Company: APCXW
Filing Date: 2025-11-13
Form Type: 10-Q
Source: 0001683168-25-008326
Chunk: 14

Company: AppTech Payments Corp.
Filing Date: 2025-11-13
Form: 10-Q
Item: Part I, Item 1
Chunk 14
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 the $250 thousand obligation to the bank
is recorded as a current liability and the accrued interest expense of $5 thousand is recorded in accrued expenses.

During the nine months ended September 30, 2025,
the Company entered into multiple unsecured convertible note agreements with third-party lenders, with principal amounts ranging from
approximately $300 thousand to $360 thousand, bearing stated interest rates of 10%, and original issue discounts ranging from $50 thousand
to $60 thousand. The notes have terms of six to twelve months, with maturities between December 2025 and August 2026.

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Each note may be converted into shares of
the Company’s common stock at a fixed conversion price of $2.00 per share, subject to adjustment in the event of default, at
which point the conversion price may be reduced to the lower of $2.00 and 80% of the volume-weighted average price (VWAP) 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 sever