EDGAR 10-K Filing

Company CIK: 1070050
Filing Year: 2025
Filename: 1070050_10-K_2025_0001683168-25-002130.json

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ITEM 1. BUSINESS
Item 1. Business
Business Overview
The financial services industry is going through a period of intensive growth driven by the advancement of technology and the rapid rise of contactless transactions due to societal changes. End-users expect ease of use and an enhanced user experience in all their daily financial interactions. In this rapidly evolving digital marketplace, businesses have broad and frequently changing requirements to meet consumer expectations and operational efficiencies to maintain their competitive edge.
To flourish in this environment, businesses need to adopt new technologies to engage, communicate and process payments and manage payouts with their customers from a supplier that widely supports innovation and adaptation as the industry evolves. We believe our technologies will greatly increase the adoption of omni-channel payments and digital banking solutions in sectors that must quickly adapt and migrate to new, secure digital Fintech technologies. By embracing advancements in the payment and banking industries, we are well-positioned to meet the growing needs of existing and prospective clients and intend for our current and future products to be at the forefront of solving these accelerated market needs.
AppTech’s all-in-one Fintech platform, FinZeo™, delivers best-in-class financial technologies and capabilities through an ever-evolving modular cloud/edge-based architecture. The FinZeo platform houses a large array of financial products and services that can be implemented off-the-shelf or customized via modern APIs. Within its FinZeo platform, AppTech offers Payments-as-a-Service (“PaaS”), Instant Bank Analysis, Automated Underwriting, and Banking-as-a-Service (“BaaS”).
FinZeo provides PaaS via integrated solutions for frictionless digital and mobile payment acceptance. These solutions provide advanced payment processing solutions by catering to the unique needs of each merchant. FinZeo’s PaaS solutions include ACH (automatic clearing house), credit & debit cards, eCheck, mobile processing, electronic billing, and text-to-pay. PaaS will also solve multi-use case, multi-channel, API-driven, account-based issuer processing for card, digital tokens, and payment transfer transactions.
AppTech is positioned to further accelerate digital transformation through BaaS, layered with financial management tools that empower financial institutions to provide businesses, professionals, and individuals with the ability to better manage their finances anywhere, anytime at a fraction of the cost of traditional banking and financial services. BaaS fosters an ecosystem of immersive and scalable digital financial management services, including FinZeo's groundbreaking automated underwriting portal. By digitizing the underwriting process, Automated Underwriting expedites business onboarding with its intuitive digital application and e-signature capabilities. This portal offers customizable pricing, risk models, and access to multiple processors, ensuring tailored solutions for diverse needs.
The FinZeo Portal empowers Independent Sales Organizations (“ISOs”) and Independent Software Vendors (“ISVs”) to seamlessly integrate their businesses, facilitating swift technology adoption. By leveraging the FinZeo, ISOs/ISVs can streamline operations and foster growth, meeting the economic demands of their merchants. Through personalized portals, ISOs/ISVs have the flexibility to select and integrate FinZeo payments and banking services, thereby enhancing their offerings to clients.
FinZeo has a flexible architecture and can be fully white labeled to allow for rich, personalized payment and banking experiences. This cloud-based platform packages together elements of AppTech’s intellectual property, BaaS, PaaS and FinZeo Portal to create a one-hub connection point of multitenant portals giving the merchant, ISO/ISV, and each customer a well-defined user experience.
Corporate Information
AppTech Corp. reincorporated in Delaware on December 23, 2021, and changed its name to AppTech Payments Corp. The Company’s principal executive offices are located at 5876 Owens Avenue, Suite 100, Carlsbad, California 92008. Its phone number is (760) 707-5959. Its website address is www.apptechcorp.com and www.finzeo.com. AppTech does not incorporate the information on or accessible through our website into this report. AppTech has included our website address in this report solely as an inactive textual reference.
Industry Background
The financial technology and payment processing industries have become crucial components of the global financial structure, constantly evolving due to technological advancements, shifting consumer behavior, and new business models. As digital transformation accelerates, sectors like Automated Clearing House (ACH) payments and card processing play a pivotal role in reshaping the payment landscape.
Automated Clearing House (ACH) Payments, the ACH network has experienced remarkable growth, both in the volume of transactions and their monetary value. In 2022, ACH processed 30 billion payments valued at $76.7 trillion, reflecting a 3% increase in transaction volume and a 5.6% rise in the transaction value from the previous year1. By 2023, The Clearing House’s ACH network had processed over 19 billion transactions worth $52.4 trillion, showing an 8% growth compared to 20222. Between 2018 and 2021, the dollar value of ACH payments grew at an annual rate of 12.7%, the highest growth rate recorded by the Federal Reserve Payments Study3. This continued growth of ACH payments is primarily driven by high-value transactions, subscription-based businesses, and e-commerce, all of which require efficient and low-cost payment systems to handle recurring transactions.
Card payment processing remain a dominant force in the global transaction landscape, with both general-purpose and private-label cards leading the charge. In 2022, the Federal Reserve Payments Study highlighted the large volume of card payments, underscoring their significant role in consumer transactions. By 2023, card payments continued to be the most widely used payment method, both for consumer and business transactions. This market continues to evolve, driven by the growing demand for contactless and instant payment methods, which are pushing the adoption of card-based payments on a global scale.
The fintech sector is expanding rapidly, spurred by technological advancements and regulatory changes. Between 2024 and 2032, the fintech industry is projected to grow at a compound annual growth rate (CAGR) of 16.5%4. Within this sector, digital banking-including FDIC-insured neobanks offering banking-as-a-service-is expected to reach a value of $2.6 trillion by 2027, with over 78 million users. Neobanks are disrupting traditional banking models by providing digital-first financial services, often lowering costs and enhancing the customer experience. This growth is expected to continue, especially among younger, tech-savvy consumers.
Small credit unions are increasingly adopting digital payment solutions to meet the changing demands of consumers. As of mid-2024, 11% of credit unions have incorporated open banking payment options, signaling a growing trend toward advanced payment solutions5. Digital transformation is enabling credit unions to attract and retain members by offering secure and convenient digital payment services6. To remain competitive in the rapidly evolving financial landscape, many small credit unions are forging partnerships with fintech companies to enhance their digital payment offerings.
The digital payments ecosystem presents significant revenue opportunities, especially through mobile wallets and ACH systems. PwC’s consumer research estimates a revenue opportunity of $60 billion for digital payment ecosystems⁶. As digital payments become more integrated into everyday financial transactions, businesses and financial institutions are eager to capture a larger share of this rapidly expanding market.
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1 Federal Reserve Payments Study (FRPS) - July 202
2 The Clearing House, ACH Report - March 2024
3 Federal Reserve Payments Study (FRPS) - 2023
4 Statista: Digital & Trends - Neobanking US Report - 2023
5 CUInsight: Credit Unions Adopting Open Banking Payments - 2024
6 PwC Global Consumer Insights Survey - 2021
Our Competitive Strengths
We believe our adaptable technology and product offerings differentiate us from our competitors. Our products and solutions help to eliminate much of our sector’s reliance on legacy payment rails and financial systems. The design and delivery are not being restricted by antiquated foundational technology. Management believes the applicability and frictionless nature of our products will offer an immediate impact on the digital financial services industry. Further, the solutions we intend to deliver to our clients will be driven off user-centered design principles to providing seamless, best-in-class experiences to the end-user.
