | NOTE 5 – NOTES PAYABLE The following is a summary of notes payable outstanding as of June 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 3.75 4 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 24 224 30,000 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. Refer to Note 9 - Subsequent Events for the Status of the Note Payable. As of June 30, 2024, the balance of all note payable outstanding was $ 254 66 8 0 |
RIGHT OF USE ASSET
RIGHT OF USE ASSET | 6 Months Ended |
Jun. 30, 2024 | |
Right Of Use Asset | |
RIGHT OF USE ASSET | 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 The rent expense was $ 37 36 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 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.) 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 2,347,905 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 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 November 13, 2023, the Company filed an Answer to the Arbitration Claim, along with Coun terclaims 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. 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. Refer to Note 9 – Subsequent Events for the Status of the Litigation. 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 June 30, 2024. |
STOCKHOLDERS_ EQUITY
STOCKHOLDERS’ EQUITY | 6 Months Ended |
Jun. 30, 2024 | |
Equity [Abstract] | |
STOCKHOLDERS’ EQUITY | NOTE 8 – STOCKHOLDERS’ EQUITY Series A Preferred Stock The Company is authorized to issue 100,000 0.001 14 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 0.001 24,864,922 22,251,742 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 1,666,667 5.0 million 763 thousand 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 June 30, 2024, the Company sold 898,780 2.1 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 1,666,667 3.5 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 2,000,000 300,000 As of June 30, 2024, approximately $ 52.7 Stock Issued for Services During the six months ended June 30, 2024, the Company granted 160,000 160,000 175 382 Stock Issued with Note Payable During the six months ended June 30, 2024, the Company issued 30,000 27 17 thousand 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 , 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 1,752,632 950,000 2,702,632 shares of common stock were authorized under the 2024 Plan, with 990,114 shares available for issuance as of June 30, 2024. In June 2024, the Company canceled 1 On March 20, 2024, the Company extended the expiration term of vested a 325 During the six months ended June 30, 2024, the Company granted 1,518,500 1. 1,000,000 1.58 0.64 2. On April 4, 2024, the Company granted 406,000 0.95 0.86 349 3. During the six months ended June 30, 2024, the Company granted 112,500 1.70 2.165 0.76 1.53 The following table summarizes option activity: Schedule of option activity Number of Weighted Weighted Outstanding December 31, 2023 2,725,564 $ 1.84 4.07 Issued 1,518,500 1.40 Exercised – – Cancelled (1,032,226 ) 2.25 Outstanding as of June 30, 2024 3,211,838 $ 1.50 5.94 Outstanding as of June 30, 2024, vested 1,661,841 $ 1.21 8.06 The unvested options includes a total of 1.5 7 During the six months ended June 30, 2024, the Company recorded $ 865 325 406,000 349 The options vest in equal monthly installments ranging from instantly to 12 months. For the six months ended June 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 assumptions Market value of common stock on issuance date $0.72 - $3.12 Exercise price $0.72 - $3.12 Expected volatility 102 144 Expected term (in years) 1.0 - 10.0 Risk-free interest rate 3.84 5.00 Expected dividend yields – Warrants As of June 30, 2024, the Company has 7,489,960 Schedule of warrant activity Number of Weighted Weighted Outstanding December 31, 2023 7,489,960 $ 3.52 3.83 Cancelled – – Issued – – Outstanding as of June 30, 2024 7,489,960 $ 3.52 3.33 See Note 1 for information on warrants issued during the Offering. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2024 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 9 – SUBSEQUENT EVENTS Private Placement Offering 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 exercise price of $1.16 (the “Exercise Price”), subject to adjustments similar to those applicable to the Conversion Price. 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 50,000 shares issued to the Purchaser and 50,000 shares issued to the Purchaser’s designee. 