10-Q: AppTech Payments Reports Q3 Revenue Surge, Going Concern

AppTech Payments Corp. reported a significant increase in Q3 2025 revenue, driven by ISO and lending services, while actively addressing its going concern status and completing a strategic acquisition.

Summary

• Revenue for Q3 2025 increased by 428% to $227 thousand from $43 thousand in Q3 2024.
• Year-to-date revenue for the nine months ended September 30, 2025, grew by 228% to $735 thousand from $224 thousand in the prior year.
• Net loss for Q3 2025 was $(1,731) thousand, an improvement from $(2,025) thousand in Q3 2024.
• Year-to-date net loss for 2025 was $(6,232) thousand, an improvement from $(7,984) thousand in 2024.
• The company completed the acquisition of Infinitus Pay (IP) on October 31, 2025, to enhance product offerings and acquire its platform and book of business.
• Management acknowledged recurring operating losses and substantial doubt about the company's ability to continue as a going concern, outlining plans for additional funding and revenue generation.
• AppTech was delisted from Nasdaq to the OTCQB market on May 20, 2025, due to not meeting the minimum bid price requirement.

Sentiment

Score: 3

Explanation: While revenue growth is positive, the company faces significant challenges including recurring operating losses, a going concern warning, delisting from Nasdaq, declining cash and equity, and ineffective disclosure controls. The recent acquisition and capital raises provide some short-term relief but do not fully offset the fundamental financial instability and operational risks.

Positives

• Significant revenue growth: 428% increase in Q3 2025 and 228% increase year-to-date, primarily from ISO and lending revenue.
• Reduced net loss: Q3 2025 net loss improved to $(1,731) thousand from $(2,025) thousand in Q3 2024.
• Reduced year-to-date net loss: Net loss for the nine months ended September 30, 2025, improved to $(6,232) thousand from $(7,984) thousand in the prior year.
• Decrease in Selling, General, and Administrative expenses by 33% year-to-date, driven by lower professional fees, salaries, and stock-based compensation.
• Successful completion of the Infinitus Pay acquisition, expected to enhance product offerings and expand the book of business.
• Successful capital raising activities post-period end, including $1,000 thousand from AFIOS Partners and a $1,000 thousand loan from an investor/board member, and a $1,500 thousand participation agreement.

Negatives

• Recurring operating losses continue to raise substantial doubt about the company's ability to continue as a going concern.
• Delisted from Nasdaq to the OTCQB market due to failure to meet the $1.00 minimum bid price requirement.
• Cash and cash equivalents decreased to $439 thousand at September 30, 2025, from $868 thousand at December 31, 2024.
• Total stockholders' equity significantly decreased to $1,416 thousand at September 30, 2025, from $5,467 thousand at December 31, 2024.
• Total liabilities increased to $4,830 thousand at September 30, 2025, from $3,519 thousand at December 31, 2024.
• Disclosure controls and procedures were deemed not effective as of September 30, 2025.
• High customer concentration: 53% of accounts receivable and 68% of revenue for the nine months ended September 30, 2025, came from two customers, posing a significant risk if one is lost.
• Increased Research and Development expenses by $323 thousand in Q3 2025 and significantly year-to-date, indicating ongoing high investment without immediate profitability.

Risks

• Delays and uncertainty associated with boarding clients to the platform.
• Substantial investment and costs associated with new potential revenue streams and their corresponding contractual obligations.
• A slowdown or reduction in sales due to a reduction in end-user demand, unanticipated competition, regulatory issues, or other unexpected circumstances.
• Uncertainty regarding adverse macroeconomic conditions, including inflation, a recession, changes to fiscal and monetary policy, tighter credit, higher interest rates, consumer confidence and spending, and high unemployment.
• Dependence on third parties needed to facilitate automated clearing house (ACH) and merchant service capabilities.
• Delay in or failure to obtain regulatory approval for any future products in additional countries.
• Current and future laws and regulations impacting the business.
• High customer concentration, where the loss of a top customer would have a significant impact on the company's financials.
• The company's recurring operating losses raise substantial doubt about its ability to continue as a going concern.
• Ineffective disclosure controls and procedures.
• Ongoing legal proceedings, including arbitration with a former law firm for $445 thousand, with a counterclaim of $800 thousand for legal malpractice.