Digital transformation is complex for most companies sighting such concerns around shifting company culture, legacy systems, rigidity of platforms and processes, and inefficiencies in skill sets and knowledge. Additionally, even when these companies see the value in digital transformation, often these companies face an inability to properly shift resources to new technology while maintaining customers on existing platforms. Non-discretionary spend required to “keep the lights on” outweighs leadership’s ability to invest in future technology, which results in vulnerabilities and competitive threats.
Our financial services platform was built to empower our clients with an extensible, adaptable framework capable of dynamically solving challenges found across the financial services industry. Further, this ability will allow us to drive deeply and expediently into specific market segments to solve problems that we find to be a continued burden on our client’s and their customer base. Based on market, client and end-user research and discovery, it is expected that these unique solutions produced for client’s will be highly leverageable across these segments to deliver experiences at scale while producing rapid revenue and profitability.
As we increase our client base and deployment of solutions to meet our client’s specifications, we’ll continue to grow these “off-the-shelf” experiences that will ultimately lower our development costs while increasing speed to market. In addition, we are positioned to utilize this model to grow industry partnerships and app marketplace plugins thus further leveraging our capabilities and market reach.
Founded on a modern core platform backed by an intelligent financial technology framework, our ability to rapidly deploy solutions and experiences that are otherwise cumbersome, expensive and often fall short of expectations will prove successful. Our position is to penetrate deep into certain segments to build a model that will directly drive growth. Gaining robust insights in these segments while delivering best-in-class experiences will also produce future opportunities to expand our off-the-shelf solutions to other verticals or sub-verticals that are challenged with solving similar problems.
While our core foundational platform will continue to adapt and grow based on new innovations, we are launching into the market an extremely robust and innovative set of secure digital banking and payments features and functionality. This will allow us to quickly deliver the future of digital finance to meet the demands of the markets we intend to serve without the deployment burdens encumbering the market today.
Additionally, the patent protection for some of our products is uncommon within the Fintech industry. This protection prevents competitors from replicating our products to carve away at our anticipated market share. Therefore, backing our text payment and lead generation products with patents strengthens the viability of such products by limiting direct competition and strengthening strategic partnerships. It is expected that we will also expand our patent portfolio through new innovations and acquisitions.
Our Growth Strategy
We intend to grow by leveraging our existing IP, continually developing products and solutions, establishing strategic partnerships and seeking selective acquisitions that uniquely complement our core business to meet growing market demand. From traditional merchant accounts to customizable inbound and outbound payment solutions, we intend to modernize and enhance the payment processing and digital banking capabilities for businesses throughout the world. Our business objective is to generate revenue based on licensing and subscription fees, transactional processing fees, product line growth, and continual advancement of our IP portfolio.
Our target market is forward-thinking financial institutions, technology companies, and Small to Medium Enterprises (“SME”) seeking to broaden their distribution through the addition of digital omnichannel payments and digital banking technologies. We will serve these markets by reducing integration complexity and streamlining their integrated financial services capabilities.
SMEs generally lack the resources of large enterprises to invest heavily in technology. As a result, they are more dependent on service providers, like AppTech, to handle critical functions including payment acceptance and other support services and are likely to be early adopters of new services that will further increase their efficiency and drive growth. Additionally, we are targeting financial institutions looking to maintain their ability to compete by digitizing their financial services offerings to meet market demand. By enhancing their customer’s user experience through the development of innovative and user centric multi-channel digital financial products, they will be able to maintain customer loyalty.
We intend to support a multi-method distribution model to achieve our vision. By providing delivery flexibility, we can rapidly engage and develop the right go-to-market strategies. As previously mentioned, not only are off-the-shelf solutions available, but we also offer embedded experiences that can be deployed using a growing portfolio of Open and Private APIs for developers to build unique experiences based on business cases and requirements.
Further, by offering clients a full array of marketing technology services, omnichannel payments and digital banking technologies, we will enable them to better interact with their customers and provide additional, dynamic means of processing both inbound and outbound financial transactions.
Businesses’ financial technology needs are increasingly complex. As electronic and mobile commerce continues to grow, businesses have no alternative but to use technology to better meet customer’s expectations. We believe that delivering innovative, adaptive, scalable, and operationally efficient products that meet their financial services needs will result in rapid market penetration for our anticipated product launches.
While leveraging new technology is vital to our growth plan, it is equally important that the technology is relevant and seamlessly fits into and benefits our end-user’s daily lives. Consumers are sometimes reluctant to alter their typical routines, especially when it relates to financial services. The launch of our payment system and broader digital banking solutions will meet both needs. We will offer financial technologies that do not rely on legacy rails, thus increasing the opportunity to improve the end-user’s digital experiences. Once properly developed and rolled out, we anticipate rapid adoption.
We seek to grow our business by pursuing the following strategies:
· Increasing our customer base by offering unique and compelling, patent protected technology solutions;
· Driving growth in our merchant services business through new and flexible technologies that will enable our customers to adapt to a rapidly changing marketplace;
· Rolling-out our API-driven, account-based, issuer processing solution for card, digital token, and payment transfer transactions that will enable us to target multi-currency and multi-channel digital banking and embedded B2B payment opportunities;
· Providing advanced technology to our clients to engage end-users via lead generation and text marketing services to enable businesses to better communicate with their customers and integrate our full suite of products;
· Maintaining technological leadership by continuing to innovate and improve our scalable, extensible, cloud-based technology;
· Pursuing strategic acquisitions, investments, or partnerships to complement and bolster our suite of Fintech products;
· Creating cross-selling synergies through white-labeling or SaaS distribution enabling us to provide a holistic suite of products and services to financial institutions, technology companies, and SMEs;
Our market growth strategies will focus on the following elements: (1) new product development and delivery (2) market penetration (3) market expansion (4) IP, strategic acquisitions, and partnerships.
It is imperative that upon entrance into the market with the new platform, we focus on delivering an enhanced experience to our existing digital client base. As we roll this out, we will also continue discussions with our current and continually evolving pipeline of prospects to understand these opportunities and the value that we can bring to solve their needs. This strategy also provides growth opportunities with these clients, increases customer satisfaction and potential referrals, and produces valuable feedback into our product prioritization and roadmap.