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 a 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. Stock and Option Grants On July 3, 2024, the Company granted 785,000 options under the equity plan and approximately 1.2 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. On July 29, 2024, the Company entered into a consulting agreement with a third-party marketing firm. In connection with this agreement, the Company executed an Equity Grant Agreement on July 31, 2024, under which the grantee was granted 150,000 shares of the Company’s common stock at a grant price of $0.893 per share. The shares were fully vested on the grant date. Status of the Note Payable On June 10, 2024, the Company entered into a 60-day unsecured note agreement with a third party, for $200,000. The note matured on August 10, 2024. Refer to Note 5. - Notes Payable As of August 14, 2024, the note and accrued interest have not been repaid, and the note is accruing $500 per day in late fees. Infinios Financial Services Case Update The Company had previously entered into a strategic partnership with Infinios Financial Services BSC (formerly NEC Payments B.S.C.) on October 1, 2020. This partnership was governed by a series of agreements, later amended and restated on February 11, 2021. The relationship faced challenges, leading to a termination notice issued by the Company in May 2023. Subsequently, Infinios filed a demand for arbitration, and the Company responded with counterclaims. On August 8, 2024, the Company entered into a Settlement Agreement and Mutual Release with Infinios Solutions (Bahrain) W.L.L. The terms of this Settlement Agreement are confidential. The terms of the settlement do not currently result in any additional amounts payable outside what has already been accrued. Following the fulfillment of its terms, both parties will jointly file for the dismissal and termination of the arbitration, expected to be completed before the end of September 2024. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2024 | |
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 June 30, 2024 and June 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 six months ended June 30, 2024 are not necessarily indicative of the results to be expected for the year ended December 31, 2024 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 subsidiaries 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. 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 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 June 30, 2024 and December 31, 2023. |
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 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 June 30, 2024, 81 96 For the six months ended June 30, 2024, 82 86 |
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 channel partners is recorded as a reduction in revenues. |
Licensing Revenue | 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 | 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 | 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 six months ended June 30, 2024 and 2023 were approximately $ 1.3 2.0 |
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, and convertible preferred stock. The number of common stock equivalents not included in diluted income per share was 10,702,946 6,705,196 Schedule of weighted average number of common stock equivalents June 30, 2024 June 30, 2023 Series A preferred stock 1,148 1,148 Warrants 7,489,960 5,823,036 Options 3,211,838 881,012 Total 10,702,946 6,705,196 |
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 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 | 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) | 6 Months Ended |
Jun. 30, 2024 | |
Accounting Policies [Abstract] | |
Schedule of weighted average number of common stock equivalents | Schedule of weighted average number of common stock equivalents June 30, 2024 June 30, 2023 Series A preferred stock 1,148 1,148 Warrants 7,489,960 5,823,036 Options 3,211,838 881,012 Total 10,702,946 6,705,196 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Intellectual Property [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Schedule of capitalized development cost | Schedule of capitalized development cost Intellectual Property June 30, 2024 December 31, 2023 Beginning Balance $ 4,428 $ 311 Acquisition of intangible assets – 4,400 Amortization expenses (509 ) (283 ) Ending Balance $ 3,919 $ 4,428 |
