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 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.

The Company was delisted to the middle tier of the Over-The-Counter Venture Market (“OTCQB”) on May 20, 2025. AppTech trades under the symbol “APCX” and its warrants trade under the symbol “APCXW”.

In June 2023, the Company entered into licensing agreements with InstaCash and PayToMe.co. The licensing arrangement with InstaCash was terminated in December 2024.

Purchase of Infinitus Pay, Inc.

On October 31, 2025 (the “Acquisition Date”), the Company acquired 100% of the outstanding equity interests of Infinitus Pay Inc., a provider of payment platform solutions, pursuant to a Stock Purchase and Share Exchange Agreement dated October 30, 2025. The acquisition was accounted for as a business combination in accordance with ASC 805, Business Combinations. The acquisition enhances the Company’s Banking-as-a-Service (BaaS) and digital commerce offerings by integrating IP’s technology platform and customer relationships.

The fair value of consideration transferred as of the Acquisition Date was as follows:

The fair value of the common stock was determined using the Company’s closing market price on the Acquisition Date.

The warrants were classified as equity and recorded within additional paid-in capital at their estimated fair value on the Acquisition Date. Fair value was determined using an option-pricing model incorporating assumptions for expected volatility, expected term, and risk-free interest rate. Because the warrants are equity-classified, they are not subject to subsequent remeasurement.

The contingent consideration represents a revenue-based earnout of up to $1,000 thousand payable in cash upon achievement of specified post-acquisition performance targets. The earnout was measured at fair value using a Monte Carlo simulation approach. The contingent consideration liability will be remeasured at fair value at each reporting date, with changes recognized in earnings.

Allocation of Purchase Price

The purchase price was allocated to the identifiable assets acquired and liabilities assumed based on their estimated fair values as of the Acquisition Date as follows. Net identifiable assets acquired totaled $1,760 thousand. Goodwill of $1,795 thousand was recognized as the excess of total consideration transferred over the fair value of net identifiable assets acquired. Goodwill primarily represents expected synergies from combining operations, the value of the assembled workforce, and anticipated future growth opportunities. Of the total intangible assets acquired of $3,504 thousand, $1,387 thousand related to software development which will be depreciated on a straight-line basis over a 5-year period.

The following unaudited pro-forma combined financial information is based on the financial statements of the Company and Infinitus Pay, Inc. There were no material proforma adjustments to record.

This contingent consideration liability is classified as a Level 3 fair value measurement; it is remeasured at each reporting date with changes in fair value recognized in earnings. The following table presents a rollforward of the liability for the period:

Liquidity and Going Concern Considerations

The Company has experienced recurring operating losses, primarily due to limited revenues and net cash used in operations. The Company's current financial conditions and recurring losses raise substantial doubt about its ability to continue as a going concern.

In late 2024, we reorganized senior leadership and initiated actions to reduce indebtedness to improve the current financial condition. In addition, we are actively pursuing additional funding options and are confident that our revenue streams will begin generating cash, although no assurances can be made.

Management continues to maintain adequate working capital and adhere to prudent financial forecasting.