Maintaining focus to deliver our technology to selective target market segments also allows us to deliver a deeper, more targeted set of solutions and experiences. In turn this will grow our knowledge within these select segments that will translate into further innovation and market penetration.
This continual development process will contribute to our overall strategy of delivering new, innovative technologies and solutions. It is expected that bringing these to market will expand opportunities in complimentary and new market segments. Given the Platform’s flexibility and a la carte capabilities, adapting these solutions and delivering new experiences is a core tenant to growth.
In addition, core to our values and strategy is the opportunity for growth through intellectual property. This is inclusive of the existing patent portfolio while also coupled with future innovation. It is also important to continually evaluate new technologies, market entrants and complimentary solutions to ensure continued growth. We expect that this will include strategic acquisitions of complimentary offerings and portfolio customers, while also focusing on strategic partnerships where we find synergy in our vision.
With years of Fintech experience and a deep understanding of the industry, management believes we can leverage this expertise, industry contacts and past clients to accelerate market penetration. Engaging individuals with the ability to integrate our products may prove invaluable. Further, through our channel partnerships, we have an expansive network of potential clients that continue to show interest in our strategy and opportunity to embed our financial technologies into their solutions.
Management believes there are substantial opportunities in emerging and developing markets for our anticipated products. Our payment systems and digital banking solutions offer innovative avenues to unbanked and under banked communities to transact and provide remittances. Further, since internet connectivity is not required for our text payment solution, individuals with limited internet access will still be able to transact. These two factors could open our products to markets with immense growth potential.
Our Products and Services
We offer Fintech solutions that empowers financial institutions and enterprise brands to deliver “best-of-breed” B2B (Business to Business) and B2C (Business to Consumer) experiences through our revolutionary all-in-one platform and deployment model. Our modular platform will seamlessly integrate with legacy and cloud platforms to power a multitude of commerce experiences, including digital payments, financial wellness and more.
Merchant Services
Our core historical business is merchant transaction services. We create revenue by processing payments for credit and debit cards via point of sale (“POS”) equipment, eCommerce gateways, periodic ACH payments and gift & loyalty programs. We currently support over 150 merchants representing dozens of market verticals in managing their financial transactions.
Each merchant has unique needs for payment processing. As a result, we have a variety of processing partners to meet each merchant’s requirements. In addition to these needs, we take into consideration certain aspects of each business in choosing the optimal processing partner including risk, volume, customer service, integration capabilities, product features and profitability.
Digital Financial Technology Platform consisting of Omnichannel Payments and Digital Banking
To power commerce experiences, our digital financial technology platform incorporates two distinct product pillars: (1) omnichannel digital payments featuring patented payment technology and (2) digital banking capabilities. The omnichannel payments pillar will consist of several stand-alone solutions, including hosted ecommerce checkout, a flexible payment gateway, patented payment technology, alternative payment methods (“APMs”), as well as mobile and contactless payments. The FinZeo Platform’s digital banking pillar will supply financial institutions with technology to give their customers - businesses, professionals, and individuals the ability to better manage their finances anywhere, anytime and at a fraction of the cost of traditional banking and financial services.
Developing and deploying customized commerce experiences runs atop the Platform stack. This will include 1) open and private payment and digital banking APIs, 2) select third-party APIs centered on personalization and automation, 3) white labeling 4) online collaboration and development tools, and 5) optional professional services engagement and support.
Similar to experience-focused offerings, our FinZeo Platform powers immersive content, conversion, marketing automation, payment, and value transfer capabilities for nearly every online and offline shopping, banking, and financial services scenario. Additionally, our Platform experiences can be taken off-the-shelf or tapped into via modern APIs to build and embed fully branded and customizable experiences.
In many cases, our products and services are both available off-the-shelf or through embedded commerce experiences. For example, our patented payment capabilities can be licensed off-the-shelf, so our clients can take advantage of quick market entry while doing this without any lifting or technical requirements. Alternatively, payment capabilities and feature sets are available via our open APIs so businesses can embed and customize the experience, i.e. alter the onboarding experience and subscription triggers.
Our white-label, digital banking technology platform with payment capabilities will equip financial institutions (“Fis”), technology providers and brands with a digital “bank-in-a-box” - also referred to as our Banking-as-a-Service (BaaS) product. Furthermore, our Platform will enable multi-channel, pure digital financial services products unlike many other providers in the world. It incorporates a “plug-and-play” capability to facilitate deep integration with payment gateways, POS merchant services, alternative payment mechanisms, open-banking, ERP (“Enterprise Resource Planning”), Customer Relationship Management (“CRM”) and web and mobile user interfaces to form an end-to-end, embedded, payment acceptance and digital banking solution that drives innovative and disruptive digital distribution products. Anticipated products include:
· Neo-Banking for consumers and SMEs;
· Embedded B2B and consumer virtual payments (“VCNs”);
· P2P money transfer;
· Payroll, expenses, management and B2C and government to consumer (“G2C”) disbursements;
· Treasury management;
· Any other product that requires a prepaid or credit balance to be held and transacted upon.
Other attributes to our FinZeo Platform will include:
· Patented Technology including a Text-to-Pay patent that enables B2B, B2C and P2P payments via SMS, mobile push, email and other forms of embedded links. Combined with four mobile-to-computer messaging and lead generation patents, we can enable financial institutions, technology companies and businesses to unlock innovative customer experiences.
· Personalization and User Experience are also at the core of our Platform. Through marketing automation capabilities, our Platform will provide an industry first online-to-offline customer attribution capability. Licensees of our Platform will be able to link their customer’s online behavior to their buying preferences in real-time in order to personalize the selling and buying experience, streamline checkout and improve conversion rates.
· Automation is delivered through our APIs to unlock automated financial transactions and customer experiences. For example, our Platform can be simply configured to create many types of automated customer benefits and incentives including instant cashback or added-value promotions. Further, our Platform will be easily leverageable to create similar money saving experiences like round ups, i.e., rounding to the nearest dollar and depositing the difference between the purchase price and round-up into a digital bank account.
· Integration and Embedded Payments are central functions of our Platform. As such, we offer developers and enterprises an open platform with flexible rest APIs to build new payment and financial transaction features in SaaS and cloud apps or create compelling new digital financial services user experiences from scratch.
Our Platform continues to be developed including integration, testing and proper technical certifications before market readiness and client delivery. We expect that our Platform will continue to evolve as discussed to continually provide ongoing improvements, new features and functions and improved opportunities to deliver best in class experiences to the markets we serve.
Employees
As of the date of this annual report, we have nine full-time employees. In addition to our employees, we utilize various consultants and contractors for other services on an as-needed basis.