Capitalized Development Costs [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Schedule of capitalized development cost | Schedule of capitalized development cost Capitalized Software Development Cost June 30, 2024 December 31, 2023 Beginning Balance $ 1,147 $ 4,921 Impairment – (3,072 ) Amortization expenses (184 ) (702 ) Ending Balance $ 963 $ 1,147 |
ACCRUED LIABILITIES (Tables)
ACCRUED LIABILITIES (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Payables and Accruals [Abstract] | |
Schedule of accrued liabilities | Schedule of accrued liabilities June 30, 2024 December 31, 2023 Accrued payroll $ 188 $ 189 Anti-dilution provision 72 72 Payables due to related party 1,350 1,500 Other 65 197 Total accrued liabilities $ 1,675 $ 1,958 |
STOCKHOLDERS_ EQUITY (Tables)
STOCKHOLDERS’ EQUITY (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Equity [Abstract] | |
Schedule of option activity | Schedule of option activity Number of Weighted Weighted Outstanding December 31, 2023 2,725,564 $ 1.84 4.07 Issued 1,518,500 1.40 Exercised – – Cancelled (1,032,226 ) 2.25 Outstanding as of June 30, 2024 3,211,838 $ 1.50 5.94 Outstanding as of June 30, 2024, vested 1,661,841 $ 1.21 8.06 |
Schedule of assumptions | Schedule of assumptions Market value of common stock on issuance date $0.72 - $3.12 Exercise price $0.72 - $3.12 Expected volatility 102 144 Expected term (in years) 1.0 - 10.0 Risk-free interest rate 3.84 5.00 Expected dividend yields – |
Schedule of warrant activity | Schedule of warrant activity Number of Weighted Weighted Outstanding December 31, 2023 7,489,960 $ 3.52 3.83 Cancelled – – Issued – – Outstanding as of June 30, 2024 7,489,960 $ 3.52 3.33 |
ORGANIZATION AND DESCRIPTION _2
ORGANIZATION AND DESCRIPTION OF BUSINESS (Details Narrative) - Alliance Partners LLC [Member] - USD ($) $ in Thousands | Oct. 13, 2023 | Jun. 30, 2024 |
Restructuring Cost and Reserve [Line Items] | ||
Remaining outstanding payable | $ 1,350 | |
Membership Interest Purchase Agreement [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Total consideration | $ 2,000 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details - Antidilutive shares) - shares | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 10,702,946 | 6,705,196 |
Series A Preferred Stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 1,148 | 1,148 |
Warrants [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 7,489,960 | 5,823,036 |
Options [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 3,211,838 | 881,012 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | |
Product Information [Line Items] | |||||
Research and development expense | $ 633 | $ 498 | $ 1,276 | $ 2,023 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 10,702,946 | 6,705,196 | |||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Three Customers [Member] | |||||
Product Information [Line Items] | |||||
Concentration risk, percentage | 81% | 96% | |||
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Three Customers [Member] | |||||
Product Information [Line Items] | |||||
Concentration risk, percentage | 82% | 86% |
INTANGIBLE ASSETS (Details - In
INTANGIBLE ASSETS (Details - Intellectual property) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | |
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expenses | $ (693) | $ (586) | |
Intellectual Property [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Beginning balance | 4,428 | $ 311 | $ 311 |
Acquisition of intangible assets | 0 | 4,400 | |
Amortization expenses | (509) | (283) | |
Ending balance | $ 3,919 | $ 4,428 |
INTANGIBLE ASSETS (Details - Ca
INTANGIBLE ASSETS (Details - Capitalized development cost) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | |
Finite-Lived Intangible Assets [Line Items] | |||||
Impairment | $ 0 | $ (6,131) | $ 0 | $ (6,131) | |
Amortization expenses | (693) | (586) | |||
Capitalized Development Cost [Member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Beginning balance | 1,147 | $ 4,921 | $ 4,921 | ||
Impairment | 0 | (3,072) | |||
Amortization expenses | (184) | (702) | |||
Ending balance | $ 963 | $ 963 | $ 1,147 |
INTANGIBLE ASSETS (Details Narr
INTANGIBLE ASSETS (Details Narrative) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 | Oct. 26, 2023 | Dec. 31, 2022 |
Finite-Lived Intangible Assets [Line Items] | ||||
Goodwill | $ 1,161 | $ 1,161 | ||
Fin Zeo [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Gross value of acquired intangible assets | $ 4,400 | |||
