PROPOSAL 2
ELECTION OF CLASS I DIRECTORS
General
The
Board is currently composed of five directors with 1-year terms. It
is AppTech’s intention to expand the Board to 7 directors in
two classes (Class I and Class II) with staggered 2-year terms. To
accomplish the staggering, for the 2020 Director elections, Class I
Directors shall only be elected to a 1-year term and Class II
Directors will be elected to 2-year terms. Beginning in 2021, and
the years thereafter, Class I Directors will be elected to 2-year
terms.
Directors. Our current directors are Bobby Bedi, Luke
D’Angelo, Michael Gross, Gary Wachs, and Christopher
Williams.
Effective upon approval of the amendment to the
Articles of Domestication and the election of the Class I and Class
II Directors at the Annual Meeting, the number of directors
composing the Board will be seven, and there will be three Class I
directors and four Class II directors. There are no family relationships among any of our
directors or executive officers.
Nominees for Election as Class I Directors at the Annual
Meeting
This
year’s nominees for election to the Board as Class I
directors, each to serve for a term of one year expiring at the
2021 annual meeting of stockholders, or until his successor has
been duly elected and qualified or until his earlier death,
resignation or removal, are Roz Huang, William Huff and Michael
O’Neal. Bobby Bedi will not be seeking reelection. Beginning
at the 2021 annual meeting of the stockholders Class I directors
shall be elected to a two (2) year term. Each of the nominees has
agreed to serve as a director if elected, and we have no reason to
believe that any nominee will be unable to serve if
elected.
|
Name
|
|
Age
|
|
Positions and Offices
Held with Company
|
|
Director
Since
|
|
Roz
Huang
|
|
52
|
|
N/A
|
|
N/A
|
|
William Huff
|
|
67
|
|
N/A
|
|
N/A
|
|
Michael
O’Neal
|
|
64
|
|
N/A
|
|
N/A
|
Below
is additional information about the nominees as of the date of this
Proxy Statement, including business experience, director positions
held currently or at any time during the last five years,
involvement in certain legal or administrative proceedings, if
applicable, and the experiences, qualifications, attributes or
skills that caused our nominating and corporate governance
committee and our Board to determine that he or she should continue
to serve as one of our directors. Non-management Director,
Christopher Williams, recommended Roz Huang and William Huff to the
Nominating and Corporate Governance Committee. Non-management
Director, Michael Gross, recommended Michael O’Neal to the
Nominating and Corporate Governance Committee.
Roz Huang is not, nor has she ever been, a member of the
Board. Roz Huang is the President of Dandelion Global, LLC, CEO of
Athena Music & Wellness Academy and Chairwoman of International
Music & Wellness Council, an international Non- Profit
organization, Advisor to the Board of Intivahealth, Inc. and Member
of Board of Directors to Alzheimer’s Association Orange
County. Her international business experience spans over 25 years
in global investment and business development. Her expertise
includes strategic planning in areas such as sustainability, green
energy, healthcare, education, licensing, corporate governance and
investor relations. She is a business interpreter and translator
and an accomplished business journalist and public
speaker.
The
Board believes that Roz Huang should serve as a director of the
Company.
William Huff
is not, nor has she ever been, a
member of the Board. Mr. Huff is a certified public accountant and
brings to the Board vital expertise in finance and operations
management. He has served on the Board of Directors of numerous
companies, including as Chairman. His progressive experience and
demonstrated leadership with nearly 100 start-up
companies—Internet marketing and security, mortgage, finance,
equipment leasing, collection agency, and real estate development
businesses—and success in taking two companies public make
him an ideal choice to guide and mentor the CEO, CFO and entire
management team. He establishes and streamlines business systems
that drive growth and increase efficiency and profits. His proven
success creating shareholder value and developing and executing
strategies to achieve and sustain financial growth demonstrates his
strategic innovation.
He
began his career with Arthur Andersen, and Co., and has served
large companies as CFO, developing necessary systems in high growth
environments. Forming his own practice 35 years ago, he became a
marketing specialist, gaining national attention as his accounting
franchise grew to top 25 in the nation in only three years. In
2008, he was a finalist for San Diego’s CFO of the Year. He
has been a sought-after speaker at national conventions, sharing
his growth techniques. He has worked with thousands of companies in
his private practice, helping many to grow into multimillion-dollar
operations. Currently, he is the founder and owner of YHWH, Inc. a
tax and consulting firm. His character and integrity are essential
assets, and he will be a great member of our Board of
Directors.
The
Board believes that William Huff should serve as a director of the
Company.
Michael O’Neal
is not, nor has she ever been, a
member of the Board. He is an innovative,
analytical, strategic CEO with extensive B2B and B2C experience
executing revenue growth and business transformations for
manufacturers, retailers, and distributors of technology-based
products. Most recently, as its President Mr. O’Neal
transformed Linear, a small engineering-based technology company
into Nortek Security & Control, a $500M global leader in
security, smart home control, health and wellness, and access
control platforms and solutions. Prior to Linear/Nortek Security
Control, Mr. O’Neal led several consumer technology
development and manufacturing companies as well as number of
retailers through transformations. He is currently working with
several technology companies seeking to add new technologies and
expand their market presence. He is a member of the San Diego
Habitat for Humanity Board and past member of the Board of the
Consumer Technology Association. He has spoken on several
security/home control industry panels for Houlihan Lokey, Imperial
Capital, and the Securing New Ground
Conferences.
The
Board believes that Michael O’Neal should serve as a director
of the Company.
Required Vote and Recommendation of the Board for Proposal
2
The affirmative vote of a plurality of the votes
cast at the Annual Meeting is required for the election of our
directors. Cumulative voting is permitted. The three nominees
receiving the most FOR votes among votes properly cast at the Annual
Meeting will be elected to the Board as Class I directors. You may
vote FOR or WITHHOLD on each nominee for election as director. Shares
represented by signed proxy cards and ballots submitted via the
Internet at the Annual Meeting will be voted on Proposal 2
FOR
the election of Roz Huang, William
Huff and Michael O’Neal to the Board at the Annual Meeting,
unless otherwise marked on the proxy card or ballot, respectively.
A broker non-vote or a properly executed proxy (or ballot)
marked WITHHOLD with respect to the election of a Class I director
will not be voted with respect to such director, although it will
be counted for purposes of determining whether there is a
quorum.
The Board unanimously recommends that you vote FOR the election of
Roz Huang, William Huff and Michael O’Neal to the
Board.
PROPOSAL 3
ELECTION OF CLASS II DIRECTORS
General
The
Board is currently composed of five directors with 1-year terms. It
is AppTech’s intention to expand the Board to 7 directors in
two classes (Class I and Class II) with staggered 2-year terms. To
accomplish the staggering, for the 2020 Director elections, Class I
Directors shall only be elected to a 1-year term and Class II
Directors will be elected to 2-year terms. Beginning in 2021, and
the years thereafter, Class I Directors will be elected to 2-year
terms.
Directors. Our current directors are Bobby Bedi, Luke
D’Angelo, Michael Gross, Gary Wachs, and Christopher
Williams.
Effective upon the election of the Class I and
Class II Directors at the Annual Meeting, the number of directors
composing the Board will be seven, and there will be four Class I
directors and three Class II directors. There are no family relationships among any of our
directors or executive officers.
Nominees for Election as Class II Directors at the Annual
Meeting
This
year’s nominees for election to the Board as Class II
directors, each to serve for a term of two years expiring at the
2022 annual meeting of stockholders, or until his successor has
been duly elected and qualified or until his earlier death,
resignation or removal, are Luke D’Angelo, Michael Gross,
Gary Wachs and Christopher Williams. Each of the nominees is
currently a member of our Board and has agreed to serve as a
director if elected, and we have no reason to believe that any
nominee will be unable to serve if elected.
|
Name
|
|
Age
|
|
Positions and Offices
Held with Company
|
|
Director
Since
|
|
Luke
D’Angelo
|
|
51
|
|
Chairman of the Board; Interim CEO
|
|
2013
|
|
Michael
Gross
|
|
65
|
|
Director; Former CEO
|
|
2017
|
|
Gary
Wachs
|
|
64
|
|
Director; CFO
|
|
2013
|
|
Christopher
Williams
|
|
68
|
|
Director
|
|
2016
|
Below
is additional information about the nominees as of the date of this
Proxy Statement, including business experience, director positions
held currently or at any time during the last five years,
involvement in certain legal or administrative proceedings, if
applicable, and the experiences, qualifications, attributes or
skills that caused our nominating and corporate governance
committee and our Board to determine that he or she should continue
to serve as one of our directors.
Luke D’Angelo
has been the Chairman of the Board
since 2013 and Interim Chief Executive Officer since December 2019.
Mr. D'Angelo served as the Company's Chief Executive Officer from
2013 to 2017 and as Chief Investment Officer since 2017. Mr.
D'Angelo has over 25 years' experience in real estate, investment
banking, venture capital and commercial operations. In 2006, he
founded a merchant services company, Transcendent One, Inc. which
became an Inc. 500 fastest growing company, ranked at #105. Mr.
D'Angelo's company was the first "Merchant Owned" company in the
United States, offering ownership in the company to customers based
on their monthly credit card processing volumes. In 2009, Mr.
D'Angelo founded TransTech One, LLC a subsidiary to Transcendent
One, Inc. that had a focus in the bill payment and technology
industries.
The
Board believes that Mr. D’Angelo should continue to serve as
a director of the Company.
Michael Gross
has served as a Director since 2017
and as our Chief Executive Officer from 2017 until December 2019.
Starting as a salesman, Mr. Gross eventually became the president
of Jones Boys Sales Promotions Co. in 1980, at the young age of 25,
and began working directly with the owner on company expansion and
new product development. In 1997, Mr. Gross purchased Jones Boys
Sales Promotions Co, now Crossfire Marketing Group, Inc., and
remains the owner. In addition to his work at Crossfire Marketing
Group, Inc and with us, Mr. Gross works with several AI companies
on creating a conversation synthetic agent for lead generation as
well as development for customer service to improve efficiency.
With over 40 years in the industry, Mr. Gross has worked with more
than 400 U.S. and Canadian media companies, setting up strategic
campaigns and alliances.
The
Board believes that Mr. Gross should continue to serve as a
director of the Company.
Gary Wachs has served as Director since 2013 and our Chief
Financial Officer since 2013. Mr. Wachs is a Certified Public
Accountant who has spent his career in high-level accounting,
finance and tax. Mr. Wachs served as Managing Partner of Blake and
Shaffer, a Certified Public Accounting firm, and has been a
Managing Member of Blake and Wachs CPA, LTD (formerly Blake and
Shaffer) since 1997. He manages corporate accounting and taxes, is
experienced in PCAOB accounting and certified audits, and a variety
of other accounting, tax, and consulting areas.
The Board believes that Mr. Wachs should continue
to serve as a director of the Company.
Christopher Williams
has served as a Director since 2016.
