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AP

AppTech Payments Corp. (APCX)·Q1 2022 Earnings Summary

Executive Summary

  • Q1 2022 revenue was approximately $104 thousand, up 3% year over year, as processing volumes increased; cash was $10.3 million following the January NASDAQ uplisting and public offering .
  • Operating loss was significant as AppTech scaled headcount and R&D ahead of platform launch: net loss of $5.46 million and basic/diluted EPS of $(0.35) .
  • Management reiterated 2022 platform launch timing, highlighted patent portfolio expansion (Hothand definitive agreement) and client onboarding readiness .
  • No formal numeric guidance was provided; the quarter’s narrative catalyst centered on balance sheet strength post-uplisting and accelerating platform build, offset by high operating spend and litigation accruals .

What Went Well and What Went Wrong

What Went Well

  • Revenue grew 3% YoY to ~$104 thousand on higher processing volumes; cash ended at $10.3 million with net offering proceeds of ~$13.4 million, providing >1-year operating runway per filing .
  • Platform development milestones: CI/CD pipelines, secure AWS infra, POCs for Text2Pay and Crypto Payments; onboarding of sales leadership and business development head to support expansion .
  • Management emphasized IP strength and commercialization path: “Our platform…will offer merchants, banking institutions and business enterprises, standalone products and fully integrated solutions…” and “Our recent acquisition of Hothand further bolsters our patent portfolio to 16 total patents” .

What Went Wrong

  • Net loss of $5.46 million with total operating expenses of $5.66 million as G&A and R&D ramped (R&D $2.05 million vs $0.00 in Q1 2021), compressing profitability despite modest revenue growth .
  • Cost of revenue rose 50% YoY to ~$51 thousand due to increased residual payouts, reducing gross profit vs the prior year .
  • Ongoing legal overhangs and derivative liabilities: expected EMA Financial settlement range $400–$550 thousand; anti-dilution share accrual related to Infinios $2.1 million classified as long-term liability .

Financial Results

MetricQ1 2021Q2 2021Q3 2021Q1 2022
Revenue ($USD Thousands)$100.7 $151.0 $92.4 $104.0
Cost of Revenues ($USD Thousands)$34.4 $35.9 $41.8 $51.0
Gross Profit ($USD Thousands)$66.3 $115.2 $50.6 $53.0
Net Loss ($USD Thousands)$(66,293.5) $(6,340.5) $(2,742.6) $(5,455.0)
Basic & Diluted EPS ($USD)$(0.69) $(0.06) $(0.02) $(0.35)
Weighted Avg. Shares (Millions)96.6 102.9 111.9 15.48

Liquidity metrics:

MetricQ1 2021Q2 2021Q3 2021Q1 2022
Cash & Equivalents ($USD Thousands)$618 $354 $22 $10,290
Working Capital ($USD Thousands)$(6,864) $(6,590) $(6,026) $6,200
Stockholders’ Equity ($USD Thousands)$(1,658) $491 $941 $10,719

Segment breakdown: Not applicable; AppTech reports as a single operating entity .

KPIs: No formal operational KPIs disclosed; key drivers discussed qualitatively (processing volumes, platform readiness) .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY/QuarterNone providedNone providedMaintained (no guidance)
Margins (Gross/EBITDA/Net)FY/QuarterNone providedNone providedMaintained (no guidance)
OpExFY/QuarterNone providedNone providedMaintained (no guidance)
Tax RateFY/QuarterNone providedNone providedMaintained (no guidance)
DividendsFY/QuarterNone providedNone providedMaintained (no guidance)

Note: Management reiterated 2022 platform launch timing and commercialization plans, but did not provide quantitative financial guidance .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 2021 and Q2/Q3 2021)Current Period (Q1 2022)Trend
Platform development & text paymentsIntroduced platform vision; SMS text payments technology; NECP/Infinios partnership to enable issuer processing and APIs POCs for Text2Pay and Crypto Payments; CI/CD and secure AWS; clients “eager to onboard” Accelerating build-out
Capital raise/uplistingNeed for capital; repurchase options; OTC status NASDAQ uplisting (Jan 7, 2022) and ~$13.4M net proceeds bolster cash Positive liquidity inflection
Intellectual property & patentsLegacy GlobalTel patents; IP central to text payments Hothand definitive agreement adds mobile payments/search/location patents; 16 total patents cited IP portfolio expanding
COVID/macro impacts on processingCOVID reduced in-person volumes; processors reduced fees; gradual recovery Noted higher processing volume YoY; residual payout increases Gradual normalization
R&D execution & staffingLimited R&D in early 2021; contractor options and development planning R&D expense $2.1M as engineers onboarded; only product dev salaries capitalized from Jan 2022 Heavy investment phase
Legal/regulatoryLegacy shareholder disputes; Flowpay litigation; EMAF note/warrant suit EMAF settlement range $400–$550K; anti-dilution long-term liability $2.1M Continuing overhang

Management Commentary

  • “We are continuing to make meaningful progress towards the launch of our platform in 2022… offer merchants, banking institutions and business enterprises, standalone products and fully integrated solutions…” — Luke D’Angelo, CEO .
  • “Our recent acquisition of Hothand further bolsters our patent portfolio to 16 total patents… will allow us to pursue licensing agreements with many large companies.” — Luke D’Angelo .
  • “Our strong balance sheet will allow us to properly execute our plans to become a premier Fintech platform…” — Luke D’Angelo .

Q&A Highlights

  • No public transcript was filed in the document catalog; the company posted an “Q1 2022 Earnings Call” script/slides rather than a full transcript .
  • Accordingly, no formal Q&A disclosures or guidance clarifications are available in primary filings for Q1 2022 .

Estimates Context

  • S&P Global consensus estimates for Q1 2022 EPS and revenue were unavailable via our data access during this session; comparisons to Street were therefore not provided. Values retrieved from S&P Global*.

Where estimates are required to adjust, the absence of published consensus implies investors should anchor on company-reported actuals and planned 2022 launch milestones .

Key Takeaways for Investors

  • Modest top-line growth (+3% YoY) juxtaposed with substantial operating/R&D ramp underscores a build-before-scale posture into 2022 launch; near-term P&L pressure likely persists until commercialization .
  • Liquidity is strong post-uplisting (cash $10.3M) providing runway to execute the platform roadmap and IP licensing initiatives; this reduces financing risk vs 2021 .
  • IP portfolio expansion (Hothand) and client onboarding readiness are strategic positives; watch for licensing revenues or early platform transactions as proof points .
  • Legal/anti-dilution liabilities remain a non-operating headwind; resolution of EMAF and anti-dilution obligations could remove overhangs .
  • KPIs to monitor: processing volume growth, merchant onboarding, capitalized development progress, and operating expense trajectory as the platform transitions from build to revenue .
  • Near-term trading: sentiment likely tied to tangible launch milestones and any partnership/commercial wins; mid-term thesis depends on converting platform/IP into recurring revenue streams while normalizing OpEx .