Alliance Partners LLC [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Goodwill | 1,200 | |||
Patents [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Intangible assets, gross | 407 | 407 | ||
Cumulative amortization | 300 | 232 | ||
Intellectual Property [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Intangible assets, gross | 3,919 | 4,428 | $ 311 | |
Cumulative amortization | 588 | 147 | ||
Estimated aggregate amortization for each of five fiscal years | 882 | |||
Capitalized Development Costs [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Intangible assets, gross | 1,600 | |||
Cumulative amortization | 603 | $ 419 | ||
Finite-Lived Intangible Asset, Expected Amortization, Year Four | $ 368 |
ACCRUED LIABILITIES (Details -
ACCRUED LIABILITIES (Details - Due to related parties) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Total accrued liabilities | $ 1,675 | $ 1,958 |
Accrued Payroll [Member] | ||
Total accrued liabilities | 188 | 189 |
Antidilution Provision [Member] | ||
Total accrued liabilities | 72 | 72 |
Payables Due To Related Party [Member] | ||
Total accrued liabilities | 1,350 | 1,500 |
Other Accrued Liabilities [Member] | ||
Total accrued liabilities | $ 65 | $ 197 |
ACCRUED LIABILITIES (Details Na
ACCRUED LIABILITIES (Details Narrative) - USD ($) | Jun. 30, 2024 | Dec. 31, 2023 |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Remaining outstanding payable | $ 2,480,000 | $ 1,680,000 |
Fin Zeo [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Remaining outstanding payable | $ 1,350,000 | |
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 |
NOTES PAYABLE (Details Narrativ
NOTES PAYABLE (Details Narrative) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |||
Jun. 10, 2024 | Dec. 31, 2020 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | |
Debt Instrument [Line Items] | |||||
Proceeds from notes payable | $ 200 | $ 0 | |||
Note payable | $ 66 | ||||
Accrued interest | $ 0 | ||||
All Notes Payable [Member] | |||||
Debt Instrument [Line Items] | |||||
Accrued interest | 8 | ||||
Note payable | $ 254 | ||||
US Small Business Administration [Member] | Unsecured Note Payable 30 Year [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt face value | $ 68 | ||||
Debt stated interest rate | 3.75% | ||||
Debt annual periodic payment | $ 4 | ||||
Debt maturity date | Jul. 01, 2050 | ||||
Black Ice Advisors LLC [Member] | Unsecured Note Payable 60 Day [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt maturity date | Aug. 10, 2024 | ||||
Proceeds from notes payable | $ 200 | ||||
Accrued interest | 24 | ||||
Notes payable | $ 224 | ||||
Black Ice Advisors LLC [Member] | Unsecured Note Payable 60 Day [Member] | Rule 144 Restricted App Tech Common Stock [Member] | |||||
Debt Instrument [Line Items] | |||||
Stock issued shares, other | 30,000 |
RIGHT OF USE ASSET (Details Nar
RIGHT OF USE ASSET (Details Narrative) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Oct. 31, 2023 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Rent expense | $ 37 | $ 36 | |
Lease Agreement [Member] | |||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Lease term | 20 months |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) $ in Millions | 1 Months Ended | 24 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Infinios Capitalized Software Development [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Asset impairment charge | $ 6.1 | |
Infinios Financial Services [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Payment of engagement fee | $ 1.8 | |
Stock issued new, shares | 2,347,905 |
STOCKHOLDERS' EQUITY (Details -
STOCKHOLDERS' EQUITY (Details - Option activity) - Equity Option [Member] - $ / shares | 6 Months Ended | 12 Months Ended |
Jun. 30, 2024 | Dec. 31, 2023 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Options outstanding, beginning balance | 2,725,564 | |
Options outstanding, weighted average exercise price | $ 1.84 | |
Options outstanding, weighted average remaining years | 5 years 11 months 8 days | 4 years 25 days |
Options issued | 1,518,500 | |
Options issued, weighted average exercise price | $ 1.40 | |
Options exercised | 0 | |
Options exercised, weighted average exercise price | $ 0 | |
Options cancelled | (1,032,226) | |
Options cancelled, weighted average exercise price | $ 2.25 | |
Options outstanding, ending balance | 3,211,838 | 2,725,564 |
Options outstanding, weighted average exercise price | $ 1.50 | $ 1.84 |