Mr. Williams is a corporate finance attorney with a 42-year
background in corporate and entertainment finance, investment
property transactions and investment banking, including service on
the board of directors and advisory boards for several private
equity funds and venture capital firms. He served as Outside
Corporate Counsel for several publicly traded companies and
financial institutions assisting clients in raising over $500
Million in capital and alternate forms of financing. Mr. William's
prior experience also includes 20 years active duty as a Navy JAG
officer, Police Officer, Special Criminal Investigator, San Diego
Superior Court Arbitrator, San Diego Superior Court Judge Pro Tem,
San Diego Superior Court Special Settlement Conference Panel Judge,
State of California Special Master, Professor, Federal Magistrate -
Military Review Officer, and San Diego County Bar Arbitrator. In
addition, Mr. Williams was selected to serve as Special Advisor to
the Governor of California and acted as Bond Counsel for several
municipalities in California with over $2 Billion in
underwriting.
The
Board believes that Mr. Williams should continue to serve as a
director of the Company.
Required Vote and Recommendation of the Board for Proposal
3
The affirmative vote of a plurality of the votes
cast at the Annual Meeting is required for the election of our
directors. Cumulative voting is permitted. The four nominees
receiving the most FOR votes among votes properly cast at the Annual
Meeting will be elected to the Board as Class II directors. You may
vote FOR or WITHHOLD on each nominee for election as director. Shares
represented by telephone voted, signed proxy cards and ballots
submitted via the Internet at the Annual Meeting will be voted on
Proposal 3 FOR the election of Mr. D’Angelo, Mr. Gross, Mr.
Wachs and Mr. Williams to the Board at the Annual Meeting, unless
otherwise marked on the proxy card or ballot, respectively. A
broker non-vote or a properly executed proxy (or ballot)
marked WITHHOLD with respect to the election of a Class II
director will not be voted with respect to such director, although
it will be counted for purposes of determining whether there is a
quorum.
The Board unanimously recommends that you vote FOR the election of
Luke D’Angelo, Michael Gross, Gary Wachs and Christopher
Williams to the Board.
CORPORATE GOVERNANCE
Independent Directors
Currently
no Directors qualify as an independent director in accordance with
the published listing requirements of the Nasdaq Global Market, or
Nasdaq. The Nasdaq independence definition includes a series of
objective tests, such as that the director is not also one of our
employees and has not engaged in various types of business dealings
with us. In addition, as further required by the Nasdaq rules, the
Board has made a subjective determination as to each potential,
future independent director that no relationships exist that, in
the opinion of the Board, would interfere with the exercise of
independent judgment in carrying out the responsibilities of a
director. In making these determinations, our directors reviewed
and discussed information provided by the directors and us with
regard to each director’s business and personal activities as
they may relate to us and our management. AppTech is currently
listed on the OTC Pink Market, which does not have director
independence requirements. Upon the election of the named
individuals as Class I Directors, in Proposal 2, above, the Board
will have three independent directors. Further, in December 2020,
it is the Board’s current assessment that Christopher
Williams shall also be deemed independent in accordance with the
requirements above.
Board Committees
The
Board established a Corporate Governance and Nominating committee
and will establish an Audit and Finance Committee, and a
Compensation Committee upon successfully expanding the Board of
Directors at our 2020 Annual Shareholder meeting to include
additional independent directors in accordance with Nasdaq
standards described above and SEC rules and regulations. The Board
and its committees will set, upon creation, schedules to meet
throughout the year and may also hold special meetings and act by
written consent from time to time as appropriate. The independent
directors of the Board will also hold separate regularly scheduled
executive session meetings at least twice a year at which only
independent directors are present. The Board has delegated various
responsibilities and authority to its committees as generally
described below. The committees regularly report on their
activities and actions to the full Board. By the end of 2020, each
member of each committee of the Board will qualify as an
independent director in accordance with the Nasdaq standards
described above and SEC rules and regulations. The Corporate
Governance Committee and Nominating has a written charter approved
by the Board. Upon creation, each remaining committee of the Board
will have a written charter approved by the Board. Copies of each
charter will be posted on our website at www.apptechcorp.com under
the Investor Relations section. The inclusion of our website
address in this Proxy Statement does not include or incorporate by
reference the information on our website into this Proxy
Statement.
The
following table provides membership and meeting information for
each of the committees of the Board during 2019:
|
Committee
|
|
Chairman
|
|
Other Members
|
|
Number of Meetings in 2019
|
|
Audit
Committee
|
|
N/A
|
|
N/A
|
|
0
|
|
Compensation
Committee
|
|
N/A
|
|
N/A
|
|
0
|
|
Corporate
Governance and Nominating Committee
|
|
N/A
|
|
N/A
|
|
0
|
The
primary responsibilities of each committee are described
below.
Audit Committee
Our
audit committee currently consists of no committee members. Upon
creation, the Board will annually review the Nasdaq listing
standards definition of independence for audit committee members
and, if so classified, will determine that all members of our audit
committee are independent (as independence is currently defined in
applicable Nasdaq listing
standards and Rule 10A-3 promulgated by the SEC under the
Securities Exchange Act of 1934, as amended (the “Exchange
Act”)).
The
Board, based on recommendations from our nominating and corporate
governance committee, will determine that the committee chair
qualifies as an “audit committee financial expert,” as
that term is defined in the rules and regulations of the SEC. The
designation of the committee chair as an “audit committee
financial expert” will not impose on him/her any duties,
obligations or liability that are greater than those that are
generally imposed on him as a member of our audit committee and the
Board, and his/her designation as an “audit committee
financial expert” pursuant to this SEC requirement will not
affect the duties, obligations or liability of any other member of
our audit committee or the Board.
The
audit committee will monitor our corporate financial statements and
reporting and our external audits, including, among other things,
our internal controls and audit functions, the results and scope of
the annual audit and other services provided by our independent
registered public accounting firm and our compliance with legal
matters that have a significant impact on our financial statements.
Our audit committee will also consult with our management and our
independent registered public accounting firm before our annual
audited financial statements are included in our Annual Report and,
as appropriate, initiate inquiries into aspects of our financial
affairs. Our audit committee will be responsible for establishing
procedures for the receipt, retention and treatment of complaints
regarding accounting, internal accounting controls or auditing
matters and for the confidential, anonymous submission by our
employees of concerns regarding questionable accounting or auditing
matters. Our audit committee will monitor compliance with our Code
of Business Conduct and oversee our compliance programs. In
addition, our audit committee is directly responsible for the
appointment, retention, compensation and oversight of the work of
our independent auditors, including approving services and fee
arrangements. Our audit committee will approve related party
transactions before we enter into them, in accordance with the
applicable rules.
Both
our independent registered public accounting firm and our internal
financial personnel will regularly meet with, and have unrestricted
access to, the audit committee.
Compensation Committee
Our
compensation committee currently consists of no members. Upon
creation, the Board will, if so classified, determine that each
committee member satisfies the additional Nasdaq independence test
for compensation committee members as well as the general
independence requirements of Nasdaq and the SEC rules and
regulations for directors. In addition, each member of our
compensation committee will be (a) a non-employee director, as
defined pursuant to Rule 16b-3 promulgated under the Exchange Act
and (b) an outside director, as defined pursuant to Section 162(m)
of the Internal Revenue Code of 1986, as amended.
The
compensation committee will make recommendations to the Board and
review and approve our compensation policies and all forms of
compensation to be provided to our directors and executive
officers, including, among other things, annual salaries, bonuses,
equity incentive awards and other incentive compensation
arrangements. In addition, our compensation committee will
administer our equity incentive and employee stock purchase plans,
including granting stock options or awarding restricted stock units
to our directors and executive officers. Our compensation committee
will also review and approve employment agreements with executive
officers and other compensation policies and matters.
In
accordance with Nasdaq listing standards and our yet to be
instituted compensation committee charter, our compensation
committee will have the authority and responsibility to retain or
obtain the advice of compensation consultants, legal counsel and
other compensation advisors, the authority to direct the Company to
pay such advisors and the responsibility to consider the
independence factors specified under applicable law and any
additional factors the compensation committee deems
relevant.
Corporate Governance and Nominating Committee
Our
corporate governance and nominating committee currently consists
Luke D’Angelo, Gary Wachs and Christopher Williams (Committee
Chair). Our nominating and corporate governance committee
identifies, evaluates and recommends nominees to the Board and
committees of the Board, conduct searches for appropriate directors
and evaluates the performance of the Board and of individual
directors. Our nominating and corporate governance committee
determines that candidates for director should have certain minimum
qualifications, including being able to read and understand basic
financial statements and having a general understanding of our
industry. In evaluating potential nominees to the Board, the
nominating and corporate governance committee considers a wide
variety of qualifications, attributes and other factors and
recognizes that a diversity of viewpoints and practical experience
can enhance the effectiveness of the Board. Accordingly, as part of
its evaluation of each candidate, the nominating and corporate
governance committee takes into account that candidate’s
background, experience, qualifications, attributes and skills that
may complement, supplement or duplicate those of other prospective
candidates and current directors. All nominees (other than nominees
who are executive officers or whoa re directors standing for
reelection), as stated above, were recommended by non-management
directors. Michael Gross, a non-management director, who
beneficially owned more than 5% of AppTech’s voting common
stock, recommended Michael O’Neal to the nominating
committee.
Our
corporate governance and nominating committee also considers
candidates proposed in writing by stockholders, provided such
proposal meets the eligibility requirements for submitting
stockholder proposals under our amended and restated bylaws and is
accompanied by adequate information about the candidate and the
stockholder submitting the proposal. Our corporate governance and
nominating committee evaluates candidates proposed by stockholders
by using the same criteria as for all other
candidates.
Our
corporate governance and nominating committee is also responsible
for reviewing developments in corporate governance practices,
evaluating the adequacy of our corporate governance practices and
reporting and making recommendations to the Board concerning
corporate governance matters. Our nominating and corporate
governance committee has not adopted a policy regarding the
consideration of diversity in identifying director
nominees.
Board Meetings and Attendance
The
Board held six meetings in 2019. During 2019, each incumbent member
of the Board attended 75% or more of the aggregate of (a) the total
number of Board meetings held during the period of such
member’s service and (b) the total number of meetings of
committees on which such member served, during the period of such
member’s service.
Director Attendance at Annual Meetings of Stockholders
Directors
are encouraged, but not required, to attend our annual stockholder
meetings. All of our directors attended our last annual
meeting.
Separation of CEO
On
November 20, 2019, we resolved to accept the resignation of CEO
Michael Gross that took effect on December 3, 2019 (the
“Transition Date”). Under the resignation, effective on
the Transition Date:
|
|
|
|
●
|
Michael Gross resigned as our Chief Executive Officer, retained his
position as a director and became a consultant to the
Company.
|
|
●
|
Chairman of the Board Luke D’Angelo, previously our Chief
Investment Officer, the was promoted to Interim Chief Executive
Officer.
|
Compensation Committee Interlocks and Insider
Participation
Upon
creation, none of the members of the compensation committee will or
have ever been an officer or employee of the Company. No executive
officer of the Company serves as a member of the Board or
compensation committee of any other entity that has one or more
executive officers serving as a member of the Board or our
compensation committee.