Future Outlook

Management is actively pursuing additional funding options and is confident that its revenue streams will begin generating cash in the following twelve months. The company intends to pursue an uplisting to a national exchange before the end of the fiscal year. Resolution for the legal arbitration with Moses & Singer LLP is expected before or by spring 2026. The acquisition of Infinitus Pay is anticipated to enhance product offerings and expand the book of business.

Management Comments

• "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."
• "Management remains committed to enhancing shareholder value and intends to pursue an uplisting to a national exchange before the end of the fiscal year."
• "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."

Industry Context

The financial services industry is undergoing rapid transformation driven by technological innovation, evolving regulatory environments for stablecoins and digital assets, and advancements in blockchain infrastructure. AppTech's FinZeo platform, offering Payments-as-a-Service (PaaS) and Banking-as-a-Service (BaaS), positions the company to capitalize on the growing demand for secure, adaptable digital Fintech solutions. The acquisition of Infinitus Pay aligns with the industry trend of consolidating capabilities to offer more comprehensive, integrated solutions for merchants, banking institutions, and businesses.

Management Changes

Corporate Governance

Legal Proceedings

• Settled a lawsuit with three former employees for $172 thousand in March 2025 regarding severance payments.
• Ongoing arbitration with Moses & Singer LLP, filed March 13, 2025, for $445 thousand in unpaid fees; AppTech has a counterclaim of $800 thousand for legal malpractice. Resolution expected by spring 2026.

Related Party Transactions

• A former senior member of the Company sits on PayToMe.co's board of directors, and AppTech's former Chief Financial Officer is married to its founder and Chief Executive Officer. The shares related to the 7.5% preferred share equity stake in PayToMe.co have not been issued.
• A $1,000 thousand loan was secured on October 29, 2025, from a current investor and board member.
• A participation agreement with a related party was entered into on October 21, 2025, for a $1,500 thousand investment.
• The current CEO provided a short-term, non-interest bearing loan of $50,000 on October 31, 2025.

Stakeholder Impact

• Shareholders: Significant dilution risk from ongoing equity issuances and warrants. The delisting to OTCQB reduces liquidity and investor confidence. The going concern warning poses a fundamental risk to investment value. Potential for future uplisting could be positive.
• Employees: Management changes and option grants/cancellations indicate ongoing restructuring. The settlement of former employee lawsuits addresses past disputes.
• Customers: The acquisition of Infinitus Pay and continued development of the FinZeo platform aim to enhance product offerings and service capabilities. High customer concentration means the loss of a major client could severely impact service continuity.
• Creditors: The company's going concern status and increasing liabilities, including a 24% interest loan, indicate elevated credit risk. The security for the $1,200 thousand payable to the Alliance Partners seller (substantially all company assets) and the $1,000 thousand loan (accounts receivable and IP stock) impacts asset availability for other creditors.

Next Steps

• Actively pursue additional funding options to address going concern considerations.
• Continue efforts to generate cash from existing and new revenue streams.
• Pursue an uplisting to a national exchange before the end of the fiscal year.
• Complete purchase price accounting for the Infinitus Pay acquisition prior to the end of the allowable measurement period.
• Arbitration with Moses & Singer LLP is ongoing, with resolution expected before or by spring 2026.
• Assess the impact of new accounting guidance (ASU 2024-03) on financial statement disclosures.

Key Dates

Recommendation

Despite significant revenue growth, the company faces severe financial distress, evidenced by recurring operating losses, a 'going concern' warning, and a substantial decline in cash and stockholders' equity. The delisting from Nasdaq to the OTCQB market significantly reduces liquidity and investor confidence. While recent capital raises and an acquisition provide some short-term funding, they come with high interest rates and potential dilution. The ineffective disclosure controls and high customer concentration further exacerbate the risk profile. The fundamental financial instability and operational challenges outweigh the reported revenue increases, making the stock a high-risk investment with significant downside potential.

Keywords

Fintech, Payments-as-a-Service, Banking-as-a-Service, FinZeo, Digital Payments, SEC Filing, 10-Q, AppTech Payments, APCX, Going Concern, Acquisition, Infinitus Pay, OTC Venture Market, Financial Technology, Merchant Services, Capital Raise