Options vested | 1,661,841 | |
Options vested, weighted average exercise price | $ 1.21 | |
Options vested, weighted average remaining years | 8 years 21 days |
STOCKHOLDERS' EQUITY (Details_2
STOCKHOLDERS' EQUITY (Details - Assumptions) - Stock Options [Member] | 6 Months Ended |
Jun. 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 | $0.72 - $3.12 |
Expected volatility, minimum | 102% |
Expected volatility, maximum | 144% |
Expected term (in years) | 1.0 - 10.0 |
Risk-free interest rate, minimum | 3.84% |
Risk-free interest rate, maximum | 5% |
Expected dividend yields | 0% |
STOCKHOLDERS' EQUITY (Details_3
STOCKHOLDERS' EQUITY (Details - Warrant activity - Warrants [Member] - $ / shares | 6 Months Ended | 12 Months Ended |
Jun. 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 3 months 29 days | 3 years 9 months 29 days |
Number of shares, Cancelled | 0 | |
Weighted average exercise price, Cancelled | $ 0 | |
Number of shares, Issued | 0 | |
Weighted average exercise price, Issued | $ 0 | |
Number of shares, Outstanding at ending | 7,489,960 | 7,489,960 |
Weighted average exercise price, Outstanding at ending | $ 3.52 | $ 3.52 |
STOCKHOLDERS_ EQUITY (Details N
STOCKHOLDERS’ EQUITY (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||||||||
Apr. 04, 2024 | Mar. 26, 2024 | Oct. 31, 2023 | Oct. 26, 2023 | Aug. 31, 2023 | Feb. 28, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | 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 | 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 | 24,864,922 | 24,864,922 | 22,251,742 | ||||||||||
Proceeds from sale of common stock | $ 2,438,000 | $ 4,490,000 | |||||||||||
Interest Expense, Nonoperating | $ 32,000 | $ (3,000) | 35,000 | 43,000 | |||||||||
Stock or Unit Option Plan Expense | $ 325,000 | ||||||||||||
Options granted, shares | 1,518,500 | ||||||||||||
Share-Based Payment Arrangement, Noncash Expense | $ 1,040,000 | $ 1,673,000 | |||||||||||
Option expense | $ 865,000 | ||||||||||||
Warrants [Member] | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Class of Warrant or Right, Outstanding | 7,489,960 | 7,489,960 | 7,489,960 | ||||||||||
Sales Milestones [Member] | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Options unvested | 1,500,000 | 1,500,000 | |||||||||||
Equity Option [Member] | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Option exercise price | $ 1.50 | $ 1.50 | $ 1.84 | ||||||||||
Options, fair value per share | $ 1.21 | ||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross | 1,518,500 | ||||||||||||
Share-basec compensation amount remaining to be recognized | $ 7,000 | $ 7,000 | |||||||||||
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 | ||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross | 406,000 | ||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 0.86 | ||||||||||||
Share-Based Payment Arrangement, Noncash Expense | $ 349,000 | ||||||||||||
Board Of Directors And Consultants [Member] | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross | 112,500 | ||||||||||||
Board Of Directors And Consultants [Member] | Minimum [Member] | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Option exercise price | 1.70 | $ 1.70 | |||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | 0.76 | ||||||||||||
Board Of Directors And Consultants [Member] | Maximum [Member] | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Option exercise price | $ 2.165 | 2.165 | |||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 1.53 | ||||||||||||
Company Wide Grant [Member] | Equity Option [Member] | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross | 406,000 | ||||||||||||
Employee Severance [Member] | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Canceled options related to termination of former employee | $ 1,000,000 | $ 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 | 990,114 | 990,114 | |||||||||||
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, Nonoperating | $ 17,000 | ||||||||||||
Shelf Registration Statement [Member] | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Remaining amount for shelf registration | $ 52,700,000 | 52,700,000 | |||||||||||
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 | ||||||||||||
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 | 160,000 | 160,000 | |||||||||||
Stock issued for services, value | $ 175,000 | $ 382,000 | |||||||||||
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 |