Risk Oversight
The
Board oversees the management of risks inherent in the operation of
our business and the implementation of our business strategies. The
Board performs this oversight role by using several different
levels of review. In connection with its reviews of the operations
and corporate functions of our Company, the Board addresses the
primary risks associated with those operations and corporate
functions. In addition, the Board reviews the risks associated with
our Company’s business strategies periodically throughout the
year as part of its consideration of undertaking any such business
strategies.
Each
of our Board committees will also oversee the management of our
Company’s risk that falls within the committee’s areas
of responsibility. In performing this function, each committee will
have full access to management, as well as the ability to engage
advisors. Our Chief Financial Officer, Corporate Counsel and other
members of management will report to the audit committee with
respect to risk management, and our Chief Financial Officer and our
Corporate Counsel are responsible for identifying, evaluating and
implementing risk management controls and methodologies to address
any identified risks. In connection with its risk management role,
our audit committee will meet privately with representatives from
our independent registered public accounting firm and our Chief
Financial Officer, Corporate Counsel and other members of
management. The audit committee will oversee the operation of our
risk management program, including the identification of the
primary risks associated with our business and periodic updates to
such risks and reports to the Board regarding these
activities.
Employee Compensation Risks
As
part of its oversight of our executive compensation program, the
compensation committee will consider the impact of our executive
compensation program, and the incentives created by the
compensation awards that it administers, on our risk profile. In
addition, the compensation committee will review the compensation
policies and procedures for all employees, including the incentives
that they create and factors that may reduce the likelihood of
excessive risk taking, to determine whether they present a
significant risk to us.
Code of Business Conduct
The
Board adopted a Code of Business Conduct that relates to ethics and
business conduct that applies to all of our Directors, Officers and
members of senior management. The full text of our Code of Business
Conduct is posted on our website at www.apptechcorp.com under the
Investor Relations section. We intend to disclose future amendments
to certain provisions of our Code of Business Conduct, or waivers
of such provisions, applicable to our directors, executive officers
and members of senior management at the same location on our
website identified above and also in a Current Report on Form 8-K,
as required, within four business days following the date of such
amendment or waiver. Further, all employees must adhere for our
Code of Conduct as a condition of employment. The inclusion of our
website address in this Proxy Statement does not include or
incorporate by reference the information on our website into this
Proxy Statement.
Limitation of Liability and Indemnification
We
have entered or will enter into indemnification agreements with
each of our directors and executive officers. The agreements
provide that we will indemnify each of our directors and executive
officers against any and all expenses incurred by that director or
executive officer because of his status as one of our directors or
executive officers, to the fullest extent permitted by Wyoming law
and our amended and restated bylaws.
Our amended and restated bylaws contain provisions
relating to the limitation of liability and indemnification of
directors. The restated certificate of incorporation provides that
our directors will not be personally liable to us or our
stockholders for monetary damages for any breach of fiduciary duty
as a director.
Communications to the Board
Stockholders
interested in communicating with the independent directors, should
such an individual be elected, or any member of the Board of
Directors, regarding their concerns or issues may address
correspondence to a particular director or to the independent
directors generally, care of AppTech Corp., 5876 Owens Avenue Suite
100, Carlsbad, CA, 92008, Attn: Secretary Jeff Moriarty. The
Secretary of the Company has the authority to disregard any
inappropriate communications or to take other appropriate actions
with respect to any inappropriate communications. If the Secretary
of the Company deems a communication to be appropriate, he will
forward it, depending on the subject matter, to the Chairman of the
Board, the chair of a committee of the Board, the full Board or a
particular director, as appropriate.
Director & Advisor Compensation
The
following table describes our current non-employee director and
advisor compensation program, which consists of annual restricted
stock unit retainers paid in four quarterly payments and options to
purchase shares of our common stock:
|
Term
|
|
Compensation (1)
|
|
Annual
Restricted Stock Unit Retainer for All Non-Employee
Directors
|
|
50,000
restricted stock units of AppTech common stock
|
|
Chairman
of Board (if non-employee)
|
|
Additional
annual retainer of 25,000 restricted stock units
|
|
Lead
Non-Employee Director
|
|
Additional
annual retainer of 15,000 restricted stock units
|
|
Chair
of Audit Committee
|
|
Additional
annual retainer of 25,000 restricted stock units
|
|
Chair
of Compensation Committee
|
|
Additional
annual retainer of 15,000 restricted stock units
|
|
Chair
of Nominating and Corporate Governance Committee
|
|
Additional
annual retainer of 15,000 restricted stock units
|
|
Non-Chair
Member of Audit Committee
|
|
Additional
annual retainer of 10,000 restricted stock units
|
|
Non-Chair
Member of Compensation Committee
|
|
Additional
annual retainer of 5,000 restricted stock units
|
|
Non-Chair
Member of Nominating and Corporate Governance
Committee
|
|
Additional
annual retainer of 5,000 restricted stock units
|
|
Initial
Option Grant
|
|
Option
to purchase up to 25,000 shares of our common stock upon election
as director (2)
|
|
Annual
Option Grant
|
|
Option
to purchase 25,000 shares of our common stock following each annual
meeting of stockholders (2)
|
|
Annual
Restricted Stock Unit Retainer for All Non-Employee Advisory Board
Members
|
|
10,000
restricted stock units of AppTech common stock
|
|
Initial
Option Grant for Advisory Board Members
|
|
Option
to purchase 15,000 shares of our common stock following each annual
meeting of stockholders (2)
|
|
Annual
Option Grant for Advisory Board Members
|
|
Option
to purchase up to 15,000 shares of our common stock upon
appointment as advisor (2)
|
(1)
The compensation described within this table was not in place
during the year 2019. During 2019 no directors received
compensation for being a member of the Board of
Directors.
(2)
Options vest and become exercisable in equal monthly installments
over the following 12 months after grant if the director or advisor
provides continuous service through the applicable vesting
date.
All stock option grants to non-employee directors will have an
exercise price per share equal to the fair market value of one
share of our common stock on the date of grant and will be subject
to the terms of the AppTech Corp. equity incentive
plans.
Director Compensation Table for Year Ended December 31,
2019
The
following table sets forth information regarding compensation
earned by each of our directors during the fiscal year ended
December 31, 2019:
|
|
Fees Earned or Paid in Cash ($)
|
Fees Earned in Restricted Stock Units (2)
|
|
|
|
Bobby
Bedi
|
-
|
-
|
-
|
-
|
|
Luke
D’Angelo
|
-
|
-
|
-
|
-
|
|
Michael
Gross
|
-
|
-
|
-
|
-
|
|
Gary
Wachs
|
-
|
-
|
-
|
-
|
|
Christopher
Williams
|
-
|
-
|
-
|
-
|
|
(1)
|
Mr. Bedi, Mr. D’Angelo, Mr. Gross and Mr. Wachs were employed
as executives during the year ended December 31, 2019. Currently,
for more information on executive compensation, refer to page
22.
|
|
(2)
|
The amounts reported in this column represent the aggregate grant
date fair value of Restricted Stock Units in accordance with FASB
ASC Topic 718.
|
|
(3)
|
The amounts reported in this column represent the aggregate grant
date fair value of option awards computed in accordance with FASB
ASC Topic 718. The fair value of each option award is estimated on
the date of grant using the Black-Scholes option-pricing
model.
|
|
(4)
|
The amounts reported in this column represent the aggregate grant
date fair value of option awards computed in accordance with FASB
ASC Topic 718. The fair value of each option award is estimated on
the date of grant using the Black-Scholes option-pricing
model.
|
None
of the current directors hold outstanding and unexercised options
to purchase shares of our common stock held as of December 31,
2019.
PROPOSAL 4
APPROVAL OF APPTECH’S EQUITY INCENTIVE PLAN
General
Without
approval of a new or amended equity-based compensation plan, our
ability to provide market-level compensation to attract and retain
high caliber directors, employees and partners necessary to achieve
superior performance would be severely hampered.
AppTech
does not currently, nor have they ever, had a stockholder approved
equity incentive plan. On May 27, 2020, our Board of Directors
adopted the amended Equity Incentive Plan and recommended that it
be submitted to our stockholders for their approval at the Annual
Meeting. The following is a summary of certain features of the
amended Equity Incentive Plan. The summary is qualified in its
entirety by reference to the complete text of the Amended Equity
Incentive Plan. You are urged to read the actual text of the
amended Equity Incentive Plan in its entirety, which is set forth
in Appendix B.
Shares Available for Awards
Under
the amended Equity Incentive Plan, the total number of shares of
our common stock that may be subject to Awards is
5,000,000.
Eligibility
The
persons eligible to receive the Awards under the Amended Equity
Incentive Plan are Employees, Directors, Merchants, Referral
Partners, Channel Partners and other interested
individuals.
Required Vote and Recommendation of the Board for Proposal
4
The affirmative vote of a plurality of the votes
cast at the Annual Meeting is required for the approval of the
amended Equity Incentive Plan. Should the proposal receive more
votes FOR than AGAINST among votes properly cast at the Annual Meeting,
Proposal 4, approving the amended Equity Incentive Plan, shall be
passed. Shares represented by signed proxy cards and ballots
submitted via the Internet at the Annual Meeting will be voted on
Proposal 4 FOR the approval of the amended Equity Incentive Plan,
unless otherwise marked on the proxy card or ballot, respectively.
A broker non-vote or a properly executed proxy (or ballot)
marked ABSTAIN with respect to approving the amended Equity
Incentive Plan will not be voted with respect to Proposal 4,
although it will be counted for purposes of determining whether
there is a quorum.
The Board unanimously recommends that you vote FOR the approval of
the Amended Equity Incentive Plan
PROPOSAL 5
RATIFICATION OF THE SELECTION OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
The
Board of Directors has selected dbbmckennon, an independent
registered public accounting firm, as our independent auditors for
the year ending December 31, 2020, and has further directed that
management submit the selection of independent auditors for
ratification by the stockholders at the Annual Meeting. dbbmckennon
has served as our independent registered public accounting firm
since July 18, 2014. Representatives of dbbmckennon are expected to
be present at the Annual Meeting. They will have an opportunity to
make a statement if they so desire and will be available to respond
to appropriate questions.
Neither
our amended and restated bylaws nor other governing documents or
laws require stockholder ratification of the appointment of
dbbmckennon as our independent registered public accounting firm.
However, the Board of Directors is submitting the appointment of
dbbmckennon to the stockholders for ratification as a matter of
good corporate practice. If the stockholders fail to ratify the
selection, the Board Directors will reconsider whether or not to
retain dbbmckennon. Even if the selection is ratified, the Board of
Directors in its discretion may direct the appointment of different
independent auditors at any time during the year if it determines
that such a change would be in the best interests of the Company
and its stockholders.
