Company: APCXW
Filing Date: 2025-11-13
Form Type: 10-Q
Source: 0001683168-25-008326
Chunk: 40

Company: AppTech Payments Corp.
Filing Date: 2025-11-13
Form: 10-Q
Item: Part II, Item 8
Chunk 40
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AP) of the
Company’s common stock for a specified period preceding conversion. Certain notes include provisions for fixed monthly
payments beginning after a defined period, and others permit early conversion at the lender’s discretion.

As of September 30, 2025, the aggregate principal
balance of these notes was approximately $1,020 thousand, and accrued interest totaled approximately $20 thousand.

NOTE 6 – RIGHT OF USE ASSET

Lease Agreement

In January 2020, the Company entered into a lease
agreement commencing February 8, 2020 for its corporate office in Carlsbad, California, which was set to expire in 2025. In December 2024,
the Company extended its lease for fourteen months through March 2026, with an option to extend for an additional fourteen months. At
inception of the lease, the Company recorded a right of use asset and liability. The Company used an incremental borrowing rate of 8.5%
within the calculation.

The rent expense was $59 thousand and $56 thousand
for the nine months ended September 30, 2025 and 2024, respectively.

NOTE 7 – COMMITMENTS AND CONTINGENCIES

The Company
may be involved in various claims and legal actions arising in the ordinary course of business. The Company establishes an accrued liability
for legal proceedings only when those matters present loss contingencies that are both probable and reasonably estimable.

Litigation with Former Employees

On May 3, 2024, the Company was sued by three
former employees over severance payments. On February 14, 2025, the Company filed a cross complaint against the plaintiffs for breach
of fiduciary duty and breach of contract. In March 2025, the Company settled its lawsuit for $172 thousand. The first payment of $86 thousand
was made in March 2025 and the second in May 2025.

Litigation with Former Law Firm

On March 13, 2025, Moses & Singer LLP filed
a case against AppTech Payments Corp. for unpaid fees of approximately $445 thousand with the American Arbitration Association. AppTech
has brought a counterclaim of legal malpractice for $800 thousand. Arbitration is confidential and ongoing; resolution is expected before
or by spring 2026. Invoices for fees and costs to date are reflected in accounts payable.

NOTE 8 – STOCKHOLDERS’ EQUITY 

Series A Preferred Stock

The Company is authorized to issue