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ITEM 1A. RISK FACTORS
Item 1A. Risk Factors
As a smaller reporting company, as defined in Rule 12b-2 of the Exchange Act, we are not required to provide the information required by this Item.

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ITEM 1B. UNRESOLVED STAFF COMMENTS
Item 1B. Unresolved Staff Comments
Not applicable.

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ITEM 2. PROPERTIES
Item 2. Properties
Corporate headquarters is located at 5876 Owens Avenue, Suite 100, Carlsbad, CA 92008, consisting of approximately 3,000 square feet of leased office space. As of December 31, 2024, the Company also leases office space in Austin, Texas. The Company does not own any real property.

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ITEM 3. LEGAL PROCEEDINGS
Item 3. Legal Proceedings
NCR Litigation
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. On March 11, 2024, both parties agreed to dismiss the lawsuit. There was no impact to the Company’s financial statements.
Infinios Financial Services Litigation
On October 1, 2020, the Company entered into a strategic partnership with NEC PAYMENTS B.S.C., which subsequently became Infinios Financial Services B.S.C. (“Infinios”).
On May 4, 2023, the Company notified Infinios of its intent to terminate its relationship and commenced a good-faith negotiation with Infinios.
In October 2023, the Company and Infinios entered arbitration.
As of December 31, 2024, the parties settled the lawsuit under a confidential Settlement Confirmation letter whereby the terms of the Settlement Agreement and Mutual Release were fulfilled. Under the settlement, no payments were exchanged between the parties, and both the anti-dilution liability and the payable owed to Infinios of $72 thousand and $249 thousand, respectively, were fully extinguished. The matter is closed.
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 settlement amount was accrued for at December 31, 2024.

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ITEM 4. MINE SAFETY DISCLOSURE
Item 4. Mine Safety Disclosures
Not applicable.
PART II

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ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY
Item 5. Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities
Our common stock has been registered with the SEC since 1999. We successfully uplisted to NASDAQ on January 7, 2022 under the symbol “APCX”. Our warrants are listed under the symbol “APCXW”. The Company joined the Russell Microcap® Index at the conclusion of the 2023 Russell Indexes annual reconstitution, effective after the US market opened on June 26, 2023.
Stockholder Data
As of March 31, 2025, 33,283,329 shares of our common stock were outstanding and held of record by 5,611 stockholders, and 14 shares of preferred stock held by 11 shareholders were outstanding.
Dividends
We have not declared or paid any cash dividends on our common stock since our inception.
Equity Compensation Plan
For information regarding securities authorized under the equity compensation plan, see Item 12.
Recent Sales of Unregistered Securities
In 2024, we did not sell any shares of stock that were not registered under the Securities Act of 1933, as amended, other than those sales previously reported in a Current Report on Form 8-K.