For the selection by the audit committee of
dbbmckennon as the independent registered public accounting firm of
the Company for the year ending December 31, 2020 to be ratified,
we must receive a FOR vote from the holders of a majority of all those
outstanding shares that (a) are present or represented by proxy at
the Annual Meeting, and (b) are cast either affirmatively or
negatively on Proposal 5. Abstentions and broker non-votes will not
be counted FOR or AGAINST the proposal and will have no effect on the
proposal. Please note that brokers holding shares for a beneficial
owner that have not received voting instructions with respect to
the ratification of the approval of the appointment of dbbmckennon
will have discretionary voting authority with respect to this
matter.
The Board unanimously recommends that you vote FOR Proposal
5.
Independent Registered Public Accounting Firm’s
Fees
The
following table sets forth the fees billed by dbbmckennon, our
independent registered public accounting firm, for audit and
non-audit services rendered to us in 2019 and 2018. These fees are
categorized as audit fees, audit-related fees, tax fees and all
other fees. The nature of the services provided in each category is
described following the table.
|
|
Year Ended December 31,
|
|
|
2019
|
|
2018
|
|
Dbbmckennon Fees
|
|
|
|
|
|
|
Audit
fees (1)
|
$
|
44,000
|
|
|
$
|
-
|
|
|
Audit-related
fees
|
|
-
|
|
|
|
|
-
|
|
|
Tax
fees (2)
|
|
10,000
|
|
|
|
2,000
|
|
|
All
other fees (3)
|
|
20,215
|
|
|
|
|
-
|
|
|
Total
aggregate fees
|
$
|
74,215
|
|
|
$
|
2,000
|
|
(1)
The fees billed or incurred by dbbmckennon for professional
services in 2019 and 2018 include the audit of our annual financial
statements and internal control over financial reporting included
in the Annual Report.
(2)
In 2019 and 2018, fees billed or incurred by dbbmckennon were for
professional services rendered in connection with tax return
preparation.
(3)
In 2019, fees billed by dbbmckennon were for review of our
quarterly financial statements.
All
fees described above were pre-approved by the board of
directors.
Pre-Approval Policies and Procedures of the Board of
Directors
The
Board of Director’s policy is to pre-approve all audit and
permissible non-audit services rendered by dbbmckennon, our
independent registered public accounting firm. The Board of
Directors can pre-approve specified services in defined categories
of audit services, audit-related services and tax services up to
specified amounts, as part of the Board of Directors’
approval of the scope of the engagement of dbbmckennon or on an
individual case-by-case basis before dbbmckennon is engaged to
provide a service. The board of Directors has determined that the
rendering of tax-related services by dbbmckennon in 2020 is
compatible with maintaining the principal accountant’s
independence for audit purposes. dbbmckennon has not been engaged
to perform any non-audit services other than tax-related
services.
AUDIT COMMITTEE REPORT
AppTech
does not currently employ an audit committee because it lacks the
requisite independent directors and an Audit Committee Financial
Expert to construct such a committee. Upon expanding the Board of
Directors to seven (7) directors, AppTech intends to have the audit
committee review and discuss with management our audited
consolidated financial statements and “Management’s
Report on Internal Control over Financial Reporting” in Item
9A included in the Annual Report.
Once
created, the audit committee will discuss with dbbmckennon those
matters required to be discussed by the auditors with the audit
committee under the rules adopted by the Public Company Accounting
Oversight Board (the “PCAOB”). The audit committee will
receive the written disclosures and the letter from dbbmckennon
required by applicable requirements of the PCAOB regarding
dbbmckennon’s communication with the audit committee
concerning independence, and will discuss with dbbmckennon their
independence. The audit committee will consider with dbbmckennon
whether the non-audit services that dbbmckennon provided to us
during the previous year was compatible with their
independence.
Based
upon the review and discussions described above, and if the
requisite standards are met, the audit committee will recommend to
the Board that the audited consolidated financial statements be
included in the Annual Report for filing with the SEC. We have
selected dbbmckennon as the Company’s independent registered
public accounting firm for the year ending December 31, 2020, and
have approved submitting the selection of the independent
registered public accounting firm for ratification by the
stockholders.
The
material in this Audit Committee Report shall not be deemed to be
“soliciting material” or “filed” with the
SEC. This Audit Committee Report shall not be deemed incorporated
by reference into any of our other filings under the Exchange Act
or the Securities Act of 1933, as amended, except to the extent we
specifically incorporate it by reference into such
filing.
COMPENSATION COMMITTEE
REPORT
AppTech
does not currently employ a compensation committee because it lacks
the requisite independent directors in order to do so. Upon
expanding the Board of Directors to seven (7) directors, AppTech
intends to have the compensation committee will make
recommendations to the Board and review and approve our
compensation policies and all forms of compensation to be provided
to our directors and executive officers, including, among other
things, annual salaries, bonuses, equity incentive awards and other
incentive compensation arrangements. In addition, our compensation
committee will administer our equity incentive and employee stock
purchase plans, including granting stock options or awarding
restricted stock units to our directors and executive officers. Our
compensation committee will also review and approve employment
agreements with executive officers and other compensation policies
and matters. Because no such committee is in existence, the Board
of Directors currently acts in the manner described
above.
The
Board of Directors has reviewed and discussed the Compensation
Discussion and Analysis required by Item 402(b) ((§
229.402(b)) with management. Based on the review and discussion
referred to in paragraph (e)(5)(i)(A) on this Item, the Board of
Directors recommended that the Compensation Discussion and Analysis
be included in our proxy statement on Schedule 14A.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
Overview
The
first table below provides information concerning beneficial
ownership of our common stock and preferred stock as of the record
date by each stockholder, or group of affiliated stockholders,
known to us to beneficially own more than 5% of our outstanding
common stock and preferred stock.
The
second table provides information concerning beneficial ownership
of our common stock as of the record date, by:
|
|
|
|
●
|
each of our named executive officers;
|
|
|
|
|
●
|
each of our directors; and
|
|
|
|
|
●
|
all of our current executive officers and directors as a
group.
|
The
following tables are based upon information supplied by directors,
executive officers and principal stockholders; and Schedule 13G,
Schedule 13D and Section 16 filings filed with the SEC through the
record date. The column in each table entitled “Percentage of
Shares of Common Stock Beneficially Owned” is based upon
86,538,325 shares of common stock outstanding as of the record
date.
Preferred Stock
We have one authorized and outstanding series of
preferred stock: our Series Preferred Stock. As of the record date,
there are fourteen (14) shares of our Series A preferred
stock issued and outstanding. The holders of Series A preferred stock are
entitled to one vote per share on an "as converted" basis on all
matters submitted to a vote of stockholders and are entitled to
cumulate their votes in the election of directors. The holders of
Series A preferred stock are entitled to any dividends that may be
declared by the Board of Directors out of funds legally available,
therefore on a pro rata basis according to their holdings of shares
of Series A preferred stock, on an as converted basis. In the event
of liquidation or dissolution of the Company, holders of Series A
preferred stock are entitled to share ratably in all assets
remaining after payment of liabilities and have no liquidation
preferences. Holders of Series A preferred stock have a right to
convert each share of Series A preferred stock into 780 shares of
common stock.
Explanation of Certain Calculations in the Table for 5%
Stockholders
The
column in the following table entitled “Number of Shares of
Common Stock Beneficially Owned” all issued and outstanding
share of common stock on the record date. To our knowledge, the
stockholders listed in the table beneficially own no other
securities or right under which they are entitled to acquire shares
of common stock within 60 days of the record date.
Name and Address of Beneficial Owner
|
Number of Shares of Common Stock
Beneficially Owned
|
Percentage of Shares of Common Stock
Beneficially Owned
|
Number of Shares of Series A Preferred Stock Beneficially
Owned
|
Percentage of Shares of Series A Preferred Stock Beneficially
Owned
|
|
|
|
|
|
|
|
5% Stockholders (other than our executive officers and
directors)
|
|
|
|
|
|
Collingsworth
Properties (1)
|
-
|
-
|
1
|
7.14%
|
|
Jan
Carson Connolly (2)
|
-
|
-
|
1
|
7.14%
|
|
Timothy
J. Connolly (3)
|
-
|
-
|
4
|
28.60%
|
|
Cornell
Capital Partners LP (4)
|
-
|
-
|
1
|
7.14%
|
|
Steve
Cox (5)
|
7,409,400
|
8.56%
|
-
|
-
|
|
Richard
Dole (6)
|
-
|
-
|
1
|
7.14%
|
|
Ali
Ebrahimi (7)
|
-
|
-
|
1
|
7.14%
|
|
Kerry
French (8)
|
-
|
-
|
1
|
7.14%
|
|
Mehrak
Hamzeh (9)
|
4,500,000
|
5.20%
|
-
|
-
|
|
Hunter
Holdings Inc. (10)
|
-
|
-
|
1
|
7.14%
|
|
J.
Michael King (11)
|
-
|
-
|
1
|
7.14%
|
|
Newbridge
Securities Corp. (12)
|
-
|
-
|
1
|
7.14%
|
|
Michael
O. Sutton (13)
|
-
|
-
|
1
|
7.14%
|
(1) The
mailing address for Collingsworth Properties is 6575 West Loop
South Ste. 700, Bellaire, TX 77056.
(2) The
mailing address for Jan Carson Connolly is 109 N. Post Oak Ln.
Suite 422, Houston, Tx 77024.
(3) The
mailing address for Timothy J. Connolly is 109 N. Post Oak Ln.
Suite 422, Houston, Tx 77024.
(4) The
mailing address for Cornell Capital Partners LP is 101 Hudson St.
Suite 3700, Jersey City, NJ 07302.
(5) The
mailing address for Steve Cox is 6682 Elegante Way, San Diego, CA
92130.
(6) The
mailing address for Richard Dole is 318 Indian Bayou, Houston, TX
77057.
(7) The
mailing address for Ali Ebrahimi is 9802 Westheimer Suite 250,
Houston, TX 77042.
(8) The
mailing address for Kerry French is One Riverway Suite 2400,
Houston, TX 77056.
(9) The
mailing address for Mehrak Hamzeh is 111 Quintas Lane, Moraga, CA
94556.
(10) The
mailing address for Hunter Holdings Inc. is P.O. Box 270990,
Houston, TX 77277.
(11) The
mailing address for J. Michael King is 3887 Pacific Street, Las
Vegas, NV 89121.
(12) The
mailing address for Newbridge Securities Corp. is 1451 W. Cypress
Creek Rd. Ste 204 Fort Lauderdale, FL 33309
(13) The
mailing address for Michael O. Sutton is 125 Broad St.,
15th
Floor, New York, NY
10004.
