AppTech Payments Corp. Announces \$500,000 Convertible Note Financing and Warrant Issuance

Key Highlights for Investors

• AppTech Payments Corp. (OTCQB: APCX) has entered into a securities purchase agreement on April 3, 2026, resulting in the issuance of a \$500,000 promissory note to institutional investors.
• The note carries a high interest rate of 18% per annum and matures 14 months from the issue date, with cash amortization payments beginning May 4, 2026.
• Conversion Feature: The note is convertible at the investor’s discretion into common shares at a fixed price of \$2.00 per share, subject to adjustments. There is a 4.99% beneficial ownership limitation to prevent the investor from acquiring more than 4.99% of the company’s outstanding common stock through conversion.
• Original Issue Discount: The investor paid \$475,000 for the \$500,000 note, reflecting a \$25,000 original issue discount and certain transaction expense deductions.
• Default Terms: In the event of default, outstanding amounts may become immediately due and payable at a premium of 125% of principal and accrued interest, and the investor may gain the right to convert at alternative pricing.
• Warrant Issuance: The investor also received a warrant to purchase up to 500,000 common shares at an initial exercise price of \$1.00 per share, expiring five years from issuance. The warrant features anti-dilution protections, cashless exercise provisions, and a 4.99% beneficial ownership cap.
• Subsidiary Guarantee: AppTech’s wholly-owned subsidiary, Infinitus Pay Inc., has guaranteed the company’s obligations and granted a security interest in certain collateral to the investors if a default occurs.
• Fees & Placement Agent: The company agreed to pay transaction expenses, including placement agent fees to HCC Securities Group, Inc.
• Securities Law Exemption: The note and underlying shares were offered and sold without SEC registration, relying on the Section 4(a)(2) and Rule 506(b) exemptions.
• Exhibit Filings: The full text of the agreements, note, warrant, and guarantee are filed as exhibits to the Form 8-K.

Shareholder and Market Impact

• Dilution Risk: The convertible note, if fully converted, and the exercise of warrants could significantly dilute existing shareholders, especially since the warrant exercise price (\$1.00) is likely below market price at issuance, and the conversion price (\$2.00) is fixed but subject to adjustment. The company acknowledges this potential for dilution.
• High Cost of Capital: The 18% interest rate and original issue discount highlight the relatively high cost of this financing, which may reflect the company’s current risk profile and market conditions.
• Security and Default Terms: The security interest granted by Infinitus Pay Inc. and the 125% default premium provide significant protection for investors, which could impact the company’s financial flexibility in a downside scenario.
• Restricted Stock and Resale Limitations: The issued securities are restricted and cannot be freely resold unless registered or exempt from registration, which may affect liquidity for investors.
• Market Movement Potential: The announcement of this financing, particularly with its dilutive features and high interest rate, is likely to be price-sensitive. Investors should monitor the company’s ability to use the proceeds for business development and the potential for further dilution from conversions and warrant exercises.
• No Emerging Growth Company Status: AppTech is not classified as an emerging growth company, which can affect regulatory and reporting obligations.

Additional Details

• Listing: Common stock and warrants are quoted on the OTCQB market under the symbols APCX and APCXW, respectively.
• Principal Use of Proceeds: Net proceeds are designated for business development, primarily for Infinitus Pay Inc., a wholly-owned subsidiary.
• Anti-Dilution and Adjustment Provisions: The warrant and note contain customary anti-dilution adjustments for stock splits, dividends, and certain dilutive issuances, which may further impact the conversion and exercise prices.
• Shareholder Rights: The agreements specify that the new securities are not subject to preemptive rights and will be validly issued, fully paid, and non-assessable.
• Reporting and Listing Compliance: The company commits to maintaining its listing and SEC reporting obligations.

Conclusion

This transaction provides AppTech Payments Corp. with immediate capital to support its business development initiatives. However, the high interest rate, dilutive convertible note, and warrants present significant risks and potential dilution for current shareholders. Investors should closely monitor the company’s use of proceeds, future financial developments, and any subsequent announcements regarding conversions or exercises under the new financing agreements.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own research and consult with financial advisors before making investment decisions. The author is not responsible for any losses arising from reliance on the information provided herein.

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