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ITEM 6. SELECTED FINANCIAL DATA
Item 6. RESERVED

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be read together with the audited consolidated financial statements and related notes included elsewhere in this report. Certain statements contained in this report, including statements regarding the anticipated development and expansion of our business, our intent, belief or current expectations, primarily with respect to the future operating performance of our company and the products and services we expect to offer and other statements contained herein regarding matters that are not historical facts, are “forward-looking” statements. Our Management’s Discussion and Analysis contains not only statements that are historical facts, but also forward-looking statements which involve risks, uncertainties, and assumptions. Because forward-looking statements are inherently subject to risks and uncertainties, our actual results may differ materially from the results discussed in the forward-looking statements.
Business Overview
The financial services industry is going through a period of intensive growth driven by the advancement of technology and the rapid rise of contactless transactions due to societal changes. End-users expect ease of use and an enhanced user experience in all their daily financial interactions. In this rapidly evolving digital marketplace, businesses have broad and frequently changing requirements to meet consumer expectations and operational efficiencies to maintain their competitive edge.
To flourish in this environment, businesses need to adopt new technologies to engage, communicate and process payments and manage payouts with their customers from a supplier that widely supports innovation and adaptation as the industry evolves. We believe our technologies will greatly increase the adoption of omni-channel payments and digital banking solutions in sectors that must quickly adapt and migrate to new, secure digital Fintech technologies. By embracing advancements in the payment and banking industries, we are well-positioned to meet the growing needs of existing and prospective clients and intend for our current and future products to be at the forefront of solving these accelerated market needs.
AppTech’s all-in-one Fintech platform, FinZeo™, delivers best-in-class financial technologies and capabilities through an ever-evolving modular cloud/edge-based architecture. The FinZeo platform houses a large array of financial products and services that can be implemented off-the-shelf or customized via modern APIs. Within its FinZeo platform, AppTech offers Payments-as-a-Service (“PaaS”), and Banking-as-a-Service (“BaaS”).
FinZeo provides PaaS via integrated solutions for frictionless digital and mobile payment acceptance. These solutions provide advanced payment processing solutions by catering to the unique needs of each merchant. FinZeo’s PaaS solutions include ACH (automatic clearing house), credit & debit cards, eCheck, mobile processing, electronic billing, and text-to-pay. PaaS will also solve for multi-use case, multi-channel, API-driven, account-based issuer processing for card, digital tokens, and payment transfer transactions.
AppTech is positioned to further accelerate digital transformation through BaaS, layered with financial management tools that empower financial institutions to provide businesses, professionals, and individuals with the ability to better manage their finances anywhere, anytime at a fraction of the cost of traditional banking and financial services. BaaS fosters an ecosystem of immersive and scalable digital financial management services, including FinZeo's groundbreaking automated underwriting portal. By digitizing the underwriting process, Automated Underwriting expedites business onboarding with its intuitive digital application and e-signature capabilities. This portal offers customizable pricing, risk models, and access to multiple processors, ensuring tailored solutions for diverse needs.
The FinZeo Portal for Independent Sales Organizations (ISOs) and Independent Software Vendors (ISVs) to seamlessly integrate their businesses, facilitating swift technology adoption. By leveraging the FinZeo portal, ISOs/ISVs can streamline operations and foster growth, meeting the economic demands of their merchants. Through personalized portals, ISOs/ISVs have the flexibility to select and integrate FinZeo payments and banking services, thereby enhancing their offerings to clients.
FinZeo has a flexible architecture and can be fully white labeled to allow for rich, personalized payment and banking experiences. This cloud-based platform packages together elements of AppTech’s intellectual property, BaaS, and PaaS to create a one-hub connection point of multi-tenant portals giving the merchant, ISO/ISV, and each customer a well-defined user experience.
Financial Operations Overview
The following discussion sets forth certain components of our statements of operations as well as factors that impact those items (in thousands, except per share data).
Revenues
Our Revenues. We derive our revenue by providing financial services to businesses.
Licensing Revenue
The Company is actively pursuing strategic partnership agreements that license our technology for a fee. The licensing fee is deferred and recognized over the term of the service period or contract.
Merchant Processing Services
The Company provides merchant processing solutions for credit card and ACH transactions. We act as an intermediary between merchants, who initiate transactions and banks that process them. We collect either a flat fee, a fee for each transaction, and or a fee calculated as a percentage of its value, from both credit cards and ACHs. Revenue is recognized when transactions are processed by banks or at month-end based on the processing activity. Payments to channel partners are deducted from revenue.
Accrued Residuals
The Company pays commissions to independent agents who refer merchant accounts. The amounts payable to these independent agents is based upon a percentage of the amounts processed by these merchant accounts.
Expenses
Cost of Revenue. Includes costs directly attributable to processing and other services the Company provides. These also include related costs such as residual payments to our business development partners, which are based on a percentage of the net revenue generated from client referrals.
General and administrative. Include salaries, professional services, software costs, regulatory expenses, stock-based compensation, rent and utilities, and other operating costs.
Research and development. Includes the internal and outsourced services costs incurred to maintain and further develop the FinZeo platform, and the development of additional technology needed to pursue new product offerings.
Other income (expenses). Consists of interest on outstanding indebtedness, the change in value of derivative liabilities, and the gain/loss on debt extinguishment.
Results of Operations