Explanation of Certain Calculations in the Table for Directors and
Named Executive Officers
The
column in the following table entitled “Number of Shares of
Common Stock Beneficially Owned” all issued and outstanding
share of common stock on the record date. To our knowledge, the
stockholders listed in the following table, as well as the
executive officers included in the group but not specifically
named, beneficially own no other securities or right under which
they are entitled to acquire shares of common stock within 60 days
of the record date.
Because
our executive officers and directors do not beneficially own any
shares of our preferred stock, the table omits the columns that
describe ownership of Series A Preferred Stock.
Name and Address of Beneficial Owner(1)
|
Number of Shares of Common Stock
Beneficially
Owned
|
Percentage of Shares of Common Stock
Beneficially Owned
|
|
Directors and Named Executive Officers
|
|
|
|
Bobby
Bedi
|
2,130,000
|
2.46%
|
|
Luke
D’Angelo
|
8,034,537
|
9.28%
|
|
Michael
Gross (2)
|
7,281,517
|
8.41%
|
|
Virgilio
Llapitan
|
1,897,500
|
2.19%
|
|
Robert
Sanchez (3)
|
5,500,000
|
6.36%
|
|
Gary
Wachs
|
7,581,517
|
8.76%
|
|
Christopher
Williams
|
990,000
|
1.14%
|
|
All current directors and executive
officers as a group (7 persons)
|
33,415,071
|
38.61%
|
|
(1)
|
Unless
otherwise indicated, the address for each beneficial owner is c/o
AppTech Corp., 5876 Owens Ave., Suite 100, Carlsbad, CA
92008.
|
|
(2)
|
Includes
1,000,000 shares owned by Crossfire Marketing Group, in which
Michael Gross is the sole owner.
|
|
(3)
|
Includes
5,000,000 shares owned by GlobalTel Media, in which Robert Sanchez
is the controlling shareholder.
|
Section 16(a) Beneficial Ownership Reporting
Compliance
Section
16(a) of the Exchange Act requires our directors, executive
officers and holders of more than 10% of our common stock to file
reports with the SEC regarding their ownership and changes in
ownership of our securities and to furnish us with copies of all
Section 16(a) reports that they file.
Based
solely upon a review of the reports furnished to us and written
representations provided to us by all of our directors and
executive officers, we believe that during the year ended December
31, 2019, our directors, executive officers and greater than 10%
stockholders were not required to file reports under Section 16(a).
Based solely upon a review of the reports furnished to us and
written representations provided to us by all of our directors,
executive officers and greater than 10% stockholders recently filed
their requisite Form 3, which were delinquent prior to
filing.
CERTAIN RELATIONSHIPS AND RELATED PERSONS TRANSACTIONS
Other
than the following and as disclosed, there have been no material
transactions between us and our officers or directors, or any of
their respective affiliates, during the last two (2)
years.
In
2019 and 2018, we obtained $39,319 and $41,047 loans payable from
Luke D’Angelo, net. As of December 31, 2019 and 2018, the
balance of the loans payable was $92,001 and $52,682, respectively.
The loans payable are due on demand, unsecured and non-interest
bearing as there are no formal agreements.
In
2019 and 2018, we reimbursed expenses related to various marketing
expenses, professional fees and other expenses advanced by two
related parties and significant shareholders through other business
ventures. Based on his ownership interest in Crossfire Marketing
Group, for the years ended December 31, 2019 and 2018, the
reimbursement amounts to Michael Gross were $97,800 and $30,000,
respectively. Further, based on his ownership interest in Blake
& Wachs LTD, for the year ended December 31, 2019, the
reimbursement amount to Gary Wachs was $81,000.
In
2018, we obtained $1,400 loan payable from Michael Gross. As of
December 31, 2019 and 2018, the balance of the loan payable was
$1,400. The loan payable is due on demand, unsecured and
non-interest bearing as there are no formal
agreements.
In
2017, we issued $222,000 in convertible notes from Luke
D’Angelo. The convertible notes payable are currently due on
demand, incur interest at 10% per annum and are convertible at
$0.10 per share. As of December 31, 2019 and 2018. Accrued interest
related to the convertible notes was $53,988 and $31,787,
respectively. As of December 31, 2019. We are in default of the
convertible notes payable.
Through
their business interests in Crossfire Marketing Group and Blake and
Wachs, Michael B, Gross and Gary Wachs helped fund operations
through notes payable in primarily 2009 and 2010. The notes payable
incur interest at 10% per annum and were due on December 31, 2016.
As of December 31, 2019 and 2018, the aggregate balance of the
notes payable was $620,356 and accrued interest was $575,480 and
$512,945, respectively. As of December 31, 2019, we were in default
of convertible notes payable.
In
2008, we issued $150,000 in convertible notes from Michael B. Gross
and Gary Wachs. The convertible notes payable are currently due on
demand, incur interest at 15% per annum and convertible at $0.60
per share. As of December 31,2019 and 2018, accrued interest
related to the convertible notes was $243,375 and $220,875,
respectively. As of December 31, 2019, we were in default of
convertible notes payable.
All
related persons transactions were reviewed and approved by a
majority of the Board of Directors on terms no less favorable than
those that could be obtained from unaffiliated third parties.
Further. we intend to ensure that all future transactions between
us and any Related Person are approved by a majority of the members
of the Board, including a majority of the independent and
disinterested members of the Board, and are on terms no less
favorable to us than those that we could obtain from unaffiliated
third-parties. Additionally, all such transactions shall be
reviewed and approved by the Audit Committee, which will present
its determination to the Board as a whole.
EXECUTIVE OFFICERS
The
following table provides the name, age and position of each of our
executive officers as of the record date. Certain biographical
information for each executive officer follows the
table.
|
Name
|
|
Age
|
|
Position
|
|
Luke
D'Angelo
|
|
51
|
|
Chairman
of the Board;
Interim
Chief Executive Officer
Chief
Investment Officer
|
|
Gary
Wachs
|
|
64
|
|
Chief
Financial Officer; Director
|
|
Robert
Sanchez
|
|
58
|
|
Chief
Technology Officer
|
|
Virgilio
Llapitan
|
|
59
|
|
Executive
Vice President
|
|
Michael
Gross[1]
|
|
65
|
|
Director
|
____________________________
|
|
|
|
[1]
|
On
December 04, 2019, Mr. Gross resigned as Chief Executive Officer
and Mr. D’Angelo became Interim Chief Executive
Officer.
|
Luke D’Angelo.
- For biographical information about
Mr. D’Angelo, see “Proposal 3: Election of Directors -
Continuing Directors Not Standing for Election - Class II Directors
(Terms Expire in 2022).”
Gary Wachs.
- For biographical information about
Wachs, see “Proposal 3: Election of Directors - Continuing
Directors Not Standing for Election - Class II Directors (Terms
Expire in 2022).”
Robert Sanchez
has served as our Chief Technology
Officer since March 2018. Mr. Sanchez has over 35 years of
experience in wireless technologies and management. Prior to his
work with us, Mr. Sanchez has served as Globalstar's Manager for
the worldwide system deployment, integration and test program, the
GM for the Ancillary Test Products and Optimization Group. He also
managed the digital cellular program including the definition and
development of industry standards for CDMA handsets and base
stations for Qualcomm. Additionally, he served as VP & Chief
Architect and co-founder of inCode Telecom Group, a global
technology consulting firm of over 500 employees with 16 offices
around the world. Since 2006, Mr. Sanchez Robert has been the CEO
& President of GlobalTel Media, Inc. a technology firm
responsible for developing several patents in A2P Short Messaging
Services (SMS) and mobile payments.
Virgilio
Llapitan, after founding his
own independent insurance agency, transitioned into the merchant
services industry in 2004, where he helped develop and market the
original ACH Payment Processing systems for online merchants as the
Chairman, COO, and Director of HIMC Corporation. Over the course of
his 15 years' experience in the industry, Mr. Llapitan also served
as a Universal Banker II for Ameris Bank/Bank of America and
Director of Sales/Merchant services for Transcendent
One.
Michael Gross.
- For biographical information about
Mr. Gross, see “Proposal 3: Election of Directors -
Continuing Directors Not Standing for Election - Class II Directors
(Terms Expire in 2022).”
Election of Officers
Our
executive officers are currently elected by the Board on an annual
basis and serve until their successors are duly elected and
qualified, or until their earlier resignation or removal. There are
no family relationships among any of our directors or executive
officers.
EXECUTIVE COMPENSATION
Compensation Objectives and Overview
As
a fintech company, we operate in an extremely competitive, rapidly
changing and heavily regulated industry. We believe that the skill,
talent, judgment and dedication of our executive officers and other
key employees are critical factors affecting our long-term
stockholder value. Outside the compensation below, we have not paid
any of our executive officers in the years ended December 31, 2019
and 2018, other than for reimbursement of expenses. We have not
deferred any compensation. We intend to enter into appropriate
compensation agreements in the event we successfully obtain funding
that that will fairly compensate our executive officers, attract
and retain highly qualified executive officers, motivate the
performance of our executive officers towards, and reward the
achievement of clearly defined corporate goals, and align our
executive officers’ long-term interests with those of our
stockholders. The Company does not maintain any stock option or
other equity compensation plan that directly relates to executive
compensation except the proposed amended Equity Incentive Plan as
described in “Proposal 4: Approval of Amended Equity
Incentive Plan.”
Compensation Committee
The
compensation committee currently consists of no committee members.
Upon creation, the compensation committee will review the
performance of our management in achieving corporate objectives and
aims to ensure that the executive officers are compensated
effectively in a manner consistent with our compensation philosophy
and competitive practice. In fulfilling this responsibility, the
compensation committee will annually review the performance of each
executive officer. Our Chief Executive Officer, as the manager of
the executive team, assesses our executive officers’
contributions to the corporate goals and will make a recommendation
to the compensation committee with respect to any merit increase in
salary, cash bonus and equity award for each member of the
executive team other than himself. The compensation committee will
meet with the Chief Executive Officer to evaluate, discuss and
modify or approve these recommendations. The compensation committee
will also conduct a similar evaluation of the Chief Executive
Officer’s contributions when the Chief Executive Officer is
not present, and determine any increase in salary, cash bonus and
equity.
