NOTES PAYABLE |
12 Months Ended |
|---|---|
Dec. 31, 2025 | |
| Debt Disclosure [Abstract] | |
| NOTES PAYABLE | NOTE 6 – NOTES PAYABLE
The Company has a 30-year unsecured note payable with the U.S. Small Business Administration. The note payable incurred a $100 fee upon issuance and incurs interest at 3.75% per annum. Payments totaling $4 thousand are due each year through the maturity date of July 1, 2050.
As of December 31, 2025 and 2024, the balance of the note payable was $59 thousand and $61 thousand, respectively.
See Note 3 – for a discussion of the notes payable related to the three-party agreement entered in April 2025.
On June 10, 2024, the Company entered into a 60-day unsecured note agreement with Black Ice Advisors, LLC, a third-party lender, for proceeds of $200 thousand and flat interest of $30 thousand. Additionally, the Company issued shares of AppTech Common Stock to the lender on June 17, 2024. On August 12, 2024, the outstanding balance of the note payable and accrued interest of $230 thousand, was repaid.
Convertible Note
During the year ended December 31, 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. In December 2025, the Company was granted a one-month extension on one of its original convertible notes with an original due date in December 2025, in return for paying an additional $2 thousand of interest. The note was paid off in January 2026. The two other convertible notes remain outstanding as of December 31, 2025.
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 December 31, 2025, the aggregate principal balance of these notes was approximately $783 thousand, and accrued interest totaled approximately $31 thousand.
On July 10, 2024, the Company issued a 6% convertible debenture ($1,100 thousand principal, sold for $1,000 thousand with a 10% discount) and a five-year warrant for common shares to an investor in a private placement. Net proceeds were $910,000 after fees, with commitment shares issued. The initial conversion price was $1.07 per share and the warrant exercise price was $1.16 per share. The conversion prices were reduced to $0.70 per share in August 2024 and $0.56 per share in November 2024 due to dilutive issuances, resulting in a $15,000 repricing charge. The warrant was fully exercised cashless for shares, and the debenture fully converted for shares in late 2024. The Company amortized the $579 thousand debt discount and recognized a $26 thousand interest expense in 2024. All obligations were satisfied as of December 31, 2024.
Related Party Liabilities
On October 21, 2025, the Company entered into a revenue participation agreement with a related party that committed to invest $1,500 thousand in three equal monthly installments beginning November 15, 2025 and ending January 15, 2026. In February 2026, the agreement was amended to increase the total committed investment to $2,000 thousand, including an additional $500 thousand contribution. Under the agreement, the Company is required to make monthly payments equal to a percentage of gross contract revenue. As amended, the participant is entitled to 1.75% of gross contract revenue, subject to increase up to 10% under certain conditions. Payments are due monthly and are subject to minimum payment requirements that increase periodically over the term of the agreement from $4 thousand to $73 thousand.
The agreement term commenced on November 1, 2025 and continues through December 31, 2029. The Company is required to make payments equal to the greater of the calculated revenue participation amount or the contractual minimum payment. The obligation is secured by a pledge of 10% of intellectual property-related revenues and 10% of the issued and outstanding equity of Infinitus Pay, Inc.
The Company is obligated to repay the $2,000 thousand contribution on a prorated basis over the final eighteen months of the agreement term.
The agreement includes (i) a participant put option, exercisable beginning December 31, 2027, requiring repayment at an amount that provides a 20% internal rate of return, and (ii) a Company call option permitting early termination subject to payment of a premium designed to provide a 28% internal rate of return. As of December 31, 2025, the balance of the participation liability was $1,000 thousand and interest expense of $4 thousand had been paid.
On October 29, 2025, we secured a $1,000 thousand loan with an interest rate of 24% with a current investor and board member. The note is interest-only for December 2025 to March 2026, and thereafter will be paid in full with ten equal payments of principal and interest ending on December 2026. The note is secured by our accounts receivable and 10% of the Infinitus Pay, Inc stock. As of December 31, 2025, the first interest payment of $20 thousand had been paid.
The current CEO is owed approximately $50 thousand related to expense reimbursements. The payable is recorded in accounts payable. The full amount remained outstanding as of December 31, 2025.
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