This section includes a summary of our historical results of operations, followed by detailed comparisons of our results for the years ended December 31, 2024 and 2023, respectively. We have derived this data from our annual consolidated financial statements included elsewhere in this report.
The following table presents our historical results of operations for the periods indicated:
Years ended December 31 Change
($ in thousands) Amount %
Revenue $ 276 $ 504 $ (228 ) (45% )
Cost of revenue (135 ) (72% )
Gross profit (93 ) (29% )
Operating expenses
General and administrative 7,794 9,873 (2,079) (21% )
Research and development 1,977 3,498 (1,521 ) (43% )
Impairment of Intangible assets - 6,131 (6,131 ) (100% )
Total operating expenses 9,771 19,502 (9,731 ) (50% )
Loss from operations (9,547 ) (19,185 ) 9,638 (50% )
Other income (expenses)
Interest expense, net (646 ) (52 ) (594 ) NM
Change in fair value of derivative liability - (27 ) (100% )
Other income 1,260 81%
Total other income (59 ) 9%
Loss before income taxes (8,933 ) (18,512 ) 9,579 52%
Provision for income taxes - - - -
Net loss $ (8,933 ) $ (18,512 ) $ 9,579 52%
Revenue
Revenue was approximately $276 thousand for the year ended December 31, 2024, compared to $504 thousand for the year ended December 31, 2023, representing a decrease of 45%. The decrease was principally driven by the cancellation of a licensing arrangement and a reduction in legacy processing revenue.
Cost of Revenue
Cost of revenue was approximately $52 thousand for the year ended December 31, 2024, compared to $187 thousand for the year ended December 31, 2023, representing a decrease of 72%. The decrease was principally driven by lower transaction volume.
General and Administrative Expenses
General and administrative expenses decreased 21% to approximately $7,794 thousand for the year ended December 31, 2024, from $9,873 thousand in 2023. The reduction was mainly due to lower salaries following the Company’s restructuring plan and a $1,240 thousand decrease in stock-based compensation for 2024.
Research and Development Expenses
Research and development expenses were approximately $1,977 thousand for the year ended December 31, 2024, compared to $3,498 thousand for the year ended December 31, 2023, representing a decrease of 43%. The decrease was primarily due to less stock-based compensation and the capitalization of specific software development costs.
Other Income (Expenses)
Interest Expense, net
Interest expense, net was approximately $646 thousand and $52 thousand for the years ended December 31, 2024 and December 31, 2023, respectively, representing an increase of $594 thousand. The increase was primarily due to the amortization of the debt discount.
Change in Fair Value of Derivative Liability
Change in fair value of derivative liability was approximately $0 for the year ended December 31, 2024, compared to $27 thousand for the year ended December 31, 2023, representing a decrease of 100%. The decrease was primarily due to the Company's settlement of the notes and warrants that contained the embedded derivative liabilities in April 2023.
Other income (expenses)
Other income was approximately $1,260 thousand for the year ended December 31, 2024, compared to approximately $698 thousand for the year ended December 31, 2023, representing an increase of $562 thousand or 81%. The increase was primarily driven by a $1,245 thousand gain from extinguishment of debt related to 2024, less the $430 thousand gain from the cancellation of stock repurchase liabilities and gain of $250 thousand from extinguishment of debt related to 2023.
Liquidity and Capital Resources
The Company routinely evaluates its immediate working capital needs and liquidity sources. For the years ended December 31, 2024 and 2023, the Company maintained its liquidity sources primarily through cash and cash equivalents, and proceeds received from various registered offerings such as public registered offerings and “at-the-market” offerings (ATM). Additionally, we used equity and equity-linked instruments to pay for services and compensation.
Cash and cash equivalents at December 31, 2024 and 2023 were $868 thousand and $1,281 thousand, respectively.
During the year ended December 31, 2024, we met our immediate cash requirements through existing cash balances, public offerings, “at-the-market” offerings (ATM), a debt financing, and a $2,500 thousand direct investment.
See Note 9 - Stockholders’ Equity.
Management's Plan to Address Going Concern Considerations
The Company has experienced recurring operating losses, primarily due to limited revenues. The Company's current financial conditions and recurring losses raise substantial doubt about its ability to continue as a going concern.
Management is actively pursuing additional funding options and is confident that its revenue streams will begin generating revenue in the following twelve months from the issuance date of these financial statements.
Management intends to maintain adequate working capital and adhere to prudent financial forecasting. In December 2024, Management began implementing comprehensive expense reduction strategies across the Company’s operations to enhance financial stability.
Cash Flows
The following table presents a summary of cash flows from operating, investing and financing activities ($ in thousands):
Net cash used in operating activities $ (7,457 ) $ (8,859 )
Net cash used in investing activities $ (1,159 ) $ (500 )
Net cash provided by financing activities $ 8,203 $ 7,178
Cash Flow from Operating Activities
Net cash used in operating activities during the year ended December 31, 2024 was approximately $7,457 thousand, which is comprised of (i) our net loss of $8,933 thousand, adjusted for non-cash expenses totaling $2,175 thousand (which includes adjustments for equity-based compensation, depreciation and amortization), and (ii) is decreased by changes in operating assets and liabilities of approximately $699 thousand.
Net cash used in operating activities during the year ended December 31, 2023, was approximately $8,859 thousand, which is comprised of (i) our net loss of $18,512 thousand, adjusted for non-cash expenses totaling $10,306 thousand (which includes adjustments for equity-based compensation, depreciation and amortization), and (ii) is decreased by changes in operating assets and liabilities of approximately $653 thousand.
Cash Flow from Investing Activities
Net cash used by investing activities during the year ended December 31, 2024 was approximately $1,159 thousand. This expenditure was primarily attributable to capitalized software costs.
Net cash used by investing activities during the year ended December 31, 2023 was approximately $500 thousand. This expenditure was primarily attributable to an initial payment of $500 thousand related to the acquisition of FinZeo.
Cash Flow from Financing Activities
Net cash provided by financing activities during the year ended December 31, 2024 was approximately $8,203 thousand, driven by net proceeds received of $6,288 thousand through the issuance of common shares and warrants in our public offerings, $1,010 thousand proceeds received from exercise of warrants, and $910 thousand net proceeds received from convertible notes payable.