2019 Summary Compensation Table
The
following table summarizes the compensation that we paid to our
Chief Executive Officer and each of our two other most highly
compensated executive officers during the years ended December 31,
2019 and 2018. We refer to these executive officers in this Proxy
Statement as our named executive officers.
|
Name and Principal Position
|
|
Year
|
|
Salary ($)
|
|
Bonus
($)
|
|
Stock Awards ($)
|
|
Option Awards ($)
|
|
Non-Equity Incentive Plan Compensation ($)
|
|
All Other Compen-sation
($)
|
|
Total ($)
|
|
Luke
D’Angelo
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chairman
of the Board and Interim Chief Executive Officer
|
|
2019
2018
|
|
-
-
|
|
-
-
|
|
-
-
|
|
-
-
|
|
-
-
|
|
-
-
|
|
-
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael
Gross
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Director
and Former Chief Executive Officer (1)
|
|
2019
2018
|
|
-
-
|
|
-
-
|
|
-
-
|
|
-
-
|
|
-
-
|
|
-
-
|
|
-
-
|
|
Virgilio
Llapitan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive
Vice President
|
|
2019
2018
|
|
25,000
-
|
|
-
-
|
|
-
-
|
|
-
-
|
|
-
-
|
|
-
-
|
|
25,000
-
|
|
Robert
Sanchez
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chief
Technology Officer
|
|
2019
2018
|
|
21,250
2,800
|
|
-
-
|
|
-
-
|
|
-
-
|
|
-
-
|
|
-
-
|
|
21,250
2,800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gary
Wachs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chief
Financial Officer and Director
|
|
2019
2018
|
|
-
-
|
|
-
-
|
|
-
-
|
|
-
-
|
|
-
-
|
|
-
-
|
|
-
-
|
|
|
|
|
|
|
(1)
|
Mr. Gross served as our Chief Executive Officer until December 04,
2019 at which time he resigned but maintained his position as a
Director with the Company.
|
|
|
|
|
|
|
Narrative Explanation of Certain Aspects of the Summary
Compensation Table
The
compensation paid to our named executive officers in 2019 consisted
solely of a base salary to certain executives. Outside the
compensation above, and in an attempt by executives to show
commitment to the Company, we have not paid any of our executive
officers in the years ended December 31, 2019 and 2018, other than
for reimbursement expenses. We have not deferred any compensation.
We intend to enter into appropriate compensation agreements in the
event we successfully obtain funding.
Employment Agreements with Our Executive Officers
In
2020, upon the creation of our compensation committee following its
review of an executive compensation, we intend to enter into
amended and restated employment agreements with each of our named
executive officers (each an “Employment Agreement”).
The Employment Agreements shall provide, if at all, for a starting
base salary and a potential annual bonus, which is subject to
adjustment by the Board from time to time. Each of the Employment
Agreements will provide that the applicable named executive
officer’s employment with us is “at will.” The
named executive officers are entitled to receive all other benefits
generally available to our executive officers. The Employment
Agreements may also provide certain severance and change in
control-related benefits to our named executive officers, including
cash severance and vesting acceleration upon the occurrence of
certain defined events.
Outstanding Equity Awards as of December 31, 2019
There
were no outstanding equity awards to any named executive for the
year ended December 31, 2019.
Severance and Change in Control Benefits
No
employment agreements with our named executive officers provides
severance and change in control benefits.
Benefits upon Death or Disability
Death of the Officer
The
employment agreement of each of our named executive officers does
not provide certain benefits if his employment is terminated on
account of his death.
Disability of the Officer
The
employment agreement of each of our named executive officers does
not provide certain benefits if his employment is terminated on
account of his disability
Other Benefits
Our
executive officers are eligible to participate in all of our
employee benefit plans, such as medical, dental, vision, group
life, disability and accidental death and dismemberment insurance,
our employee stock purchase plan and our 401(k) plan, in each case
on the same basis as other employees, subject to applicable law,
should such benefits exist. We also provide vacation and other paid
holidays to all employees, including our executive officers, which
are comparable to those provided at peer companies. At this time,
we do not provide special benefits or other perquisites to our
executive officers.
Policies Regarding Recovery of Awards
Our
Board of Directors have not adopted a policy that requires us to
make retroactive adjustments to any cash or equity-based incentive
compensation paid to executive officers (or others) where the
payment was predicated upon the achievement of financial results
that were subsequently the subject of a restatement. However, we
may implement a clawback policy in accordance with the requirements
of the Dodd-Frank Wall Street Reform and Consumer Protection Act of
2010 (the “Dodd-Frank Act”) and the regulations that
will be issued under that act.
Tax and Accounting Treatment of Compensation
Section
162(m) of the Internal Revenue Code places a limit of $1.0 million
per person on the amount of compensation that we may deduct in any
one year with respect to our Chief Executive Officer and certain of
our other executive officers. While the Board of Directors
considers deductibility factors when making compensation decisions,
the board also looks at other considerations, such as providing our
executive officers with competitive and adequate incentives to
remain with us and increase our business operations, financial
performance and prospects, as well as rewarding extraordinary
contributions. No compensation to named executive officers exceeded
this threshold in 2019.
We
account for equity compensation paid to our employees under the
rules of FASB ASC Topic 718, which requires us to estimate and
record an expense for each award of equity compensation over the
service period of the award. Accounting rules also require us to
record cash compensation as an expense at the time the obligation
is accrued. We have not tailored our executive compensation program
to achieve particular accounting results.
Policies on Ownership, Insider Trading, Hedging and 10b5-1
Plans
We
do not have formal stock ownership guidelines for our employees or
directors, because the Board of Directors is satisfied that stock
and option holdings among our employees or directors, are
sufficient at this time to provide motivation and to align this
group’s interests with those of our stockholders. In
addition, we believe that stock ownership guidelines are rare in
fintech companies at our stage, which means that ownership
requirements would put us at a competitive disadvantage when
recruiting and retaining high-quality executives.
Our insider trading policy, which is incorporated
into our Code of Business Ethics prohibits certain actions by our
Executive Officers relating to buying and selling our common stock.
Our executive officers are authorized to enter into trading plans
established according to Section 10b5-1 of the Exchange Act with an
independent broker-dealer (“broker”) designated by us.
These plans may include specific instructions for the broker to
exercise vested options and sell Company stock on behalf of the
executive officer at certain dates, if our stock price is above a
specified level or both. Under these plans, the executive officer
no longer has control over the decision to exercise and sell the
securities in the plan, unless he or she amends or terminates the
trading plan during a trading window. Plan modifications are not
effective until the 31st
day after adoption. The purpose of
these plans is to enable executive officers to recognize the value
of their compensation and diversify their holdings of our stock
during periods in which the executive officer would be unable to
sell our common stock because material information about us had not
been publicly released. As of the record date, no named executive
officer had a trading plan in place.
Stockholder Advisory Vote on Executive Compensation
Our
Company did not hold an advisory vote on executive compensation in
2019 but may take such action in the future. Both our compensation
committee, once in existence, and the Board intend to periodically
reevaluate our executive compensation philosophy and practices in
light of our performance, needs and developments, including the
outcome of future non-binding advisory votes by our
stockholders.
QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING
Why am I receiving these proxy materials?
You
received these proxy materials because you owned shares of AppTech
Corp. common stock or Series A Preferred Stock as of May 21, 2020,
the record date for the Annual Meeting, and our Board is soliciting
your proxy to vote at the Annual Meeting. This Proxy Statement
describes matters on which we would like you to vote at the Annual
Meeting. It also gives you information on these matters so that you
can make an informed decision.
Why did I receive a Notice of Internet Availability of Proxy
Materials in the mail instead of a printed set of proxy
materials?
Under
rules adopted by the SEC, we are permitted to furnish our proxy
materials over the Internet to our stockholders by delivering a
Notice in the mail. Instead of mailing printed copies of the proxy
materials to our stockholders, we are mailing the Notice to
instruct stockholders on how to access and review the Proxy
Statement and Annual Report over the Internet at
www.iproxydirect.com/index.php/APCX. The Notice also instructs
stockholders on how they may submit their proxy by mail or by
phone. If you received a Notice and would like to receive a printed
copy of our proxy materials, you should follow the instructions in
the Notice for requesting these materials.
How do I attend the Annual Meeting online?
We
will host the Annual Meeting exclusively live online, in part due
to restrictions resulting from the Covid-19 pandemic. Any
stockholder can attend the Annual Meeting live online at
www.issuerdirect.com/virtual-event/APCX. To enter the Annual
Meeting, you will need the password included in your Notice or your
proxy card (if you received a printed copy of the proxy materials).
Instructions on how to attend and participate online, including how
to demonstrate proof of stock ownership, are posted at
www.iproxydirect.com/index.php/APCX.
Who is entitled to vote at the Annual Meeting?
Only
stockholders of record at the close of business on the record date
will be entitled to vote at the Annual Meeting. On the record date,
86,538,325 shares of our common stock and 14 shares of our Series A
Preferred Stock were outstanding. All of these outstanding shares
are entitled to vote at the Annual Meeting on the matters described
in this Proxy Statement. Each share of common stock is entitled to
one vote. Each share of Series A Preferred Stock is entitled to one
vote per share of common stock underlying the Series A Preferred
Stock on an as-converted basis of 780 shares of common stock, which
results in 10,920 votes for the Series A Preferred Stock as of the
record date.
In
accordance with Wyoming law, a list of stockholders entitled to
vote at the Annual Meeting will be accessible for 10 days before
the meeting at our principal place of business, 5876 Owens Ave.,
Suite 100, Carlsbad, California 92008, between the hours of 9:00
a.m. and 5:00 p.m. local time. In addition, during the Annual
Meeting that list of stockholders will be available for examination
at www.issuerdirect.com/virtual-event/APCX.
How do I vote at the Annual Meeting?
If
on the record date your shares were registered directly in your
name with our transfer agent, Transfer Online, then you are a
stockholder of record. Stockholders of record may vote by using the
Internet, by telephone or, if you received a proxy card by mail, by
mail as described below. Stockholders also may attend the Annual
Meeting virtually and vote during the Annual Meeting.
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|
|
|
●
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You may vote by using the Internet. The address of the website for
Internet voting is www.iproxydirect.com/index.php/APCX. Internet
voting is available 24 hours a day and will be accessible until
11:59 p.m. Pacific Standard Time on July 27, 2020, the day before
the Annual Meeting. However, the voting portal will reopen during
the Annual Meeting enabling shareholders to vote during the meeting
itself. Easy-to-follow instructions allow you to vote your shares
and confirm that your instructions have been properly
recorded.
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|
|
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●
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You may vote by telephone. The toll-free telephone number is noted
on your Notice of Internet Availability of Proxy Materials and
proxy card. Telephone voting is available 24 hours a day and will
be accessible until 11:59 p.m. Pacific Standard Time on July 27,
2020.
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|
|
|
|
●
|
You may vote by mail. If you received a proxy card by mail and
choose to vote by mail, simply mark your proxy card, date and sign
it, and return it in the postage-paid envelope. Your proxy card
must be received by the close of business on July 28,
2020.
|
When
you vote by any of the above methods, you appoint Luke
D’Angelo our Interim Chief Executive Officer, and Jeff
Moriarty, our Vice President, Corporate Counsel and Secretary, as
your representatives (or proxyholders) at the Annual Meeting. By
doing so, you ensure that your shares will be voted whether or not
you attend the Annual Meeting. The proxyholders will vote your
shares at the Annual Meeting as you have instructed
them.
