Company: APCXW
Filing Date: 2025-05-14
Form Type: 10-Q
Source: 0001683168-25-003561
Chunk: 52

Company: AppTech Payments Corp.
Filing Date: 2025-05-14
Form: 10-Q
Item: Part I, Item 2
Chunk 52
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 our critical accounting estimates nor to our recently issued accounting pronouncements, except as
described in Note 2 to our consolidated financial statements.

Equity-Based Compensation: We estimate
the fair value of stock options granted using the Black-Scholes option pricing model, which requires input of subjective assumptions.
The model inputs include expected stock price volatility, expected term, risk-free interest rate, and dividend yield. The assumptions
about future stock price volatility and the option’s expected term involve significant judgments based on historical data and future
expectations. The reported equity-based compensation expense is sensitive to changes in the volatility assumption. An increase in expected
volatility could materially impact the amount of compensation expense recognized.

Goodwill Impairment 

Goodwill Impairment Testing: The process
requires an annual test for impairment of goodwill, and more frequent testing if certain indicators suggest that the goodwill might be
impaired. This assessment involves comparing the carrying amount of a reporting unit, including goodwill, to its fair value. Key estimates
in determining fair value include: a) Cash Flow Projections: Utilizing the DCF method, management estimates future cash flows based on
current performance, business plans, and expected market growth, introducing judgment due to forecasting uncertainties. b) Discount Rate:
The discount rate, reflecting the WACC and adjusted for unit-specific risks, is crucial for present value calculations, with changes significantly
affecting fair value estimations; c) Long-term Growth Rates: Assumptions on sustainable growth rates impact the terminal value in the
DCF model, thus influencing the overall fair value of the reporting unit.

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Impairment Loss Calculation: The impairment
loss, representing the excess of the carrying amount of goodwill over its implied fair value, is highly sensitive to the estimates and
assumptions used in the fair value calculation. Small changes in cash flow projections, discount rates, or long-term growth rates can
result in significant adjustments to the impairment loss recognized in the income statement. Given the dynamic nature of business conditions,
technological advancements, and market competition, estimates used in goodwill impairment testing may change from one period to another.
Management is tasked with regularly reviewing and updating these estimates to reflect the latest available information and market conditions.

Once an impairment loss is recognized, it is not reversible in subsequent
periods. This finality places additional importance on the accuracy and reasonableness of the underlying estimates and assumptions.

Management concluded that the fair value of the
goodwill recorded as part of the FinZeo acquisition significantly