Net cash provided by financing activities during the year ended December 31, 2023 was approximately $7,178 thousand, driven by net proceeds received of $8,933 thousand through the issuance of common shares and warrants in our public offerings, $33 thousand proceeds received from exercise of stock options partially offset by repayment of loan and note payables of $1,788 thousand.
Critical Accounting Policies and Estimates
Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. Significant estimates include those related to the valuation of goodwill impairment and intangible assets. These estimates are based on historical experience and assumptions believed to be reasonable under current conditions. It's important to note that actual results could differ from these estimates.
Critical accounting policies are those that we consider the most critical to understanding our financial condition and results of operations. The accounting policies we believe to be most critical to understanding our financial condition and results of operations are discussed below. As of December 31, 2024, there have been no significant changes to our critical accounting estimates nor to our recently issued accounting pronouncements, except as described in Note 2 to our consolidated financial statements.
Business Combination
Recognition and Measurement: Companies must recognize the assets acquired, liabilities assumed, and any non-controlling interest in the acquiree at their fair value on the acquisition date.
Goodwill: Arises when the consideration transferred in a business combination exceeds the fair value of the net identifiable assets acquired. It represents future economic benefits arising from assets that are not individually identified and separately recognized.
Intangible Assets: Identifiable intangible assets, distinguishable either by separability from the acquired entity or through contractual or other legal rights, are valued and reported independently from goodwill. These assets include, but are not limited to, trademarks, customer relationships, proprietary technology, and patents. The fair value of these intangible assets is determined at the time of acquisition and is subject to subsequent impairment tests.
The fair value of identifiable intangible assets is estimated using income, market, or cost approach methods. The income approach, often applied through the discounted cash flow (DCF) method, involves projecting future cash flows attributable to the asset and discounting them to present value using a discount rate that reflects the risk associated with those cash flows. The estimation of fair value is inherently uncertain due to the assumptions and judgments involved in projecting future cash flows, determining appropriate discount rates, and estimating the useful life of each asset.
Over the reporting period, changes in market conditions, technological advancements, or strategic shifts in the business may necessitate revisions to the assumptions used in the valuation of identifiable intangible assets. Management closely monitors these factors and will adjust the valuation of intangible assets as appropriate, reflecting the impact of any such changes in our financial statements.
Contingent Consideration: Any contingent consideration, such as earn-outs, is measured at fair value at the acquisition date and can be adjusted in subsequent periods if the fair value changes.
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.
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 exceeds its carrying amount, and there is no significant risk of goodwill impairment based on current assumptions and market conditions.
Impairment of Long-Lived Assets
Our company evaluates long-lived assets, including capitalized software, for impairment when there are indicators that the carrying amount may not be recoverable. This process involves comparing the carrying amount to the expected future undiscounted cash flows from the asset. If the carrying amount exceeds the expected cash flows, an impairment charge is recognized to reduce the asset's carrying amount to its fair value.
Indicators of impairment include significant underperformance against projections, market or economic downturns, and technological obsolescence. The fair value is determined using market data or discounted cash flow models. An impairment loss is recorded as an expense immediately.
Smaller Reporting Company
As a smaller reporting company, as defined in Item(f)(1) of Regulation S-K, we may choose to prepare our disclosures relying on scaled disclosure requirements for smaller reporting companies in Regulation S-K and in Article 8 of Regulation S-X.
The scaled disclosure requirements for smaller reporting companies permit us (i) to include less extensive narrative disclosure than required of other reporting companies, particularly in the description of executive compensation and (ii) to provide audited consolidated financial statements for two fiscal years, in contrast to other reporting companies, which must provide audited consolidated financial statements for three years.
We may lose our status as a smaller reporting company on the last day of the fiscal year in which (i) our public float exceeds $250 million or (ii) if we have more than $100 million in annual revenues and (a) have no public float or (b) have a public float or more than $700 million.
Recent Accounting Pronouncements
As of December 31, 2024, there was no significant changes to our recently issued accounting pronouncements.
Off-Balance Sheet Arrangements
We do not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, that would have been established to facilitate off-balance sheet arrangements (as that term is defined in Item 303(a)(4)(ii) of Regulation S-K) or other contractually narrow or limited purposes. As such, we are not exposed to any financing, liquidity, market or credit risk that could arise if we had engaged in those types of relationships. We enter into guarantees in the ordinary course of business related to the guarantee of our own performance.
Equity-based Compensation
The Company records stock-based compensation in accordance with FASB ASC Topic 718, Compensation - Stock Compensation. FASB ASC Topic 718 requires companies to measure compensation cost for stock-based employee compensation at the fair market value on the grant date and recognize the expense over the employee’s requisite service period. The Company recognizes in the statement of operations the grant-date fair market value of stock options and other equity-based compensation issued to employees and non-employees.
During the years ended December 31, 2024, and 2023, 260,000 shares and 460,000 shares of common stock were issued to several consultants and employees in connection with business development, professional, and employment services with a value of $267 thousand and $906 thousand, respectively.
Related Parties
See Item 13 for a full discussion of related parties.