In
addition, the proxyholders, in their discretion, are further
authorized to vote (a) for the election of a person to the Board if
a nominee named in this Proxy Statement becomes unable to serve or
for good cause will not serve, (b) on any matter that the Board did
not know would be presented at the Annual Meeting by a reasonable
time before the proxy solicitation was made and (c) on other
matters that may properly come before the Annual Meeting and any
adjournments or postponements thereof.
If
you hold shares through a bank or broker (i.e., in “street
name”), please refer to your proxy card, Notice or other
information forwarded by your bank or broker to see which voting
options are available to you.
The
method you use to vote will not limit your right to vote at the
Annual Meeting if you decide to attend. If you desire to vote at
the Annual Meeting and hold your shares in “street
name,” however, you must obtain a proxy, executed in your
favor, from the holder of record to be able to vote virtually at
the Annual Meeting.
Can I change my vote after submitting my proxy?
Yes.
You can revoke your proxy at any time before the final vote at the
Annual Meeting. If you are the stockholder of record of your
shares, you may revoke your proxy in any one of three
ways:
|
|
|
|
●
|
You may submit a subsequent proxy by using the Internet, by
telephone or by mail with a later date;
|
|
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|
|
●
|
You may deliver a written notice that you are revoking your proxy
to the Secretary of the Company at 5876 Owens Ave., Suite 100,
Carlsbad, California, 92008; or
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|
|
●
|
You may attend the Annual Meeting virtually and vote your shares at
the Annual Meeting. Simply attending the Annual Meeting without
affirmatively voting will not, by itself, revoke your
proxy.
|
If
you are a beneficial owner of your shares, you must contact the
broker or other nominee holding your shares and follow their
instructions for changing your vote.
How many votes do you need to hold the Annual Meeting?
A
quorum of stockholders is necessary to conduct business at the
Annual Meeting. Under our amended and restated bylaws, a quorum
will be present if the holders of a majority of the voting power of
the outstanding shares of the Company entitled to vote generally in
the election of directors is represented in person or by proxy at
the Annual Meeting. (Under Wyoming law, if the board of directors
of a company so authorizes, stockholders and proxyholders not
physically present at a meeting of stockholders may, by means of
remote communication, be deemed present in person at a stockholders
meeting. Our Board has so authorized.) On the record date, there
were (a) 86,538,325 shares of common stock outstanding and entitled
to vote and (b) shares of our outstanding Series A Preferred Stock
entitled to 10,920 votes. Therefore, for us to have a quorum,
43,274,623 shares must be represented by stockholders present at
the Annual Meeting or represented by proxy. The holders of the
common stock and the Series A Preferred Stock (on an as converted
basis) vote together as a single class on each of the proposals in
this Proxy Statement.
Your
shares will be counted towards the quorum only if you submit a
valid proxy (or one is submitted on your behalf by your broker,
bank or other nominee) or if you attend the Annual Meeting
virtually and vote at that time. Abstentions and broker non-votes
will be counted for the purpose of determining whether a quorum is
present for the transaction of business. If a quorum is not
present, our Chief Executive Officer, who will preside at the
Annual Meeting as chairman in accordance with our bylaws, may
adjourn the Annual Meeting to another date and time.
What matters will be voted on at the Annual Meeting?
The
following matters are scheduled to be voted on at the Annual
Meeting:
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●
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Proposal 1: To amend the
Articles of Domestication creating two classes of directors and
staggering the terms of the Board;
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●
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Proposal 2: To elect three
Class I directors nominated by our Board and named in this Proxy
Statement to serve a term of one year until our 2021 annual meeting
of stockholders;
|
|
●
|
Proposal 3: To elect four Class
II directors nominated by our Board and named in this Proxy
Statement to serve a term of two years until our 2022 annual
meeting of stockholders;
|
|
●
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Proposal 4: To approve the
Equity Incentive Plan;
|
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●
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Proposal 5: To ratify the
appointment of dbbmckennon as our independent registered public
accounting firm for the year ending December 31,
2020;
|
Cumulative
voting rights are authorized, and appraisal or dissenters’
rights are not applicable to these matters.
What will happen if I do not vote my shares?
Stockholder of Record: Shares
Registered in Your Name. If you
are the stockholder of record of your shares and you do not vote by
proxy card, by telephone, via the Internet or virtually at the
Annual Meeting, your shares will not be voted at the Annual
Meeting.
Beneficial Owner: Shares
Registered in the Name of Broker or Bank. Brokers or other nominees who hold shares of our
common stock or preferred stock for a beneficial owner in street
name have the discretion to vote on routine proposals when they
have not received voting instructions from the beneficial owner at
least 10 days prior to the Annual Meeting. A broker non-vote occurs
when a broker or other nominee does not receive voting instructions
from the beneficial owner and does not have the discretion to
direct the voting of the shares. Under the rules that govern
brokers that are voting shares held in street name, brokers have
the discretion to vote those shares on routine matters but not on
non-routine matters. Proposal 5 is the only routine matter in this
Proxy Statement. Therefore, your broker has the discretion to vote
your shares on Proposal 5 but does not have discretion to vote your
shares on Proposals 1, 2, 3 or 4.
We
encourage you to provide instructions to your bank or brokerage
firm by voting your proxy. This action ensures your shares will be
voted at the Annual Meeting in accordance with your
wishes.
How may I vote for each proposal and what is the vote required for
each proposal?
Proposal 1: Amend the Articles of Domestication.
You may vote FOR or AGAINST or ABSTAIN from voting on Proposal 1. For this proposal to be
approved, we must receive a FOR vote from the holders of a majority of all those
outstanding shares that (a) are present or represented by proxy at
the Annual Meeting, and (b) are cast either affirmatively or
negatively on the Proposal. Abstentions and broker non-votes will
not be counted FOR or AGAINST the proposal and will have no effect on the
proposal.
Proposal 2: Election of Class I directors.
With
respect to the election of the nominees for director, you
may:
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vote FOR the election of both nominees for
director;
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WITHHOLD your vote for both
nominees for director; or
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●
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vote FOR the election of certain nominees for director
except a particular nominee; or
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●
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exercise cumulative voting rights and allocate shares to
vote FOR in association with those
rights.
|
Directors are elected by a plurality of the votes
cast at the Annual Meeting, meaning the nominees who are properly
nominated in accordance with our amended and restated bylaws and
receive the three highest FOR votes will be elected. Only votes cast
FOR
a nominee will be counted. An
instruction to WITHHOLD authority to vote for a nominee will result in the
nominee receiving fewer votes, but will not count as a vote against
the nominee. Abstentions and broker non-votes will have no effect
on the outcome of the election of directors.
Directors are elected with the authorization of
cumulative voting rights. Under cumulative voting rights, each
shareholder is entitled to one vote per share multiplied by the
number of directors to be elected (three). The shareholder may then
allocate these shares to cast FOR votes in whichever proportion they deem fit to any
nominee.
Proposal 3: Election of Class II directors.
With
respect to the election of the nominees for director, you
may:
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●
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vote FOR the election of both nominees for
director;
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●
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WITHHOLD your vote for both
nominees for director; or
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●
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vote FOR the election of both nominees for director except
a particular nominee; or
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●
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exercise cumulative voting rights and allocate shares to
vote FOR in association with those
rights.
|
Directors are elected by a plurality of the votes
cast at the Annual Meeting, meaning the nominees who are properly
nominated in accordance with our amended and restated bylaws and
receive the two highest FOR votes will be elected. Only votes cast
FOR
a nominee will be counted. An
instruction to WITHHOLD authority to vote for a nominee will result in the
nominee receiving fewer votes, but will not count as a vote against
the nominee. Abstentions and broker non-votes will have no effect
on the outcome of the election of directors.
Directors are elected with the authorization of
cumulative voting rights. Under cumulative voting rights, each
shareholder is entitled to one vote per share multiplied by the
number of directors to be elected (three). The shareholder may then
allocate these shares to cast FOR votes in whichever proportion they deem fit to any
nominee.
Proposal 4: Approval of the Equity Incentive Plan.
You may vote FOR or AGAINST or ABSTAIN from voting on Proposal 4. For this proposal to be
approved, we must receive a FOR vote from the holders of a majority of all those
outstanding shares that (a) are present or represented by proxy at
the Annual Meeting, and (b) are cast either affirmatively or
negatively on the Proposal. Abstentions and broker non-votes will
not be counted FOR or AGAINST the proposal and will have no effect on the
proposal.
Proposal 5: Ratification of the appointment of dbbmckennon as our
independent registered public accounting firm for the year ending
December 31, 20120.
You may vote FOR or AGAINST or ABSTAIN from voting on Proposal 5. For this proposal to be
approved, we must receive a FOR vote from the holders of a majority of all those
outstanding shares that (a) are present or represented by proxy at
the Annual Meeting, and (b) are cast either affirmatively or
negatively on the Proposal. Abstentions and broker non-votes will
not be counted FOR or AGAINST the proposal and will have no effect on the
proposal.
How does the Board recommend that I vote?
The Board recommends that you vote
FOR
each director nominee in Proposals 2
and 3, and FOR Proposals 1, 4 and 5.
What happens if I sign and return my proxy card but do not provide
voting instructions?
If
you return a signed and dated proxy card without marking any voting
selections, your shares will be voted:
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Proposal 1: FOR amending the Articles of
Domestication;
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Proposal 2: FOR the election of each nominee for Class I
director;
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Proposal 3: FOR the election of each nominee for Class II
director;
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Proposal 4: FOR the Approval of the Equity Incentive
Plan;
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Proposal 5: FOR the ratification of the appointment of dbbmckennon
as our independent registered public accounting firm for the year
ending December 31, 2020;
|
Could other matters be decided at the Annual Meeting?
We
do not know of any other matters that may be presented for action
at the Annual Meeting. The proxyholders, in their discretion, are
further authorized to vote (a) for the election of a person to the
Board if a nominee named in this Proxy Statement becomes unable to
serve or for good cause will not serve, (b) on any matter that the
Board did not know would be presented at the Annual Meeting by a
reasonable time before the proxy solicitation was made and (c) on
other matters that may properly come before the Annual Meeting and
any adjournments or postponements thereof.
What happens if a director nominee is unable to stand for
election?
If
a nominee is unable to stand for election, the Board may
either:
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reduce the number of directors that serve on the Board;
or
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designate a substitute nominee.
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If
the Board designates a substitute nominee, the proxyholders will
exercise their discretion as described above and vote for the
substitute nominee.
How do I attend the virtual Annual Meeting?
We
are hosting the Annual Meeting exclusively online at
www.issuerdirect.com/virtual-event/APCX. The Notice includes
instructions on how to participate in the Annual Meeting via the
Internet and how to vote your shares of our capital stock online at
www.iproxydirect.com/index.php/APCX. You will need to enter the
control number received with your proxy card or Notice of Internet
Availability of Proxy Materials to enter the Annual Meeting via the
online web portal.
Who is paying for this proxy solicitation?
The
accompanying proxy is being solicited by the Board. In addition to
this solicitation, our directors and employees may solicit proxies
in person, by telephone, or by other means of communication.
