v3.26.1
COMMITMENTS AND CONTINGENCIES
6 Months Ended
Jun. 30, 2026
Commitments and Contingencies Disclosure [Abstract]  
COMMITMENTS AND CONTINGENCIES

NOTE 8 – 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.

 

Lawsuit with Former Lawyers

 

On March 13, 2025, Moses & Singer LLP filed a case against AppTech Payments Corp. for unpaid fees of approximately $445 with the American Arbitration Association. AppTech has brought a counterclaim of legal malpractice for $800 thousand. On June 29, 2026, the arbitrator issued a final award denying the Company's legal malpractice counterclaim and awarding Moses & Singer LLP approximately $274 thousand, payable pursuant to an established payment schedule. The Company has accrued the legal fees and award, including applicable interest, in its consolidated financial statements.

 

Finzeo Seller Suit

 

On October 30, 2025, AppTech Payments Corp. filed a lawsuit in the United States District Court, Southern District of California, against the former owner of Finzeo (“Seller”) with claims for trade secret misappropriation, fraud, misrepresentation, conversion, unfair business practices, violation of California Penal Code section 502, and breach of contract. The litigation relates to AppTech’s acquisition of membership interests in a company and the company’s related product. The defendant has made claims of an offset based on alleged outstanding payments as part of the acquisition. On November 4, 2025, the Court entered an order approving the parties’ Stipulation re AppTech’s Motion for Temporary Restraining Order and Order, which enjoins Seller, and those acting in concert with him, from (1) disabling the FinZeo URL, (2) foreclosing upon a security agreement, and (3) disclosing AppTech’s proprietary and confidential information, among other relief, until the order is amended or superseded by Court order. Seller has a motion for leave pending before the court which, if granted, would allow him to assert counterclaims against AppTech, its Board of Directors, and two AppTech employees. Seller’s proposed Counterclaim includes claims based on alleged outstanding payments due to him as part of the acquisition, as well as other related claims.

 

As of July 28, 2026, Seller represents himself, in pro per. The case is currently in the discovery stage with fact discovery closing in August 2026, expert discovery closing in November 2026, and the final pretrial conference scheduled for April 15, 2027.