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Because we are allowed to comply with the disclosure obligations applicable to a “smaller reporting company,” as defined by Rule 12b-2 of the Exchange Act, with respect to this Annual Report on Form 10-K, we are not required to provide the information required by this Item.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Item 8. Financial Statements and Supplementary Data
The consolidated financial statements and related financial statement schedules required to be filed are indexed on page 24 and are incorporated herein.

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
Item 9. Changes in and Disagreements with Accounts on Accounting and Financial Disclosure
None.

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ITEM 9A. CONTROLS AND PROCEDURES
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including the Chief Executive Officer and the Chief Financial Officer, we evaluated the effectiveness of the design and operation of our “disclosure controls and procedures” (as defined in Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of December 31, 2024 due to the material weaknesses in our internal control over financial reporting as described below.
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim consolidated financial statements will not be prevented or detected on a timely basis.
Our management is also responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for us. Our management, including our Chief Executive Officer and Chief Financial Officer, evaluated, as of December 31, 2024, the effectiveness of our internal control over financial reporting using the framework in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on that evaluation, our management concluded that our internal control over financial reporting was not effective as of December 31, 2024.
The management has identified a material weakness in our internal control over financial reporting, primarily due to insufficient formal financial reporting policies and procedures resulting in material post-close adjustments.
Policies and procedures should be implemented to ensure that any significant events requiring disclosure are identified, accounted for, disclosed and reviewed by the management.
Changes in Internal Control over Financial Reporting
There have been no material changes in our internal controls over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the fourth quarter of 2024 that materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.
Limitations on the Effectiveness of Controls
Due to the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. Because of the inherent limitations in any control system, misstatements due to error or fraud may occur and not be detected.

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ITEM 9B. OTHER INFORMATION
Item 9B. Other Information
For the quarter ended December 31, 2024, there was no information required to be disclosed in a report on Form 8-K which was not disclosed in a report on Form 8-K.
During the quarter ended December 31, 2024, no director or officer adopted or terminated any “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

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ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Item 10. Directors, Executive Officers and Corporate Governance
The information required by this item regarding our executive officers will be presented under the caption “Executive Officers” in our Proxy Statement for the 2025 Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission within 120 days of the fiscal year ended December 31, 2024 (the 2025 Proxy Statement) and is incorporated herein by reference.
The information required by this item regarding our compliance with Section 16 of the Exchange Act of 1934, as amended, will be presented under the caption “Security Ownership of Certain Beneficial Owners and Management - Delinquent Section 16(a) Reports” in our 2025 Proxy Statement and is incorporated herein by reference.
The information required by this item regarding our audit committee will be presented under the caption “Corporate Governance - Board Committee - Audit Committee” in our 2025 Proxy Statement and is incorporated herein by reference.
The information required by this item regarding our code of ethics will be presented under the caption “Corporate Governance - Code of Business Conduct” in our 2025 Proxy Statement and is incorporated herein by reference. There is no material change.
The information required by this item regarding our insider trading policy will be presented under the caption “Insider Trading Policy” in our 2025 Proxy Statement and is incorporated herein by reference.

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ITEM 11. EXECUTIVE COMPENSATION
Item 11. Executive Compensation
The information required by this item regarding executive compensation will be presented under the caption “Executive Compensation” in our 2025 Proxy Statement and is incorporated herein by reference.
The information required by this item regarding director compensation will be presented under the caption “Corporate Governance - Director Compensation” in our 2025 Proxy Statement and is incorporated herein by reference.
The information required by this item regarding our compensation committee will be presented under the caption “Corporate Governance - Compensation Committee Interlocks and Insider Participation” in our 2025 Proxy Statement and is incorporated herein by reference.

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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The information required by this item regarding security ownership and certain beneficial owners and management will be presented under the caption “Security Ownership of Certain Beneficial Owners and Management” in our 2025 Proxy Statement and is incorporated herein by reference.
Equity Compensation Plan
The following table provides information, as of December 31, 2024, with respect to shares of our common stock that may be issued, subject to certain vesting requirements, under existing or future awards under our 2024 Equity Incentive Plan (“2024 Plan”). The 2024 Plan was approved by our Board of Directors and ratified by our shareholders at our 2024 Annual Shareholder Meeting.
A B C
Plan Category Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants, and Rights Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (A))
Equity compensation plans approved by security holders 1,841,157 $ 1.13 7 508,167
Equity compensation plans not approved by security holders - - -
Total 1,841,157 $ 1.13 508,167

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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Item 13. Certain Relationships and Related Transactions, and Director Independence
The information required by this item regarding certain relationships and related persons transactions will be presented under the caption “Certain Relationships and Related Persons Transactions” in our 2025 Proxy Statement and is incorporated herein by reference.
The information required by this item regarding director independence will be presented under the caption “Corporate Governance - Independent Directors” in our 2025 Proxy Statement and is incorporated herein by reference.

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ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Item 14. Principal Accountant Fees and Services
The information required by this item regarding aggregate fees billed to us by our independent registered public accounting firm’s fees will be presented in our 2025 Proxy Statement and is incorporated herein by reference.
The information required by this item regarding our audit committee’s pre-approval policies and procedures will be presented in our 2025 Proxy Statement and is incorporated herein by reference.
7 The weighted-average exercise price does not take into account restricted stock units, which do not have an exercise price.
PART IV

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ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
Item 15. Exhibits and Financial Statements Schedules
(a) The following documents are filed as part of, or incorporated by reference into, this Annual Report on Form 10-K:
1. Financial Statements. See Index to Financial Statements under Item 8 of this Annual Report on Form 10-K.
2. Financial Statement Schedules. All schedules have been omitted because the information required to be presented in them is not applicable or is shown in the financial statements or related notes.
3. Exhibits. We have filed, or incorporated into this Annual Report on Form 10-K by reference, the exhibits listed on the accompanying Exhibit Index immediately following the financial statements contained in this Annual Report on Form 10-K.
(b) Exhibits. See Item 15(a)(3) above.
(c) Financial Statement Schedules. See Item 15(a)(2) above.