Directors and employees will not be paid any additional
compensation for soliciting proxies. In addition, we may also
retain one or more third parties to aid in the solicitation of
brokers, banks and institutional and other stockholders. We will
pay for the entire cost of soliciting proxies. We may reimburse
brokerage firms, banks and other agents for the cost of forwarding
proxy materials to beneficial owners.
What happens if the Annual Meeting is postponed or
adjourned?
Unless
the polls have closed or you have revoked your proxy, your proxy
will still be in effect and may be voted once the Annual Meeting is
reconvened. However, you will still be able to change or revoke
your proxy with respect to any proposal until the polls have closed
for voting on that proposal.
How can I find out the results of the voting at the Annual
Meeting?
Preliminary
voting results are expected to be announced at the Annual Meeting.
Final voting results will be reported on a Current Report on Form
8-K filed with the SEC no later than four business days following
the conclusion of the Annual Meeting.
How can I find AppTech’s proxy materials and Annual Report on
the Internet?
This
Proxy Statement and the Annual Report are available at our
corporate website at www.apptechcorp.com. You also can obtain
copies without charge at the SEC’s website at www.sec.gov.
Additionally, in accordance with SEC rules, you may access these
materials at www.iproxydirect.com/index.php/APCX., which does not
have “cookies” that identify visitors to the
site.
How do I obtain a separate set of AppTech’s proxy materials
if I share an address with other stockholders?
In
some cases, stockholders holding their shares in a brokerage or
bank account who share the same surname and address and have not
given contrary instructions receive only one copy of the Notice.
This practice is designed to reduce duplicate mailings and save
printing and postage costs as well as natural resources. If you
would like to have a separate copy of the Notice, the Proxy
Statement or the Annual Report mailed to you or to receive separate
copies of future mailings, please submit your request to the
address or phone number that appears on your Notice or proxy card.
We will deliver such additional copies promptly upon receipt of
such request.
In
other cases, stockholders receiving multiple copies of the Notice
at the same address may wish to receive only one. If you would like
to receive only one copy if you now receive more than one, please
submit your request to the address or phone number that appears on
your Notice or proxy card.
Can I receive future proxy materials and annual reports
electronically?
Yes.
This Proxy Statement and the Annual Report are available on our
investor relations website located at
http://www.apptechcorp.com/investor-relations and
www.iproxydirect.com/index.php/APCX. Instead of receiving paper
copies in the mail, stockholders can elect to receive an email that
provides a link to our future annual reports and proxy materials on
the Internet. Opting to receive your proxy materials electronically
will save us the cost of producing and mailing documents to your
home or business, will reduce the environmental impact of our
annual meetings.
Whom should I call if I have any questions?
If
you have any questions, would like additional AppTech proxy
materials or proxy cards, or need assistance in voting your shares,
please contact Investor Relations, AppTech Corp., 5876 Owens Ave,
Suite 100, Carlsbad, California 92008 or by telephone at (760)
707-5955.
Can I submit a proposal for inclusion in the proxy statement for
the 2021 annual meeting?
Our
stockholders may submit proper proposals (other than the nomination
of directors) for inclusion in our proxy statement and for
consideration at our 2021 annual meeting of stockholders by
submitting their proposals in writing to the Secretary of the
Company in a timely manner. To be considered for inclusion in our
proxy materials for the 2021 annual meeting of stockholders,
stockholder proposals must:
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be received by the Secretary of the Company no later than the close
of business on December 31, 2020 (which is the 120th day prior to
the first anniversary of the date that we released this Proxy
Statement to our stockholders for this Annual Meeting);
and
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otherwise comply with the requirements of Wyoming law, Rule 14a-8
of the Exchange Act and our amended and restated
bylaws.
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Unless
we receive notice in the foregoing manner, the proxyholders shall
have discretionary authority to vote for or against any such
proposal presented at our 2021 annual meeting of stockholders. If
we change the date of the 2021 annual meeting of stockholders by
more than 30 days from the anniversary of this year’s Annual
Meeting, stockholder proposals must be received a reasonable time
before we begin to print and mail our proxy materials for the 2021
annual meeting of stockholders.
Can I submit a nomination for director candidates and proposals not
intended for inclusion in the proxy statement for the 2021 annual
meeting?
Our
stockholders who wish to (a) nominate persons for election to the
Board at the 2021 annual meeting of stockholders or (b) present a
proposal at the 2021 annual meeting of stockholders, but who do not
intend for such proposal to be included in our proxy materials for
such meeting, must deliver written notice of the nomination or
proposal to AppTech Corp, 5876 Owens Ave, Suite 100, Carlsbad,
California 92008, Attention: Secretary no later than the close of
business on the later of (a) the 90th day prior to the 2021 annual
meeting of stockholders and (b) the 10th day following the day we
first publicly announce the date of the 2021 annual meeting. The
stockholder’s written notice must include certain information
concerning the stockholder and each nominee and proposal, as
specified in our amended and restated bylaws.
Where can I obtain a copy of the Company’s amended and
restated bylaws?
A
copy of our amended and restated bylaw provisions governing the
notice requirements set forth above may be obtained by writing to
the Secretary of the Company. A current copy of our amended and
restated bylaws is also available at our corporate website at
www.apptechcorp.com. Such requests and all notices of proposals and
director nominations by stockholders should be sent to AppTech
Corp., 5876 Owens Ave., Suite 100, Carlsbad, California 92008,
Attention: Secretary.
Important Notice Regarding the Availability of Proxy Materials for
the Annual Meeting to be Held on Tuesday, July, 28, 2020:
This Proxy Statement and the Annual
Report are available on-line at
www.iproxydirect.com/index.php/APCX.
OTHER MATTERS
This
Proxy Statement and the Annual Report are available at our
corporate website at www.apptechcorp.com. You also can obtain
copies without charge at the SEC’s website at www.sec.gov.
Additionally, in accordance with SEC rules, you may access these
materials at www.iproxydirect.com/index.php/APCX., which does not
have “cookies” that identify visitors to the
site.
In
our filings with the SEC, information is sometimes
“incorporated by reference.” This means that we are
referring you to information that has previously been filed with
the SEC and the information should be considered as part of the
particular filing. As provided under SEC regulations, the
“Audit Committee Report” contained in this Proxy
Statement specifically is not incorporated by reference into any
other filings with the SEC and shall not be deemed to be
“soliciting material.” In addition, this Proxy
Statement includes several website addresses. These website
addresses are intended to provide inactive, textual references
only. The information on these websites is not part of this Proxy
Statement.
As
previously noted, our Annual Report on Form 10-K for the fiscal
year ended December 31, 2019 is available at
www.iproxydirect.com/index.php/APCX. The Annual Report does not
include exhibits (other than certain certifications) but does
include a list of exhibits, as filed with the SEC. We will furnish
to each person whose proxy is solicited, upon our receipt of the
written request of that person, a copy of the exhibits to our
Annual Report for a charge of 10 cents per page. Please direct your
request to AppTech Corp., 5876 Owens Ave., Suite 100, Carlsbad,
California, 92008, Attn: Secretary.
CONTACT FOR QUESTIONS AND ASSISTANCE WITH VOTING
If
you have any questions or require any assistance with voting your
shares or need additional copies of this Proxy Statement or voting
materials, please contact:
Investor Relations
AppTech Corp.
5876 Owens Ave.,
Suite 100
Carlsbad, California 92008
It
is important that your shares are represented at the Annual
Meeting. Whether or not you plan to attend the Annual Meeting,
please vote by using the Internet or by telephone or, if you
received a paper copy of the proxy card by mail, by signing and
returning the enclosed proxy card, so your shares will be
represented at the Annual Meeting.
The
form of proxy card and this Proxy Statement have been approved by
the Board and are being mailed or delivered to stockholders by its
authority.
The Board of Directors of AppTech Corp.
Carlsbad, Ca
June 12, 2020
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APPTECH CORP
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS
ANNUAL
MEETING OF STOCKHOLDERS – JULY 28, 2020 AT 9:30 AM
PST
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CONTROL ID:
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REQUEST ID:
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AppTech
Corp., a Wyoming Corporation (the “Company”) will be
held exclusively online via the Internet at
www.issuerdirect.com/virtual-event/apcx on Tuesday, July 28, 2020
at 9:30 a.m. Pacific Standard Time.
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(CONTINUED AND TO BE SIGNED ON REVERSE SIDE.)
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VOTING INSTRUCTIONS
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If you vote by phone, fax or internet, please DO NOT mail your
proxy card.
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MAIL:
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Please
mark, sign, date, and return this Proxy Card promptly using the
enclosed envelope.
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FAX:
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Complete the reverse portion of this Proxy Card
and Fax to 202-521-3464.
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INTERNET:
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https://www.iproxydirect.com/APCX
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PHONE:
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1-866-752-VOTE(8683)
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ANNUAL MEETING OF THE STOCKHOLDERS OFAPPTECH CORP
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PLEASE COMPLETE, DATE, SIGN AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN
HERE: ☒
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PROXY
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
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Proposal
1
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FOR
ALL
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AGAINST
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ABSTAIN
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Amendment
of AppTech’s Articles of Domestication to expand the Board of
Directors from 5 members to 7 separated into Class I and Class II
Directors with staggered 2-year terms.
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☐
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☐
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CONTROL ID:
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REQUEST ID:
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Proposal
2
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FOR
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WITHHOLD
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Election
of 3 members to the Class I Board of Directors:
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Ron
Huang
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William
Huff
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☐
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☐
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Michael
O’Neal
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☐
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☐
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Proposal
3
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FOR
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WITHHOLD
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Election
of 4 members to the Class II Board of Directors:
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Luke
D’Angelo
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Michael
Gross
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☐
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☐
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Gary
Wachs
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Christopher
Williams
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Proposal
4
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FOR
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AGAINST
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ABSTAIN
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Approval
of AppTech’s Equity Incentive Plan.
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☐
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☐
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☐
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Proposal
5
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FOR
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AGAINST
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ABSTAIN
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Ratification of
dbbmckennon as AppTech’s independent registered public
accounting firm for the year ending in December 31,
2020.
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☐
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☐
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MARK
“X” HERE IF YOU PLAN TO ATTEND THE MEETING:
☐
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MARK HERE FOR ADDRESS CHANGE ☐ New Address (if applicable):
________________________
________________________
________________________
IMPORTANT: Please sign exactly as your name or names appear
on this Proxy. When shares are held jointly, each holder should
sign. When signing as executor, administrator, attorney, trustee or
guardian, please give full title as such. If the signer is a
corporation, please sign full corporate name by duly authorized
officer, giving full title as such. If signer is a partnership,
please sign in partnership name by authorized
person.
Dated:
________________________, 2020
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(Print Name of
Stockholder and/or Joint Tenant)
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(Signature of
Stockholder)
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(Second Signature
if held jointly)
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